Not to be a nag (because certainly we have talked about not lowering your rates before), but we need to talk about your habit of discounting. It’s bad. Real bad.
Yes, I understand that prospects push to try to get a deal. Yes, I get that sometimes it means you don’t get the sale. Yes, I know that sometimes you may even want to give someone a break because they need your help.
Hear me when I say: you do not have to put yourself on sale…EVER.
There are so many other ways to win the business and unfortunately, what we put up with, we get more of. So if you train your clients to expect you to cut them some slack, guess what? Those clients are never ever going to pay you what you are worth. They are ALWAYS going to wait for a sale.
Let’s talk about what you give up when you lower your rates…
Potential Opportunities – Taking on something on for less than what you should be charging costs you other potential opportunities, especially if you have limited time or inventory (which most of us do). Stay focused on attracting your ideal customers who recognize your value and are willing and able to pay full price. Those are the clients who understand your true value.
Quality Delivery – Attempting to maintain reasonable profitability tempts us into rushing or putting a little less effort into it, which in turn means you are delivering less. Instead of discounting, be honest with yourself (and the potential client) about what it takes to get the job done right and reduce the scope of work in order to meet a target budget.
Industry Reputation – Agreeing to cut your rates will ultimately hurt your reputation within your industry and your business circle. Trust me when I say, people talk (and they will share the deal you gave them with others). Earn the reputation of charging what you are worth and delivering amazing quality! Value isn’t calculated on time versus money! Shift your thinking to how what you do impacts their bottom-line!
Future Profit – Undercharging leads to more (you guessed it) undercharging. So that little discount you give today can (and will) impact your ability to charge others full price in the future (see above for the reason). It’s better to just learn how to close the sale without defaulting to the discount.
Expert Status – Dropping your rates faster than a two-dollar you know what (ahem…rhymes with CHORE) means sacrificing your expert status. People might not say it, but they will think it, “A true expert who was good at what they do wouldn’t cut their rates.” It’s a quirk of psychology that has been proven over and over again that people associated quality with price.