August 29, 2016
Reader question about not listing discounts as a line item
List member John T wrote in to ask:
I really like how you say that you’ve taken the non-profit status and mission into consideration, but I’m a little confused by why you don’t include a line like 20% non-profit discount. If you’ve taken it into consideration, why would you not make it explicit and make the client feel more warm and fuzzy by putting that line in there? Maybe it was only a 5% discount, or maybe it was really a -20% discount (for having to deal with their crazy RFP process), but can’t you easily pad the original quote just so that you can put that 20% discount on there?
Fair question. Here are my thoughts on it:
- Setting my fee lower than I would have if I didn’t particularly care about the client’s mission isn’t a granting them a discount. It’s just one factor of many in my fee calculation. Assigning an exact percentage to that one thing would be purely arbitrary. RELATED - I’m giving a free webcast on Wednesday where I will go deep on the mechanics of setting prices for projects. Reserve your spot here: https://www.crowdcast.io/e/jstark6
- If the client is asking about discounts, they are probably viewing your fee as an expense rather than an investment. You want to squash that thinking as soon as you can. Reiterating a discount in writing will encourage more discount thinking.
- Marking up your quote just to mark it down (i.e., padding your quote) is at best silly and at worst dishonest. If the difference between getting the gig and not getting the gig hinges on a phony discount, you probably aren’t the right fit for the project.
You don’t want to be the cheapest option, you want to be the best option.