Thanks to Gene in Ontario, Canada, for writing in, "Here's a question for you; however, please do not get the wrong impression, we have certain clients that cost us money, maybe not every time we do a job for them, but every few times we work for them , we lose money on the project. These clients are hagglers to begin with, so any profit we make on the first couple of jobs is typically lost on the third or fourth.
I would like to be rid of these types of clients. Actually, we (my design production team and I) had this discussion today but exactly how to get rid of them stumped us. Would you have any suggestions?"
Thanks for the opportunity to share some thoughts, Gene. I’ve had clients like this as well—they exist everywhere. Ultimately, you need to determine whether the client is just ignorant or cheap when it comes to haggling with you.
For example, sometimes clients just don’t know the real value of your services. They are ignorant. While that sounds bad, it really isn’t. It’s your job to help to educate your clients about the value of their services. Please note that I used the word “value” instead of “cost.” All too often, clients are more concerned with how much something costs, rather than its value. I might get a cheap tire from a mechanic for $5 (instead of paying $85), but if that cheap $5 blows out while I am going 70mph on the highway, it doesn’t have a lot of value. Work with your clients on understanding the value of the services you provide. They might not be considering the great customer service, the quick turn-around, the wonderful creative ideas you come up with, the peace of mind knowing that you will do the job right, or the ability to reach you anytime, etc. I have a maintenance guy that helps me out once in a while around the house. He charges about $35/hr, but I always know that he’s going to be on-time, friendly, and fair…and I know his work is going to be good. His cost is $35/hr, but his value is a lot more to me. I am not interested in haggling with him or price shopping because I recognize that being able to rely on his honesty and expertise is far greater than what he charges me. I am more interested in value than price.
Of course, there are going to be some clients that don’t see the value in what you do for them. They are not ignorant, they are cheap. These people aren’t looking for a good value; they just want a good price. They are often called “bottom feeders, ” and don’t care that their logo looks horrible or that they may have to call the designer eight times before they get a response (bad customer service), these clients only care about price. It has always been my experience that these types of clients are not worth having. Not only do these clients typically take up an incredible amount of energy, but they don’t see the value in paying for my time or experience.
By the way, sales professionals will advise you that every time someone haggles for a cheaper price, you’ll want to reduce the value of your services—don’t give away stuff for free. For example, let’s say I’ve sent a client a contract to design a logo for $750, and she tries to haggle me down to $500. I would respond with something like this, “Thanks for the response, Sue. I appreciate you being honest with me about your design budget. The $750 is a great value for a logo design/corporate branding. Remember that package comes with up to five rounds of revisions. I’d really like to find a way to work within your budget, so we’ll just reduce the number of revision rounds to three instead of five, which will get us right where we need to be in terms of your budget. If I am able to do this, would you be ready to get started today?”