Throughout the year, there are times when you feel surrounded by businesses offering discounts—especially during Black Friday. But, does this mean that you’re missing out if you don’t offer deals and discounts as a freelancer?
It’s fair to say that most businesses offer sales and discounts for special occasions, including the weekend of Black Friday. In the US, July 4th is another popular date for slashing rates with summer sales.
But, what works for other businesses may not be the best solution for you as a freelancer.
Why Businesses Offer Discounts and Sales
Most of the sales you see are from businesses that sell products, like Best Buy, or companies that sell services, such as H&R Block tax preparation, where multiple people are providing services.
Those businesses offer sales with the thought that a surge in purchases will make up for the discounts they’re promoting. Typically, there’s a margin of markup on all physical products, and all they’re doing is flexing that margin a bit.
And that makes sense for them because they have the room to shift prices within the markup that exists on their products. Businesses that sell products sell them at a higher price than it costs to create those products. Businesses that sell large services price their offer higher than the cost paid to the service providers,
(And that’s how they generate profit. More power to them.)
Why Deals and Discounts as a Freelancer Hurts Business
In the scenario of a freelance service, a margin of markup doesn’t really exist. Your freelance rates are simply your rates, plain and simple. So, if you offer a price reduction, all you’re doing is taking away from potential profits.
Sometimes, you might negotiate your rate with a particular client. For example, there may be a client you really want to work with, but they say your project price is too high. Perhaps you negotiate a reduced scope of work and/or you’re willing to reduce your rates by, say, $5 per hour.
But most of the time your rate will stay where it is—and that’s OK!
The issue with Black Friday, Cyber Monday, and any other discounts as a freelancer is that it makes it seem like there isn’t a true value to your regular rates.
Offering a sale price on freelance services devalues the services you offer.
If you can discount your rate one day, it implies you can discount it any day. And, if you can discount your rates, there is no reason for a client to pay your full rate. They can just wait for the next sale.
For example, if you’ll work on one project for them for $30 an hour instead of $55 an hour once, it’s going to be hard for them to justify paying you $55 an hour the next project.
The issue with discounted rates for services, clients only see them as low and reasonable rates. They don’t recognize that it’s a discount off of your normal rate. And, if you’re willing to do the work for $30, it makes no sense for them to pay you more than that.
Friends and Family Discounts
There are instances where you might choose to offer your close friends and family a more affordable rate. But, you certainly aren’t required to cut your rates to them. Also, it’s totally acceptable to keep your business separate from your friends and family.
Creative Ways to Offer Freelance Promotions
Just because you shouldn’t offer discounts and sales as a freelancer doesn’t mean you can’t promote your business. You just need to get a little creative with it.
At the start of your career, you might want to offer something that can kickstart your business. That doesn’t mean you have to offer your services for less than your going rate.
You could go with a free consultation to give clients a taste of what you could help their business with. (Keep these short, as in under 15 minutes. Again, your time is valuable and you do not want to give it away for free.) You aren’t giving your service away, but you’re explaining what you would do to move their business forward and why they should hire you.
This type of promotion gives you a chance to demonstrate the value you could bring to their company and it can lead to more work in the future. Best of all, you aren’t just giving your freelance services away for free, or cutting into your profits with a discount.
You could also host a webinar that helps you display your expertise to potential clients. Or, you can run a sweepstakes where the prize is a free consultation.
The difference between the offers above and discounted rates is that instead of devaluing your service with discounts, you’re showing your client just how valuable your service is. You can’t ask your client to value your work unless you actually value it first.
There are more ways to offer “specials” but it’s never in your best interest to drop your rates for a sale. You must respect the value of your rates throughout your entire career.
Your turn! Has a client ever tried to get a discounted price? What was your response? Let us know in the comments below!