Setting prices is one of those things that business owners and freelancers agonise over. If you set your prices too low, then you might get more clients, but you also run the risk of your business failing because it’s not financially viable. If you set your prices too high, then you might find that too many of your potential clients are unable to afford your services and you can’t make a profit. It’s a very fine line to walk, but if you break down the cost of doing business, and do your homework on what other businesses are charging for comparable products and services, you can feel confident that your pricing is reasonable.
It can come as quite a shock, and be disheartening, when a client comes back to you and says that you are too expensive. The first thing you might want to do is reduce your prices because such a statement can make you doubt yourself, and your worth, but you shouldn’t do that. If your prices reflect the cost of doing, and staying in business, then you should take someone questioning your cost as a compliment. They obviously value your work or else they could have said, ‘Thanks, but no thanks,’ and moved on to someone else. Instead, they are keeping open the conversation about engaging your services. Here are some ways you could proceed to win the business.
Justify the Cost
If the cost of your services includes raw materials, hiring equipment, paying other people, or other fixed costs, then it can be helpful to break these costs down to your client. If you haven’t already, provide a detailed quote that outlines exactly what the total cost is made up of.
If the client is comparing you to another business, but they still want you over them, do your research and find out what your competitor is offering. If you discover that you are more qualified, are using higher quality materials, or include extra services that the other business isn’t, explain this to your client. Never put another business down, instead highlight all the added benefits your client will get if they hire you.
Offer a Reduced Service
Sometimes a client will want to haggle just to get a cheaper deal, but other times you might find that someone genuinely can’t afford to pay your rates. To find out where your client stands, offer to reduce the cost by reducing the service. If you are a painter you might be able to paint the living areas and leave the bedrooms. If you are photographer maybe you can provide 10 images instead of 20. Someone who is haggling for the sake of it will rarely want to take a reduced service, but someone who can’t afford the full rate will be grateful to still have you on their job, and you can be sure they will tell their friends how you accommodated their financial situation.
In certain industries, a job can have benefits to both the client and the service provider. For example, a freelance camera operator might get a film credit on an independent film that doesn’t have a budget. Consider if doing the job for a reduced rate could lead to more work in the future. If you will make valuable contacts, get free publicity, or secure an ongoing contract, it could be worth reducing your rate. In a world where relationships are everything, sometimes building a relationship can work out more lucrative than turning the job down.
Decline the Job
Sometimes you have to be ruthless and understand that taking on a job for a reduced rate, or getting into a protracted discussion with your client about cost, is not worth your time. Another client could come along tomorrow and be able to pay your full rate, so it will end up detrimental to your business to continue the negotiations or offer a reduction in the cost. If this is the case then you can either explain to the client that you can’t move on price, or you can just tell them that unfortunately you are unable to take the job. There is no point getting into an argument, or worrying yourself that your prices are too high. Accept that this is not the right client for you, and move on.
When you are good at what you do, and offer a premium service, word will spread and people will want you to work for them. The downside of today’s public communication mediums, such as social media, is that clients have become more brazen in asking for exactly what they want, and that includes a cost that they deem appropriate. Nobody knows your business as well as you do, and you set your rates with many things in mind that a client has not considered. Give yourself the credit you deserve and don’t let a pushy client make you feel worth less than you are.