Stacey Abler contacted me recently with a question about a new prospect. In her email she mentioned that she was considering offering a discount just because the contract could be a long-term regular one. My reaction was shock, followed by a "no, no, no...." Offering this kind of discount to a brand new client is a recipe for disaster. At the same time, I can understand why so many freelancers do it -- they feel like they have to give clients more for their money so they don't scoff at rates and hire a less expensive provider. Fortunately that isn't the reality of the situation.
Different Kinds of New Client Discounts
Look. I'm not saying you should never give any kind of discount to a new client. I'm actually a huge fan of running sales to attract early interest from clients who will then pay your regular rates after the sale period expires. That was one of the best things I did personally to rapidly grow my own client list when I switched from PR to full-time writing. It works. And most of my current regulars actually came to me that way. They don't run away as soon as your rates go up.
There is another type of discount though -- the type I suggested that Stacy stay away from. It involves offering a permanent discount on your rates solely because someone orders in a large quantity. I've made this mistake myself. And fortunately I learned the lesson quickly and I no longer offer bulk rates -- especially to new clients. I do still have two old clients on pre-negotiated bulk rates, but that came after already having established relationships and I know the clients well enough to know they won't try to keep pushing my limits to undercut me repeatedly. And the moment those rates lead to me earning less than that $150 per hour "magic number" I'll renegotiate or move on to new clients more appropriate for my current market.
So what exactly is the problem with bulk rates for new clients? First, it sets a negative tone from the beginning of your working relationship. You immediately show that you're a pushover who can be "talked down." If they can do it immediately, there's a good chance they'll do it again. And once you accept a large regular order, they know you become more reliant on them as it's harder to replace that kind of sudden loss. That means they have the upper hand. And your relationships with clients should be based on mutual respect; not someone trying to get one over on someone else.
On top of that issue, you are not a machine. You have a set number of available billable hours. If you were smart about business earlier on, you already calculated what you need to charge per billable hour to reach your goals. Just because one client orders 10 hours of your time each week, it doesn't mean they deserve a discount. They're already saving money by hiring a freelancer as opposed to a full-time employee. If they want 10 hours of your time, they should value what you bring to the table enough to pay your going rate. If they can't afford to do that, they're simply not within your target market. Others will.
What to do When a Client Asks for a Discount for "Regular Work"
It's incredibly rare for me to have a new prospect try to talk me down. I publish my rates publicly so they know what they need to budget for if they want me, and that helps to weed out a lot of people who can't afford me. It saves time and hassle. I also have no problem walking away when a client insists on a discount. (That means far more than you might think -- and for the record, the majority of people I've walked away from in those circumstances have actually later come back fully willing to pay my going rate.)
Those are good steps. But there's a far more important one, and it's the one I think a lot of freelance writers forget. You have to show the client that you're worth the rates you charge. Yep. It's all about marketing. If you can't "sell yourself" in a way that conveys your full value to the client, they're not likely to see it on their own. It's a part of your job. So learn to love it. If they ask for a discount, take the approach of explaining what you're really providing them and why it's worth your going rate. If you can't convey value, then you really aren't worth your rates. And if you simply come across a client looking for savings, it's always okay to say "no thanks, but feel free to contact me if there's anything I can do for you in the future."
Alternatives to Offering Client Discounts
When I responded to Stacy, I gave her some alternatives to immediately offering discounts to a new client. Sometimes it's better to sink in a little extra time up front that you're not directly paid for than to discount your regular services. You can promote it as a "bonus" of sorts so the client still gets more for their money, but you don't trap yourself in a cycle of earning less than you should (or at least could) be. Here are some examples:
- Offer an extra one-time service for new clients. If you write SEO articles for example maybe offer a special of 12 articles for the price of ten (for new clients only, and only on their first order).
- Offer a free product of some kind. For example, write a report or white paper that specifically targets your client base. The best part is you only have to write it once, so you don't sacrifice time repeatedly.
- Offer a free initial consultation. Yes, even freelance writers need to occasionally consult with clients about their plans and goals, and in general that won't be free time. Give them a free taste of what you're made of -- once.
- Offer to start on a trial basis. If they're concerned about starting a long-term contract with you, pitch a short-term one instead. It gives them a better feel for the value you really offer which helps to justify your rates, but they don't have to commit immediately. You give up nothing. They get to feel more comfortable with you early on. It's win-win. You can always expand that contract when it expires.
And what can do you if all that fails? You can pitch a pared-down package of services. You show the client what they can realistically expect to get with the budget they have. Many will take this offer (let's say offering 8 blog posts per month instead of 12). At the same time, you don't sacrifice your rates based on the time you put in. And you'd probably be surprised by how many clients suddenly realize they can afford your original offer when you make this kind of counter-offer. After all, they were expecting you to pitch a discount. They didn't think you'd expect them to meet you halfway. If they really want what they say they want they'll hire you. If not, they might come back later. And in the meantime you'll find new clients who do value your work accordingly.
So what do you do when new clients immediately ask for discounts? What about ones who try to treat services like mass-produced products, asking for bulk discounts or discounts if they agree to hire you for X number of hours each week? I hope you don't just cave in and set that kind of precedent. If not, do you offer an alternative solution? Share your thoughts in the comments.