Why Offering Discounts Won't Revive a Dry Pipeline
The Kate Show | Episode 64
This episode is sponsored by My Design Assistant, virtual assistant services for interior designers.
"I only have one project in my pipeline, and it has turned into a bidding war between me and another home industry pro. I want the client to choose me because I need the money much sooner than later. Should I discount my services to get the job?"
I've been asked this question in various forms over the past couple of years, and prior to that, I was the one asking. I constantly wondered if my pricing was too high, too low, or if I just didn't offer enough services. I was convinced that something was wrong with me and that I wasn't doing enough to market my business. I was also worried that I, personally, wasn't enough, that I was never meant to be a business owner, and that I was ridiculous for thinking success was attainable.
That's such a dark place to be, and you've likely found yourself there at least once in your career. I've spoken with 20-somethings and 50-somethings who all have the same reaction to a slow-growing business:
"It's my pricing. I knew it," which can also be translated to, "It's me...I knew it."
The value of our services and the value we place on ourselves are intrinsically connected. If one is rejected, the other often follows suit - at least in our heads - and creates a downward spiral of self-deprecation and discounts.
That's no way to live, and I'm going to give you a new perspective with actionable tips on how to defeat the discount monster. If this describes you right now, tune into the latest episode of The Kate Show by subscribing on iTunes or Google Play.
Listen to the Episode
Why Price isn't Actually a Selling Point
If you find yourself questioning your price tag, thinking surely that must be the cause of slow sales, I want you to think about your pricing differently. Price is not a selling point. Price is the last thing a good client considers.
Instead, he or she will weigh the perceived value of you and your services. Do you clearly understand their need? Are you capable of providing a solution? Will you save them time? (Time is much more important than money, regardless of a client's actual budget.)
You'll need to make these things evident through your website and client-facing materials; it is your job to control the value your clients perceive. If your design fee is $300 an hour, your marketing is on-par with that number, and you're able to deliver everything as promised, go for it. You'll be able to sell projects at that price point because price is just an afterthought.
How to Help Potential Clients See Your True Value
List in detail the many aspects of work you provide for them during each service or phase of a project; don't assume they already know; these details should appear on your website and in any printed marketing / client on-boarding materials
Describe the difficulties they would experience if doing this project without you; they likely already know this, and your explanation of it will further solidify to them that you know what you're doing
Explain how your clients will feel after working with you; emotion plays a big part in decision making, far more than price ever does
Remember, if you have to lower your rates to land a project, you were chosen because the client believed you were "cheap." Don't blame the client; that's exactly what you told them! It sets the precedent for a project and a client relationship based on you working many unpaid hours, lowering your already low confidence, and allowing yourself to be taken advantage of by a bargain hunter who got exactly what they wanted.
Next time you're faced with no projects on the horizon and you're tempted to run a sale to "generate some new leads," hop on a live social media video and share tips or FAQs with your audience, no matter how small. This will set you up as a professional, a leader, and a resource, and that positioning will land more new projects than a sale or discount ever could.
When you find yourself faced with a bargain hunter who asks for a discount, say no or offer a lower level of service. If that is still not enough for them, move on. I promise you that isn't worth it.
You've got this.