Two simple sentences can cause business owners a lot of anxiety:
- “Your rates are higher than this other person I know.”
- “You charge too much.”
At the beginning of my career, I would always get cold sweats before naming a price.
I was always scared of what the prospect would say. Interestingly enough, I agonized the most over my rates at a point when I was charging hardly anything for the amount of time I was putting into each project.
The response to my price is something I felt fearful of until I had a few realizations.
The first realization is that someone will always charge less than me, and I’m not in business to beat someone else’s price. I’m in business to make enough money to see a profit while providing a quality service to people who need it.
The second realization I had is that clients second guess your price if it makes you uncomfortable. They can tell if you’re uncertain. Be confident and prepare yourself to explain the value of working with you if necessary.
Here are a few other ways to handle the situation courteously when you hear from a prospect that you’re not within their price range.
Keep Referrals Handy
Maybe you know someone who’s at the beginning of their career and offers a lower rate. Keep a few people in your back pocket you can refer if someone is looking for a more affordable option.
I’ll admit, I often have trouble finding people to refer who provide the same quality as my peers and me. But if you know someone, it’s a nice gesture to offer alternatives at a lower price point.
Remove Some Services
I decided for myself that I would no longer negotiate down on my rates (unless it’s a particular circumstance). This is a highly personal choice. I’ve been freelancing for about four years, but I’m still pretty conservative in my pricing. Whenever I negotiate, it impacts the way I feel about a project, and that’s not great for your mindset.
Instead of negotiating on price, another thing you can negotiate on is the number of services you’re giving. For example, if you’re a freelance writer who usually writes four blog posts a month you could take it down to three blog posts and adjust the price.
This way you fit into your client’s budget, but you’re not lowering how much you’re going to be paid for a task. If you reduce a rate for a task, there’s a good chance a request to lower your prices will come up often in your relationship.
The only circumstances when I consider lowering my standard rates are if I’ll be getting consistent work from a client or the work will be good for my portfolio. Working out bundled prices or a special rate makes business sense because it’s giving you a job you can rely on.
Hearing that I charge too much used to throw me for a loop. It always felt like a hit to my ego when someone questioned my rates. Remember, business is business. A client is thinking about their budget when making a deal with you. It’s not personal.