How to respond to “Pay Your Dues” discount requests

Sent by Jonathan Stark on August 30th, 2016

Let’s assume you’ve provided a proposal to a prospective client and your contact responds with a variation on one of the following:

“We were actually hoping to use more of your services in the new year. And we usually get a discount when we buy more of something.”

“If you can lower your price, you’ll have lots of work coming through from us.”

“Would you lower your hourly rate if we make it a bigger project?”

These sorts of requests fall into the following category:

Pay Your Dues - Client suggests implicitly or explicitly that giving them a discount now will result in some combination of more work, more notoriety, more clients, or more profits at some indeterminate point in the future.

When a prospect makes such a request, what I hear in my head is:

“If you agree to this crappy deal now, we promise to offer you more crappy deals in the future!”

Um... no thanks. 

The Stability Carrot

The carrot they are dangling in front of you is stability. Giving in to this sort of request will instantly create a bad client relationship dynamic. You will have validated their suspicion that you need them more than they need you. That you are so desperate for work that the mere suggestion of a steady paycheck is enough to convince you to lower your price.

Bad clients don’t magically turn into good clients. In fact, it’s really hard to convert bad clients in to good ones. In my experience, it’s easier to attract good clients than to transform bad ones.

Your Line:

The default answer to any “Pay Your Dues” request is our old standby, the polite No:

“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.”

Yours,

—J

P.S. Pay Your Dues requests seem to be most common when you are billing yourself out hourly. I don’t think I’ve ever gotten this sort of discount request since ditching hourly billing. If you’re hearing this one a lot, you might want to read Hourly Billing Is Nuts :)

P.P.S. I’m doing a free webcast tomorrow (Wed Aug 31) about the mechanics of pricing. There will be a recording available after the event but you need to show up live if you want to ask questions: The Hourly Trap


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