Thursday, 27 March 2014

The $100 Follow-up

On Tuesday, I wrote a post about how it's better for $100 to do 1000 words than 2500. Today there is something else I'd like to mention in connection.

You may frequently come across the argument that you should give discounts for large jobs — because they bring more business to you — or for any jobs, really, because otherwise you wouldn't get those jobs.

And just to be sure: the argument has some merit. We can debate the propriety of it (i.e. of telling a service provider to cut his rates just to be hired, especially if it's either that or no deal), but the merit is there — as in, getting work is an advantage over not getting it, if it applies to you. (And if it doesn't, that's not your fault.)

But chances are the advantage doesn't apply to you to the same extent the client may be led to think, or is not quite as large. Here are some things to consider:

  • The $100 is not a gratuity, it's a wage of work, probably hard work at that, and not for an exorbitant price, either. Definitely, the entire $100 (or such other price as you may be charging) is not sheer profit, rather only a fraction of it is. This may be harder to notice for your clients when you aren't a seller of products or reseller of somebody else's services. But your own labour definitely is a cost in providing your service, as hard as it may sometimes be to get it recognised as such (e.g. in your taxes).
  • Often there will probably be some other work from other clients, sooner or later. The benefit comes down to getting more sooner and with more certainty. But the difference is not today or never, 100% chance versus 0% chance. The advantage lies in the difference. The difference is what you are getting in the deal.
  • Why should you need to surrender the entire benefit of the bargain to the client, as opposed to both of you walking away with some? (Which is something that — for a client — may be difficult to notice initially but not really hard to accept as a valid point.)

Bottom line: the benefit lies in the difference. Benefit = difference, basically. The difference makes the benefit of the bargin. Your clients may the confusing the entire value of the transaction with the benefit of the bargain (i.e. the difference it makes), so set the record straight, gently. This error is easy to make, even for smart people.

It's perhaps important to note that explaining things calmly, reasonably and in a way which is easily understood and accepted as valid is a good way to project or enhance your professional image.

The challenge here is to send the message in a way which allows you to remain humble and avoid sounding dismissive, which is difficult to accomplish when you're effectively telling someone that you'll be booked full either way, which implies that the potential or even existing client and his jobs are replaceable.

Keep the two things separate. Your clients matter to you, as does the work they hire you for. But your dedication to them does not mean that you need to apply flawed calculations and arguments to the discounts you give them.

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