Business Sluttery: Should I drop my price?

Is your price too high?

dropping your prices 2“Should I drop my price?”

How low can you go?

This edition of Business Sluttery is about a subject very close to my heart! It’s PRICING time!

So, I’ve told you to stop working for free and to raise your prices but what if your price is too high? Is that the issue? I doubt it …

An important part of Business Sluttery is dropping your pants on price.

Ok, I am speaking metaphorically, and pants refers to your trousers if you are in the US/Canada and to your undergarments if you are in the UK – either way, you should not drop them in most business situations … (I’ll leave it at that, thanks)

dropping your pants on price
Oh yes she did!

Are you dropping your pants on price?

So, here’s the deal.

You have someone who is interested in working with you. You’ve already priced your services to make sure you are paid what you deserve. But the conversation is looking a bit like this:

“Is there anything you can do with the price?”
“I want a discount”
“It’s too expensive”

Suddenly, you might begin to doubt yourself. You might be really feeling the pinch financially and just NEED to take on another client. You might just be starting out and want to build your portfolio.

What happens next? You drop your pants on the price, making it so irresistibly cheap, here are the possible outcomes:

  • The potential client decides you can’t be that good because you are too cheap.
  • The  potential client realises you were quick to drop your price and pushes for FREE.
  •  The potential client becomes a client and you do amazing work for a lot less than you are worth.
  • You start questioning why you agreed to work for so little, affecting your self-esteem and self-worth.
  • The business relationship has kicked off on a sour note.

None of that sounds really great does it?

NOTE: Cheap is never irresistible. It leads to suspicion. Think about it – cheap cuts of meat are for the dog, cheap clothes fall apart after one wash… you get the picture. If you are reading this you probably aren’t aiming for this category are you?

What is your business goal?

You need to have a goal. Once you have decided what your goal is the rest is easy, well, kind of.

Do you want to be a huge superstore kind of company, a small boutique, or a haute couture business?

Making the distinction WILL help you establish your position on price (and IF discounts are applicable)

Dropping your pants on price makes you compete on price NOT value

Face it, there are some seriously shameless people out there who will haggle the price no matter how low it is.

I’ve actually had someone (at a garage sale) ask me if they could pay 25-cents for something instead of 50 – I actually GAVE it to them so they’d go away.

Getting into a price debate is often related to value and how you are communicating your offering.

Yes, if you are not effectively communicating what you do the question of price comes into play.

Are you communicating that you are worth what you are charging?

A common problem I see is that what you are selling is NOT clear.

If you are selling something make it OBVIOUS you are for sale, or for hire, whatever word you prefer to use.

Being ambiguous about your services will only lead to more questions and potential time wasters.

Some tips if you have a blog/website: 

  • Make sure you have a clear page outlining your products and services.
  • Get testimonials from previous clients.
  • Don’t cram all your testimonials on one page.
  • Use your sidebar to advertise what you do.
  • Don’t give away freebies, and if you do, don’t make them your core services.

Is your price too high?

It’s possible, but unlikely.

There will always be someone cheaper, AND someone more expensive than you.

If you make yourself irresistible then price won’t become an issue – the client will pay whatever the price because they want YOU.

A lot of people drop their pants on price because they think that’s the problem when in fact, it’s probably somewhere else.

Remember, dropping you pants on price to get the sale will make you look desperate.

You will devalue your offering, yourself and the relationship won’t be a harmonious union for the future. 

If you need help with your pricing contact me today. It’s a topic I am not only passionate about but have a proven track record that correct pricing = high returns.

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36 Responses to Business Sluttery: Should I drop my price?

  1. Hey Ameena,

    I would agree. First, my story! I work as a freelance writer and a few years back I was given a interview series. Because interviews take longer to be done and much work to be compiled, especially if they have to be done in person; I told them that I charge higher than what I do for articles. They gave me so many reasons and basically begged me to lower prices and I just caved in because I got tired of the constant argument. And then the nightmares began; they wanted ALL the interviews to be done in person and they increased the word limits and they thought they could have the prices reduced for the other articles in general. I had them walking all over me.

    Sometimes, it does get hard to say no. But you just have to understand what you business is worth. If you feel you are charging too much, then before listing out the prices, see what others charge for it and make your decision. If your clients tell you that “others are charging way less” then be firm and tell them “All right, they know what their work is worth”; you have to be confident that your work is worth every penny you are asking them of.

    Know what your work is worth; but most importantly, stick to it 🙂

    This is an interesting topic; I am looking forward to what others have to say!

    Have a nice day!

    • Great advice Hajra!

