I bet everyone reading this that has been in business for more than 5 minutes has dropped their rates for a multitude of reasons. And if you are honest, you've probably done it more than once.
- You get a fantastic lead come in
- You have a conversation
- Find out that you are a great fit…
- … you move to the offer
Only to have your potential client respond with “That sounds great, but I can’t afford it.”
Do you lower your rates?
For a lot of business owners, their first response is to lower their rates. You justify it to yourself by coming up with all sorts of logical arguments in your head
- they really do need my help.
- Its good karma
- They will talk about me with their friends, and refer business to me later.
Maybe. But more likely than not. What you end up with is a client who takes far too much of your time, for less money than you deserve. You wind up regretting the decision, and wondering why you aren’t earning the living you know you’re capable of.
I've been exactly where you are right now, justifying lowering my rates. In my transport company it was such a frequent conversation it became almost expected! In our business now we have this daily; can you build me a website for £100. When you are starting out sounds like a great deal; a quick easy website couple of hours work for £100.
Trust me when I say IT'S A NIGHTMARE.
Every single client I have dealt with that has had the privilege of us dropping our rates has taken advantage. They became ‘that' client that drives you mad as they expect always much much more than they are ever willing to invest. They play at a much lower frequency in business and will only ever bring your drive and motivation down… I'm cringing just thinking about it.
Does This Sound Familiar?
I want you to make a promise to yourself right now that you will never again lower your rates to secure a client. Doing so devalues your services, makes the client less likely to follow through, and even worse… It makes you feel terrible later.
Now, I’m not saying you can never offer special deals, these are very different. But I do want you to change how those offers are made. Here’s one way you can do this
If your coaching package includes:
- 1 45-minute call per month
- 1 email per day
- 1 in-person meeting per quarter
- 1 mastermind retreat per year
And you put forward your proposal because it's exactly what your prospective client needs yet they claim to not be able to afford your asking price of £1,000 per month. Rather than offering to reduce the price which may be your gut reaction (especially if times are tough), you are going to offer to reduce the price and the package.
So the offer you make to them now includes everything BUT the mastermind retreat. Or everything BUT the in-person meeting every quarter.
You have not lowered your rates so far that you feel used, but at the same time, you’ve worked with them to create a plan they can afford. It’s a true win-win for both of you.
This works beautifully in every situation I have come across. When we have offered our 13-week coaching course or mastermind package and we have looked at how we can reduce the package to fit the named budget it's always a yes, and the great thing is you continue to deliver on your promise. Plus the client is happily receiving what they need at the investment level they can afford at that time. This doesn't mean in the future they won't level up what they require as often I have found when ‘stage 1' or the initial training is underway their motivation to find extra resources is often miraculous.
This technique can be used for any type of coaching or service unless you’re charging strictly by the hour. If that’s the case, take a look at how you can reduce the number of hours you need to invest while still providing value.
For example, rather than offering four one-hour calls, change your plan to just two calls, with email follow-ups. They still get plenty of value, and you’ll free up some time by inviting email questions rather than blocks of time on the phone.
Next time you’re asked to reduce your rates for anything, take a close look at how you can also reduce the work you’ll be doing. That way you’ll never feel as if you’ve been taken advantage of, and your clients will still get great service.
Tell me your experiences of how you may have lowered your rates before and how that worked out for you