August 24, 2016
How to respond to “We’re Broke” discount requests
Let’s assume you’ve provided a quote and your contact responds with something like this:
“It’s hard enough for us to make money as it is. Could you do it for $X instead?”
This request falls into the following category:
We’re Broke - Client claims that they simply don’t have the budget to cover your fee. This could be true, a misconception, or a bluff.
Let’s imagine that you have some reason to believe that you know which of the three possibilities is the case:
- They really don’t have the money
- They think they don’t have the money
- They’re bluffing
Your Lines
I’ve broken your lines down into sections based on what you think the client’s situation is.
1. They really don’t have the money
If you really believe that the client doesn’t have the money, your qualification process needs to be improved. In your sales and marketing materials, you need to express - implicitly or explicitily - that you are expensive. You shouldn’t be wasting time on clients like this.
Okay, but here we are and you have to reply...
If you DON’T want the gig, say:
“I can’t do it for less, but I’d be happy to recommend a junior dev who might be able to work within that budget. Would you like me to make an introduction?”
If you DO want the gig, say:
“I can’t do the work as described for less, but I’d be willing to work with you to try create an option that will meet your budget.”
NOTE: I’ll specifically address non-profits in a future message.
2. They think they don’t have the money
The client says they don’t have the money but you have reason to believe that they do have it somewhere. In this case, it’s a priority issue, not a resource issue.
Here’s what you say:
“C’mon... You guys are probably spending more to have the trash cans emptied. What’s the real objection here?”
NOTE 1: This is a tricky one that is best delivered with humor in person or over the phone.
NOTE 2: To avoid this in the future, do a better job articulating the value in your initial Why Conversation with the buyer.
3. They’re bluffing
If you believe that the client has the money allocated and is just in the habit of asking for a discount regardless of the situation, here’s what you say:
“Thanks for asking, but I just can’t make a business case for lowering my price. PLMK if you’re willing to move forward at the quoted amount.”
What if you don’t know?
If you don’t know for sure which of the three scenarios above is the real client situation, default to number three (i.e., “...can’t make a business case...”)
Questions?
Do you have any questions on these lines? Just hit reply and let me know.
—J
P.S. These lines are predicated on the notion that your quote is a fixed project bid, and NOT an estimate based on an hourly rate. If you’re not sure how to escape from hourly billing without losing money, you might want to read my book: Hourly Billing Is Nuts.