Why I don’t discount my rates

Posted on: August 6th, 2010

A couple of weeks ago I got a phone call from someone who wanted a copywriter to rewrite two websites. He’d got my name from someone who had recommended me. The project was an interesting one and looked to be about 10 days’ work.

Not to be sneezed at.

When I submitted my quote, the potential new client said. “Yes, I’d like you to be the writer on these two projects and I’d like you to start as soon as you are free. But you need to reduce your quote by 25%.”

When you go to the dentist, you don’t say: “I’d like you to cap my tooth, Mr Dentist, but you will need to reduce your charges by 25%.” And when did your accountant or lawyer ever give you a 1/4 discount?

Now, I know it’s only sensible for a client to try and negotiate a better price but my reply was: “Why should I drop my price and work for 25% less when I can fill my working week writing for clients who are happy to pay the figure I’ve quoted?”

When it’s OK to discount

Don’t get me wrong, there ARE times when I do discount my rate. In fact, there are three instances:

  1. When the client is a charity.
  2. When times are quiet (like last year) and the client says “I’ve got a budget of x, do you want to do it?” If you have no other work on and it’s a case of earning something or nothing, then it’s got to make sense to accept a lower price.
  3. When I write for a friend, I charge them “mates’ rates”.

And, if you’re starting out, there’s also a fourth instance. You might want to accept a lower fee when you’re trying to compile a good portfolio of work. However, there’s a problem with that: you’ll find it really hard to get the lower-paying client to stump up your full fee once you’re an established freelancer.

A quick follow-up to the story about those two websites I turned down: three days’ later, I had five new writing projects of varying sizes land on my desk. So my August timetable is just about filled up already, without my having to work at a discount.

What stories do you have about clients trying to squeeze you on price?

8 Responses to “Why I don’t discount my rates”

  1. Pawel @ Self Employed Cafe
    August 6th, 2010

    Hi Carole,

    I believe that the first discount you give to the client marks the end of your relationship.

    And I am proved right of this every time I break and drop the price.

  2. Hannah Marcheselli
    August 6th, 2010

    Very interesting… I think one of the biggest temptations – and biggest dangers – you face as a freelancer is setting the bar too low by undervaluing yourself. I worry that the minute I give a client a discounted rate, they will stop valuing the service I give them. Counterintuitively, I find that people seem to rate your work more highly if you ascribe a sensible value to it in the first place, rather than offering a cheaper rate to get them through the door. I think the only answer is to have a realistic idea of what you’re worth and stick to it. That way you end up with quality clients who you want to work for, and who appreciate your value.

  3. Freelance FactFile
    August 6th, 2010

    @Pawel – so I guess you won’t be dropping your price any time soon!

    @Hannah – the number of times I hear new freelancers say: “I don’t want to set my prices too high because I’m just starting out as a freelancer.” Yet they’ve been doing what they know for years as an employee. You’re so right that your have to value the service you are offering and charge accordingly.

    A couple of years ago a potential new client wanted me to write a new website. He said the usual about “we don’t have much budget”. Big warning bell clanged in my head. He then added: “So I want you to give me a really good discount.”

    You can guess my reply to that. And last time I looked, he still had his original site up there – so he obviously coudn’t get anyone else to agree to giving him a ‘really good discount’.

  4. Angie Papple Johnston
    August 6th, 2010

    Wonderful points! I agree – when they try to ask for a discount, I’ll never give it; however, in some cases I discount services for longstanding clients or those who buy in packages.

    By the way… I love your moving tag cloud. I must’ve spent a whole minute rolling my mouse over it. :)

  5. Freelance FactFile
    August 6th, 2010

    Hi Angie – I’m glad you like my cloud tag! It was the idea of the designer who designed this blog. Did you try clicking on any of the tags? If you do, it will take you to that relevant article.

  6. Angie Papple Johnston
    August 6th, 2010

    I did – I’m infatuated with it. :) And I accidentally clicked the wrong thing and found another awesome post!

  7. Lisa
    September 28th, 2010

    Thanks for this post Carole! I started freelancing by bidding for projects via Freelancer.com where there is heavy competition from much cheaper freelancers from the developing world and I’ve pretty much fallen into the very trap you mentioned. I bid low at first (although nowhere near as low as some people!) in order to compete and build up my portfolio. The feedback that I’ve acquired on the site now really helps me to win new projects but the problem is that prospective clients can see how much I was paid for each project so now I’m struggling to get clients to pay more. I’ve approached this problem by gradually raising my fees and now that I have a strong portfolio it is getting better. Still, clients I’ve worked for that come back for more still expect the low rates I started with – I don’t want to upset these repeat clients but I am selling myself short sometimes :S

    And on a related note. I wrote web copy for a web design firm and the owner was really impressed with my work. So much so that he asked me to become their “permanent” freelancer. As someone new to freelancing, I was really excited by this opportunity until I scoured the contract he sent me and discovered that “in return” for putting all his copywriting work my way, he expected me to write 4 x 500 word SEO articles per month for free! When I refused to do this, he then asked for discounted rates instead. Of course I refused that too – since he’s one of my earlier clients the rates he’s getting are already very low (vis a vis my earlier point). Anyway, I still write copy for him, and to my knowledge he still puts all his work my way, but he gets a cheaper writer in Romania to write his SEO articles for him.

  8. Carole
    September 30th, 2010

    @Lisa He was cheeky – expecting you to write four x 500 word articles for free.

    Regarding your point about charging low rates for repeat clients – you are within your rights to put your prices up. Especially as they have been getting good work at discounted rates. I didn’t put my prices up for about six years and my accountant worked out how much I should be charging, just to keep up with inflation. When I told all my clients my new rates, they were all fine with it. I’d positioned it as they had been getting work from me over the past few years at the same price and now I was realigning my charges with the rate of inflation.

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