      I loved this “If your clients tell you that “others are charging way less” then be firm and tell them “All right, they know what their work is worth” – I’ve actually told someone to go work with them in the past – My price is what it is!

      Thanks for sharing your story!

      • Oooh, I love that response for when someone says “others are charging way less” — must keep that one in mind. 😉
        I’ve been doing alot of thinking about my own pricing lately, so everytime I come across a blog post about the topic, I devour every word. I’ve been doing freelance writing for a few years and social media marketing for clients for a little under a year, and honestly, I’m never quite sure what to charge for either service. I wish there was a “Here’s Exactly What You Should Charge for Your Services Manifesto” out there so I could know if what I want to charge is in line with reality. 😉

          • Wow, ask and you shall receive! Thanks so very much, Ameena; I read this and it helped. I see you also have other blog posts on pricing, which I will read as well. This is all coming at the perfect time, because I’m having some blog design work done right now, which is going to make my blog look way more professional, and that will help me feel more professional, and in turn more confident about charging more than I currently am. The goal is to nail down pricing before my new and fresh blog launches in the next week or so. : ) Thanks again for directing to your other post on pricing, it’s much appreciated!

      • That’s exactly what I do too. If they tell me others are charging less, I ask them, “Then why have you come to me? Feel free to go there.”

        There are two things an entrepreneur should never compromise on:
        (1) Quality
        (2) Price

        Once you compromise on your price, it will be a downhill ride for your business.

  2. Hey there, coach and inspiration 🙂

    I raised my prices yesterday and didn’t even read this post till now, lol. You make a great point. Higher prices may results in smaller number of clients but in the long run, it is beneficial, it keeps those really complicated people that want it all for peanuts away.

    Not to mention that if I don’t have any clients, I can always just work on my own projects and make money in different ways.

    Love it,keep it coming 🙂

  3. Very, very sound advice Ameena.

    After 10 years in business, one thing I’ve learned again and again is this:

    Price shoppers and those that beat you down are the worst customers EVER!!!!!!!!!!!!!!!!!!!

    Give’em an inch and they’ll take a mile. That’s just the facts.

    One other suggestion I’d add here is that if someone does feel they have to drop their price to ‘get the business’, they should ask the potential customer to do/drop something as well. Almost an eye for an eye approach. I always ask for something in return and it brings balance back to who is/is not in control of the negotiation.

    GREAT article Ameena.

    Marcus

    • Thanks Marcus, great tip there to ask the client for something in return if you lower your price …

      I’ve tweaked my services for a lower price to meet a client’s budget but also changed the terms of work.

      Glad you enjoyed the post!

  4. Sound advice…in THEORY! I do find that it’s so, so hard to say no.

    As a freelance copywriter and content marketing strategist, my hourly rate is solid; it’s on the high side, but I know I deliver consistent value to my clients. But once in a while, I land a new client who wants to negotiate a bit on the fee. The way I’ve worked it to my advantage is that I explain I’m willing to drop my price by 10-15% if they contract with me on a retainer basis. A block of hours, per month, paid upfront and not refundable if they don’t use up all of the time. I figure it’s worth knowing that I have the income in hand to reduce my rate nominally.

    But I agree with everything you’ve said, and there are some fabulous actionable tips in here that I’m going to implement! I need to get those testimonials live!

    • Get those testimonials posted Ruth! They are so important!!

      Saying NO is hard, but it does get easier!!!
      Yes to retainers, my rate changes based on the level of commitment – personally I prefer retainers because it not only helps me know where I’m at each month but it gives me a great opportunity to work WITH my clients vs. for. There might be a new post in there somewhere 🙂

  5. Hi Ameena,
    This is a great post; I like the theme that you use… “business sluttery”… very creative. I think you bring up many great points and your advice would definitely be wise to follow.
    I think that there is some place for “free” in anyone’s business though. Offering a certain good or service for free for a limited time could result in exposure of a brand, and allow it to gain more of a following.
    I would also recommend using a guarantee of sorts as well, instead of providing anything free, or below the target price. Customers would see a money back guarantee, or some reward if not satisfied with the product or service they receive and be more enticed to spend their hard earned dollar. It also shows the confidence you have in your business.
    The pricing strategy also changes when a product or service is offered online, or is completely digital.
    This was an awesome post, and I will keep these strategies in mind for sure.
    I am really glad I found your site, and I have followed you on Twitter!
    Keep the great posts coming!
    -Steve
    @stevekorchynsky

    • Hi Steve,

      Offering a certain good or service for free for a limited time could result in exposure of a brand, and allow it to gain more of a following.

      I think this is a separate discussion. Brand exposure and following isn’t the same thing as pricing.

      Giving a service away for free means you attach zero value to it and the others will attach the same value.

