Lee gives some simple and effective advice on how to respond to clients who want you to discount your search engine optimization services, but the principles apply to any services, not just SEO. This is somewhat related to a post I wrote last year about how the clients who spend the least are the hardest to work with.
So why shouldn’t you discount your services?
1. You make less money. “But if I don’t discount my services, I won’t get the job at all? Isn’t something more than nothing?”
Yes, but if you think this way you’re making the mistake of seeing each client as every client. If you never discount your services, you will definitely lose business that you could have gotten had you been willing to offer a discount. However, you won’t lose all your business, and my experience is that those accounts you win at your non-discounted rates make up for those you lost by not offering a discount.
2. You work more for less. By definition, when you offer a discount you’re offering to do more work for less money. I don’t know about you, but in my business I’m trying to do just the opposite.
3. It hurts everyone. Supply and demand create price points. When someone offers a discount, they are increasing the supply of a service in the marketplace. One or two people doing this might not affect things, but one or two plus one or two hundred more does have an effect. The effect is that everyone has to drop their prices to get work. I think it’s illegal in the US for businesses to band together and artificially fix prices at a high rate, but if I may propose the idea for the sake of argument, what would happen if nobody discounted their prices for anyone? Some companies wouldn’t purchase SEO services at all, but chances are we’d all make more money. Of course this is great in theory but rarely works because someone is always going to be willing to undercut the rest of us to win the work. But you can make a difference. When you refuse to discount, we all win. I’ll do it if you do it. Heck, I’ll refuse to discount even if you don’t.
So if you don’t want to compete on price, what do you do? Compete on quality. I like the stock answer that Lee gives when companies try to get a deal out of you by promising bigger things down the road (which rarely happens, by the way):
“I can see you’re very proud of your brand. We’re very proud of the results we’ve been able to deliver for our clients. The value we provide our clients is not something we discount. We would be happy to try a smaller project with you and scale accordingly based on the merits of that program.”
That kind of answer builds confidence, and is likely to help you win the job without having to discount your rates. Most companies would prefer to pay a little more and get the results they want. Work on convincing companies that you can get the job done right with a minimum of hassle. Discounting your prices shows that you doubt the value of what you’re providing.