Reduce my rates like a professional?
February 6, 2012 9:53 AM
I've been a freelance PowerPoint designer for 6 years. Given the state of the economy and my stagnant business, I've been quoting lower rates to prospective clients, but what about old clients who are still paying my old, higher rates? There are a few in particular that I think might give me more work if I charged less. How can I find out if that's true and how much less I would have to charge to get more work? I don't want to offer a lower rate if it won't increase the amount of work they give me, and I don't want to come off as desperate. Can this be done gracefully?
I would just tell your clients the truth--absolutely before they discover you are offering new clients services at a lesser rate ( I would think a sure way to lose existing clients). Just write them that you are currently reducing your rates due to a highly competitive economy, a general economic recession and out of respect for the business challenges existing and new clients face. I think you have a lot more to lose by having differential rates if the work is the same. You can always raises your rates in the reasonable future if business conditions warrant it.
posted by rmhsinc at 10:11 AM on February 6, 2012
posted by rmhsinc at 10:11 AM on February 6, 2012
This is pretty much putting your services on sale, and you should do this for all your clients across the board. It could even be a good thing. Send an email to everybody you've ever contacted being like "we're having a sale! it's now even cheaper to get awesome powerpoints!" and you might actually get more business. And let your new prospective clients know it's a sale price, as well, so when your work does flow more dependably, you can revert to your higher, normal rates without being a jerk about it.
posted by Jon_Evil at 10:24 AM on February 6, 2012
posted by Jon_Evil at 10:24 AM on February 6, 2012
Here's several approaches to consider that will all appear to have client advantages and come across professionally:
1. Create a tiered pricing schedule where the first x hours are at y rate and then it steps down in increments after that. You can explain to your long-term clients that you've started this approach in 2012 to pass along the savings inherent in working with them: no marketing costs, clear mutual expectations, etc.
2. Create a subscription model which can be framed up positively, as in, you're trying to ensure that you reserve enough time to deal with your most loyal clients. If your projects are easily categorizable then you can stipulate $x/year for y large and z small presentations. They can then figure out ways to use up the allotment.
3. Switch to billing/estimating by the project rather than by the hour for the clients you know are easy to work with (clear, decisive, pay on time, etc.). This enables you to give them a break while relieving them of fee-creep fears.
You could also ask the clients if any of their other consultants have different arrangements that they prefer. This is a good topic for the periodic (unbilled) check-in meetings you should be having with the long-term clients anyway to be sure that everyone still feels that the relationship is working.
posted by carmicha at 10:40 AM on February 6, 2012
1. Create a tiered pricing schedule where the first x hours are at y rate and then it steps down in increments after that. You can explain to your long-term clients that you've started this approach in 2012 to pass along the savings inherent in working with them: no marketing costs, clear mutual expectations, etc.
2. Create a subscription model which can be framed up positively, as in, you're trying to ensure that you reserve enough time to deal with your most loyal clients. If your projects are easily categorizable then you can stipulate $x/year for y large and z small presentations. They can then figure out ways to use up the allotment.
3. Switch to billing/estimating by the project rather than by the hour for the clients you know are easy to work with (clear, decisive, pay on time, etc.). This enables you to give them a break while relieving them of fee-creep fears.
You could also ask the clients if any of their other consultants have different arrangements that they prefer. This is a good topic for the periodic (unbilled) check-in meetings you should be having with the long-term clients anyway to be sure that everyone still feels that the relationship is working.
posted by carmicha at 10:40 AM on February 6, 2012
you can also justify it by saying that because you have been working with them for a long time, the work has become easier for you to do - you know what they expect, have established modes of communication, etc, so you feel it's fair to share that benifit with them by lowering your prices.
posted by 5_13_23_42_69_666 at 11:49 AM on February 6, 2012
posted by 5_13_23_42_69_666 at 11:49 AM on February 6, 2012
The long-term solution is to find clients with deeper pockets and to more powerfully communicate the quality of your work.
For the short term, I like this from carmicha:
3. Switch to billing/estimating by the project rather than by the hour for the clients you know are easy to work with (clear, decisive, pay on time, etc.). This enables you to give them a break while relieving them of fee-creep fears.
Your clients get one easy-to-understand price. Behind the scenes, you've adjusted that price up or down depending on the value of the project to the client, the ease of working with that client, and how much of a bargain you want to be. That's how I charge now, and it seems to get me better clients because I'm not renting myself out like a commodity.
posted by ceiba at 11:52 AM on February 6, 2012
For the short term, I like this from carmicha:
3. Switch to billing/estimating by the project rather than by the hour for the clients you know are easy to work with (clear, decisive, pay on time, etc.). This enables you to give them a break while relieving them of fee-creep fears.
Your clients get one easy-to-understand price. Behind the scenes, you've adjusted that price up or down depending on the value of the project to the client, the ease of working with that client, and how much of a bargain you want to be. That's how I charge now, and it seems to get me better clients because I'm not renting myself out like a commodity.
posted by ceiba at 11:52 AM on February 6, 2012
Frame it positively. You're now more efficient, and are passing along efficiencies to your valued customers. Ask satisfied clients to refer you, and offer some form of reward.
posted by theora55 at 6:57 PM on February 6, 2012
posted by theora55 at 6:57 PM on February 6, 2012
This thread is closed to new comments.
posted by Pants! at 10:09 AM on February 6, 2012