How Low Should You Go? Factors to Consider When Prospects Want You to Reduce your Freelance Rates
If you’ve set your freelance rates fairly, most often you won’t find yourself in the position of negotiating with clients. There’s a value beyond just “the work” that accompanies the rates you charge. Repeat clients recognize it. Your track record of quality work, collaborative nature, reliability and dependability support that what you’re charging is worth it.
But there are times when you’ll find yourself approached by a prospective client who asks you to reduce your fees either by a little – or a lot. I don’t know too many solopreneurs who relish negotiating, but that activity comes with the territory. It can be disheartening, disappointing and downright offensive depending on just how much a prospect asks you to cut your fees, so there’s not only a financial component in the equation, there’s also an emotional one.
After you get over the initial hit to your ego, how do you decide to either gracefully decline the assignment, negotiate to find a middle ground, or accept the proposed compensation?
Consider these things…
Will taking a lower fee cross your “Resentment Line?”
You know what you’re worth – or you at the very least you know what your existing clients are paying for your services. Don’t agree to a rate that will leave you feeling taken advantage of or cheated. Maybe you could justify a 20% reduction to get your foot in the door with a new client, but 30%, 40%, 50%…? You need to draw the line somewhere. Don’t take a project that will make you feel diminished as a professional and resentful of your client.
Are you being fair to your loyal repeat clients?
All clients and the projects they bring you will be different from one another and warrant some fluctuations in rates, but some standardization to your fees structure helps keep things equitable. Would it be fair to your dedicated repeat clients if you offer a much-reduced rate to a new prospect? As a professional, it’s important to build trust – you can’t do that if your pricing screams favoritism.
How badly do you need the business?
If you’ve got more available time than you have dedicated to paying work, it makes sense that you might consider reducing your fees for a prospect. If you really need the cash and the rate offered isn’t highway robbery, perhaps you’ll want to concede. But first consider if your time working on the lower paying project might not be better spent looking for work that will pay you what you’re worth.
Are they willing to narrow the scope of work in exchange for a lower rate?
Clients who honestly have budgetary constraints but who really value what you bring to the table might be willing to contract you to do part of the original project scope. Some projects lend themselves nicely to these situations. In freelance writing for example, if clients are willing to do some of the research, or are willing to write initial drafts, or will otherwise take on parts of the project on their own, I can offer more flexibility with the project rate to better accommodate their budget.
Ultimately, your comfort level – both financially and psychologically – should guide you when deciding whether or not to reduce your freelance rates to get the business. And don’t underestimate the good sense of intuition. If you have the feeling a prospect is all about getting the lowest price rather than the level of professional quality you offer, run don’t walk from the “opportunity.” Go with your gut!
What about you? How do you handle situations where prospects ask you to accept less than what you’ve proposed? Any rules of thumb you can share?
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