I am always surprised by how many clients want to “give away” their services. They settle for less than they are worth just to get a client that is most probably not the client they most want to work with. Are you guilty of settling for less than you are worth? If so, remember, you are never expected to work for free. As a matter of fact, price is often the value that your client puts on the product or the service. If you give it away, they think it is worth nothing.
Many of my clients have trouble with the “charge what you are worth” concept. When they resist setting or raising prices, I remind them that discounting:
- Is an amateur move. Most small business owners outgrow the willingness to negotiate price. If you are willing to negotiate, it is often an indication that you do not yet believe in your worth or that you are not sure what you are worth. Set a price that says you are a veteran and stick to it!
- Devalues the product or service. Instead of selling yourself short, educate your client. Explain the value you are offering and why you’re worth full price.
- Creates an expectation for more of the same in the future. Give it away once and your clients will expect you to give it away all the time. They also do not keep secrets so others will expect to get the same discounted price. Charge everyone the same price, the price you are worth. If the price is right, it is right for everyone.
- Makes you look desperate. Nothing says “I am desperate for the work” more than allowing a client to negotiate their own price. No one wants to appear to be desperate. Post a price. Share a price sheet. Practice quoting the price you have determined to be right.
- Steals your profit and your income. The amount you give away comes right off the top. That is usually where you find the owner’s income or distribution. You, the owner, often suffer personally when you give away your products or services. Remember, you deserve to be well compensated for offering the world your specialty.
- Builds a client community that does not serve you best. Unless you have built your target market and specialty for those that want the cheapest price, people who are looking for a bargain are not your best match. Build your perfect client base starting with the very first client.
- Steals your bliss. You will regret giving your products and services away and that leads to resentment. Resentment steals your joy and can destroy your desire to be a small business owner. Living an outrageously successful lifestyle requires commitment to your products, services, and the prices they are worth.
I am not suggesting you should never “give” something way. Just be clear that anything you give away is pro bono or charity. Give it because it makes you feel better and you do not expect anything in return. Everything else is the price you have determined the market will bear. No exceptions.
Yes, discounts can be hazardous to your business success; more importantly, they do not contribute to the mutually respectful relationships most of us want with our clients. If you need even more reason to charge what you are worth, keep in mind that your clients, your real clients, want to pay and measure the value of what you offer them by the price you charge them. We do not expect to get the best value product from a deep discount retail store, and if we have a need for an expert, i.e., a criminal lawyer, neurosurgeon, airline pilot, we do not want to engage one that is willing to work for “cheap”. The same holds true for you, your products, and your services.
So, before you decide to discount your products or services, consider all the consequences. Walk away rather than depart from your targets and lose your joy or compromise your integrity. Your clients and your balance sheet will be pleased you did.
For more small business advice, check out Plan It! Do It! Love It! – Your guide to being outrageously successful living your small business lifestyle.