“We’ll have more work later” and other pipe-dreams

Recently I was negotiating a subcontracting project with a colleague. He wanted me to lower my price—to which I had already applied a subcontractor discount—by saying he was sure the client would have more money (and presumably more projects) later. My response was “Great! When your client has a bigger budget, let me know and we can get started on this. If it turns out that your client has steady work, we can talk about a volume discount after, say, six months.”

In my experience, discounting a project for a new client based on the assurance of more work later is folly. By agreeing to lower your price, you signal to your client that you don’t really believe you’re worth what you proposed to charge. You train your client to expect lower prices with no reduction in the deliverable, and you are discounting your time now with no control over whether your client will bring you any additional work later. Even if you explain your discount clearly, most clients will expect the same price for subsequent projects, so you either create ill-will by appearing to have just increased your rate or you accept a lower rate for a client who will always be price-sensitive.

Clients assume that we price ourselves based on our value relative to the rest of the market. By focusing on discounting for proven business rather than a promise of future revenue, you show to your clients that you price your services fairly.

See more of my tips on managing your clients

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