Let’s face it, often the people who need your services the most are the ones that can least afford to pay you.
I encounter this over and over again, and I’ll bet you have, too. I was reminded of that this morning while looking at Facebook. Someone had posted a picture of a T-shirt that said, “Yes, I am a Web Designer. No, I won’t make you a website for free.” (shirt courtesy of zazzle.com)
When you are in this situation, what are some reasonable options?
- You could consider doing a trade for services. This works nicely in some scenarios if both of you have something the other person wants. New business owners often participate in trades in order to get what they want and not have to dole out cash.
- You could donate a portion of your annual work to deserving businesses. Set a philanthropic goal of 5% as give-away. (or whatever amount suits your goals) This is a really cool idea and can fulfill that inner need to do good. It could be giving away a set number of services/products, or a set dollar volume that you would honor for non-profits or other worthy organizations of your choice. Don’t forget to get something in return, though. This is the ideal client that needs to do a testimony and send some paid referrals your way.
- You COULD lower your price for certain extenuating circumstances, although you’ve got to be really careful here. It is so tempting to do that when you know that for just an hour (day, week) of your time, you could save their business (make the pain go away, set them on the right path, solve all of their problems.) This is basically not a good option. Your pricing should not be low enough that everyone can afford you. Having said that, there may be times when it seems okay to reduce your rates for a good friend or in a situation where this was a first level solution and the follow on business could be huge.
- You could offer fewer services as a starter solution for a lower price. When you go for the close and the response is, “I can’t afford it,” then your response could be, “I can create a smaller solution for a smaller fee. Which services are the most important for you to start with?” Then rip out some of the things you were going to do and reprice a smaller package.
- You can refer this prospect to someone else who has a lower price point (and does good work). That way everyone wins. As you move up the food chain, your exposure will be greater and everyone will want to hire you (or buy your products.) Give a hand to someone else that needs the work and is more in alignment with the pricing structure your prospect is after.
What are some other ways that you can think of?
Interesting post. In my industry, this is something we often have to deal with on a very frequent basis. What is most interesting to me, however, is it’s not always those who can’t afford our services who balk at our rates … but it’s the bigger companies who simply have the mindset that a Virtual Assistant is simply a secretary and they don’t value our services and don’t understand the benefits. I bartered for coaching very early on in my business – but it was an hour for hour barter. I received an hour of coaching for an hour of service, which worked out quite well. Now, my policy is to refer anyone who isn’t comfortable with my rates (for any reason) to another Virtual Assistance company with rates more in their range. While it might seem to be a good idea to lower your rates on occasion, when you do, you are telling people you really aren’t worth the rate you charge, and really defeat your own purpose. It took me a while to get it through my head, but I eventually learned that it is perfectly acceptable to lose a prospective client because they believe my rates are too high. If they believe it, then they will most certainly be too high for them, which means they are not a good fit for my company. I’d rather donate my services to a charity or to a silent auction for an organization than lower my rates or quibble about price.
Amen, Terry! And you make a good point about the bigger companies quibbling, too. I have also found that sometimes people just want to ask for lower prices just because they think they should. When you hold your ground, often it was just a question they had to ask, and they don’t really have a problem paying!
Appreciate your thoughtful comment.
Gina, pricing is one of the hardest challenges I find when consultants and coaches come to me for business and marketing strategy and figuring out their business model. I am a big advocate of pricing in context and pricing for value. This means many clients cannot afford you, at least not yet. I find that offering a lower price point through training, or a smaller fee project is a way to serve those clients who aren’t at the point they can work with you. Of course it depends on your business, but having at least a few choices works well for most. I like to run a few workshops or offerings a year at a low cost to allow for those who can’t afford to work privately a chance to learn. I’ve also offered bursary or scholarship arrangements. This works for me, maybe it will for some of your readers too. I NEVER advocate doing work for free and caution against barter arrangements. Occasionally trades can work, but only when there is something tangible, of equal value, and a time limit is set. My two cents
Perfect, Sherri! I love the scholarship idea! And totally agree that barters need to be of equal value. Having some annual lower entry price options is another good solution.
Thanks for your input and feedback.
Great article Amy! I remembering reading somewhere (and implement this in my own practice) that we have a robust program and if someone can’t afford the whole thing, we remove certain things to be able to meet (or come close to) their needs. This works very well as long as you believe that the things you take away won’t decrease value or their experience and they’ll still get the support they need. It’s a tricky thing but your article and tips are great reminders on how-to make it work for everyone involved without decreasing value. Thanks!
Brenda – love the term “robust program!” Guess we all face this tricky issue. Thank you for commenting on my post!
Amy
Love this solution: “You can refer this prospect to someone else who has a lower price point (and does good work). That way everyone wins.”. If someone can’t pay my fees, they are not my ideal client and so I am happy to refer them elsewhere so they can get the assistance they need!
Great blog post, Amy!!
Kelly
Great food for thought here Amy. I stand true to my own pricing strategy and value while still being of service to them. i.e. making resourceful recommendations, introducing them to colleagues who might be a better fit, and even following up with them to make sure they’ve found a solution. Often the “can’t afford you/it” conversation is not the reality and the potential client invests after all once they know you care. ~ Gina
I hate trades. If they need you and you need them. They should pay you and you should pay them – even if it is the exact same amount. I also don’t discount services ever, as I choose not to compete with myself. And offering fewer services to make the price less has never worked for us because the client in the end we end up doing the same amount of work.
If it’s not a great fit, I’ll often consult with them on what their next steps should be, give them some advice and ideas, and send them on their — way happy they contacted us — to another designer.
Like your advice to set aside a specific portion of your budget … At one event I attended, the speaker suggested that if you really want to work for free or for less for a few deserving businesses, set aside one day per month to work on low cost / pro-bono clients. When that day is booked up it’s booked up.
Gina, thanks for your comment, especially your point about showing potential clients that we care, which often eliminates the pricing issue.
Much appreciated!
Jennifer – yep. Trades can be very tricky and I don’t do them, either. I like your speakers advice about setting aside one day/month and when it is filled, it is filled.
Thanks for your thoughts!