      Growing exposure and following for the brand is done thanks to the value the service or product brings. Not based on it’s price.

      Journalist will write about a great product or service regardless of the price of it.

      • Hi John,

        Thanks for the comment. I see what you mean. Value your service how you believe others should value it, and most importantly back that value up with quality.

        I was thinking more along the lines of promotion.

        Have an awesome Wednesday!

        Steve

    • Hi Steve,

      Thanks for your comment – it’s definitely interesting.

      Yes there is always place for free in a business. If you are service based your content on your site is free, your videos, your newsletters, and your pitches. It should end there.

      If you are product based, similar rules for services should apply, you may wish to give away a free sample but not usually necessary unless you are FMCG and it’s still a maybe.

      Free is not a pricing strategy – it’s a promotional one.

      Don’t know if you saw this post I wrote about working for free >> Yes, it’s another Business Sluttery one 🙂 http://ameenafalchetto.com/pricing/should-i-work-for-free/

      Glad you found this post useful!

      • Hi Amanda,

        Thanks for the reply.

        Pricing and promotion, different tools, got it. I was hinting at promotion, and definitely not suggesting caving under the pressure of potential clients. As you said in the other post that you shared with me,”The ONLY time it’s great exposure (a free offering) is when it’s on YOUR terms and it’s part of your game plan.” There is definitely strategic purposes, and it has to be done in a smart way, making your company look good, and bringing customers back for more.

        Steve

  6. Once I came up with a price I felt comfortable with (which admittedly might be too low), I don’t budge.

    I learned to not be embarrassed by the money involved from a previous job working for a non-profit. I was recruiting for positions changing adult diapers for $1 over minimum wage. I had to be able to say the salary without looking sheepish and to let people know that it wasn’t going to go up much from there. What I focused on instead was the benefits: medical insurance (it was the first time most of my hires ever had it), no high school diploma required, and the ability to get a lot of overtime if wanted.

    Learning to focus on the value of what I am offering, independent of price, makes me so happy I took that job.

    • Hi Tammy, being comfortable with your price is SO important. If you feel any shred of doubt it makes it really hard to sell.

      Great point about focusing on the value vs price. You must be an amazing person to have done that job … I know I could never have done it!

  7. Oh man, I’ve definitely got to stop dropping my pants, er, prices.

    But seriously, I used to do this all the time. Haggle, try to please the client -end up taking a bath on the job. No mas…

    I would see this all the time on elance. I’d put in a bid, then the client would contact me and ask for my “best price”. I’d write back and say my bid was my best price, but they want to keep on going round and round.

    To cut that off I’d just end up sending a somewhat boilerplate response explaining that if they can find someone to do it cheaper then I understand, but that’s my price.

    I would get some of those clients, but as Marcus wrote, sometimes you don’t really want them since you already have a preview of what you may be in for.

    Sigh…why can’t money just grow on trees? It’s 2012, already. We can make a monkey-goat hybrid but why can’t we grow money on trees?

    It is a mystery…

    • Hey John,

      Yes, where the hell is that money tree?

      Well done for standing your ground. It can be super demoralising when someone is questioning your prices. And even worse when you work for less than you deserve.

      If you can find it cheaper then BE MY GUEST go work with THEM – why are you busting my chops?

      Thanks for coming over!

  8. It was the headline. I stopped in to see what business sluttery looks like. Hah.

    Pricing is a serious situation for those without confidence to address head on what they’re worth. And, as businesses grow to expect a discount and there are so many seeking work giving a discount it’s a rat race.

    My thought is to keep your head up and know that what you offer isn’t peanuts. It comes with years of professional experience that cannot compare to those offering a pittance for services.

    • Hey Jayme! Good to see you here!

      Yes, pay peanuts = get monkeys

      It is a question of confidence … but I’ve always found that if your price is too low you’ll always getting people haggling you down further. If it’s right the discussion is very different.

      So, now you know what Business Sluttery looks like … a lot more of this to come .. it’s a topic I LOVE!

  9. No matter the topic, I always have a great time when I stop by your blog, Ameena. Thanks for an enlightening post!

    As you know, I’m working toward bringing my offline profession online this year. “Pricing” of products and services is in the forefront of my mind.

    No buttering up here (as we say in the U.S.) …
    I agree totally with your thought process on pricing. Your reasoning makes sense to me and I love that you’re so passionate about your series on “Business Sluttery”.

    You’ve got a keen knack for making the rest of us THINK!

    So if any of my upcoming clients or customers wish to haggle over the prices I set, I’m simply going to ask them this …

    “What price do you think 30 years of experience warrants?! And if your answer is “bargain basement”, “cheap”, or worse yet, “free” … please go and ring someone else’s doorbell.”

    I’ll exit by sharing my pricing mantra …

    Stay strong, stay confident, and charge what you’re worth! When you discount your prices, you discount yourself. 🙂

  10. Hi Ameena

    Was instructed by @melaniekissell to drop everything and read this post in one of her tweets…so here I am…and very glad too 🙂

    I’ve written on this topic myself and totally agree.

    Lowering your prices is absolutely nuts. The “I’m cheaper game” is sending customers the wrong message. Realistically you’re training them into a buying pattern of holding on to their money waiting for the next round of price cuts or constantly seeking out the cheapest deal.

    Its absolutely mad-ass crazy to think the winner is whoever can withstand the loss of profit the most and realistically that’s what happens when you discount.

    Great post…and love the Business Sluttery title. I’m sensing a kindred spirit 😉 I’ll be back

    • Oooh, goody! You made the trip over, Jackie.

      I’m sensing a “kindred spirit” kinda thing between you and Ameena, too. 🙂

      I love this line in your commentary …

      “Its absolutely mad-ass crazy to think the winner is whoever can withstand the loss of profit the most and realistically that’s what happens when you discount.”

      Spot on!

    • Hi Jackie,

      So glad you found me! Love your take on this topic – looks like we are both equally passionate about the subject of knowing your worth 🙂

      Glad you enjoyed my business sluttery post – more to come … 🙂

  11. Hey Ameena.

    Sound advice. I will admit I work FOR someone not for myself. The firm I work for (big firm architecture) deals with the same issues on a considerably larger scale. There are times when, strategically, we lower price or offer “business development” opportunity to get to know a new client or to get a foothold in a new line of business. The other issue that is abound is that our industry has devalued its services through competitive bidding for years and years. The differentiators being reputation and the skills your people bring to the tables. Yes, clients seek us out for specific work and we have fantastic repeat business but we do have to compete agressively to win that new business. Lowering the value of services for us typically means a reduction in the suite of services you can offer. It’s a catch 22 and we spend a fair bit of time evaluating opportunities before we even agree to take them on.

    As I venture into the foray of the on-line world and start to build my opportunity for consulting in A+D community the value of these entries are huge. So thanks. I recently read Quitter (Jon Acuff) and one of the topics he covered related directly to being able to say no if the situation is just not right. I suppose it’s easy when you are still gainfully employed but the point was that being in a position where you have to pay the bills sometimes doesn’t make it any easier to “drop your pants” just to get the job.

    Thanks again for the valuable insight.

  12. Even though my business is only a few months old, I’m rigid in the client-base that I work with. I have enough business experience to know that price shoppers are the worst folks to deal with.

    I charge based on what I know I’m worth. I’m not the cheapest and my work reflects that. If you want a bottom dollar price, then that’s the quality you’ll get in return – and I don’t offer low quality products/services. For this reason I don’t try to bottom dollar the market and get more clients. The kind of clients I seek understand that quality costs more.

    I’m flexible and will negotiate strategic deals in situations where it makes sense…but I will not just fold and work below my financial standards.

    Fortunately, this is VERY easy for me for my corporate-job income more than provides for my family, and everything I take from my business is icing. But still, I’m not a non-profit, and what I produce comes with an ROI.

    When I was younger and less experienced in the business domain, I was all about getting the business, at whatever cost. Today, I understand that quality can’t be given away cheaply. In situations where I’m offered to by something that’s cheap, I know that quality will be sacrificed, and I can’t have that.

    Great topic!

    • Thanks JK, your insight is really great!

      Yes, there will always be someone cheaper than you – BUT there will always be someone more expensive too …
      Know your worth and remember, pay peanuts = get monkeys 🙂

  13. Hi Ameena,

    I keep coming back to your post to get inspiration and motivation. You’re exactly what I need to get started and get things going. I have got my first clients, and I have already received a few requests from people/companies regarding doing things that is not really what I’ll be doing in my business and for a lower price than what I expect to get. And I have been considering if I should accept it or not, because it’s better to get something than nothing right? Well, I have said no, and that’s mostly because I feel I need time to create my strategy, find my goal, and create my website.. and now that I’ve been reading your take on this, I have more understanding what dropping my price can lead to.

    Thanks a lot Ameena. I find it really hard to be a business man for the first time in my life 🙂

    • Thanks Jens! Glad to see you back and to see that my content is helping you grow!

      Well done for saying no! That’s amazing. “Something is better than nothing” has a place, but only if you are really hurting – generally I still say that it’s not a good way to think about things.

      Know your worth, know your price.

      Keep rocking, sounds like you are doing great!

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