Sometimes when freelancing, there are situations where you may feel it's appropriate to offer discounts. These could include a large order or if a client wants to pay you monthly on a subscription basis to complete a certain number of tasks every month. You could decide the reliable income is worth the small discount. You may also offer a package deal or do pricing packages.
However, there will always be someone who asks for a discount. Some clients like to change it and see what lower price they can get away with. As a freelancer, it's up to you to decide if you want to accept or refuse.
In this blog, we'll tell you exactly how to handle the times when a customer requests that you work for less.
How to handle clients who try to start a price negotiation
A critical freelancing skill is handling price negotiations and standing your ground if you need to, so you must be good at this. You can't always blame a client for asking for a lower price. They have their budgets to follow, and if they can get it for less, they will try.
However, you can take steps to ensure the price negotiations remain calm and professional. They are never fun conversations to engage in, and it can be tempting to lose your temper. But you're more likely to get what you want if you “kill them with kindness.”
Be polite but firm
Even though it's insulting when someone asks you for a lower price, you mustn't fly off the handle. Instead, be polite and warm. That doesn't mean rolling over and taking whatever rate they will give you, but it means being assertive instead of aggressive.
When discussing your services, if a client asks for a lower price, you can calmly reject their offer and reassert that it will be the full price based on their requirements. If you want to, you can elaborate on the many factors that go into your pricing strategy, but that's not essential.
For example, instead of saying: "Thanks anyway, your budget is too low."
Instead, a sample email reply could be:
"Thank you for the offer.
I price myself based on the value of my work, and there isn't any wiggle room for lower rates at the moment. I understand my services aren't within your budget currently, but if anything changes, please feel free to reach out in the future. I'm interested in this project and would love to work with you one day. I'm happy to have a quick call with you to discuss my rates and your budget.
In the meantime, I hope you find someone within your budget."
The second message leaves the suggestion that they could change their mind and come back to you at your full price. You've been courteous, and you haven't got angry with them for offering a much lower rate. But you haven't caved either. You stood your ground regarding your rates.
Be ready to make your case
If you do decide to engage in price negotiation with potential clients, you should be ready to make your case for why you charge the way you do. If you want to, you could prepare email templates in advance, giving information on your rates and value, so you don't need to type it out fresh every time. Chances are, you'll have this conversation more than once.
Before this conversation, you should determine a minimum rate you'd be willing to work for and never go lower than it. It's essential to remember your freelancing is a business. You're not doing it for exposure or fun. You're doing it to make money. Explain that to the client.
Don't accept work that will not be worth your time and effort.
As a new freelancer, it can be tempting, especially because you want to make a name for yourself and get the experience. But accepting projects that take too much time when you could be focused on marketing, and selling yourself to potential clients who are happy to pay your worth, costs you more in the long run.
Don't preach to the client
This also isn't the time to send the client a five-page email rambling about prices and why freelancers deserve to be paid for their work. When someone is lowballing you and asking for a lower price, they are not interested in why you're charging what you are. To put it simply: they don't care.
The best option is to save yourself time and effort and move on.
General tips to remember when a client asks for a lower rate
A fundamental way to avoid engaging in price negotiations is to write a comprehensive proposal before you approach a client outlining your expectations.
Here are some tips for when a client contacts you requesting a lower price.
You don't have to say yes to the discount request
You don't have to say yes when a client pushes for a lower price. Clients don't have your best interests at heart. They are looking out for their bottom line. It's up to you to decide whether or not the work is worth the original rate or if you're willing to go lower.
You need to make money as a freelancer, and you're the expert in your industry and work. You know how much to charge. You can always say no, and the client has the option of sticking to your original rate or finding someone cheaper.
Know your worth
When someone has a true objection to your price, it's up to you to decide if their lower rate is worth it. You should know the value of your work, and you don't want to price yourself lower than you're worth.
Part of this is confidence and having the confidence to assert yourself. You can also browse freelancing websites to learn how much other freelancers charge for the same service to ensure you're pricing yourself competitively.
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You can fire a client
If a client has become too difficult to work with, whether it's because they constantly ask for lower prices or another reason, you can always let them go. Freelancing is a business, but you still want to enjoy it and your work.
There is always the opportunity to let a client go. You don't need to do this harshly. A simple message will suffice:
"I enjoy working on these projects with you, but unfortunately, my schedule has become too full, and I need to let some clients go to prioritize my workload effectively."
However, if you're letting a client go primarily due to their low rates, you could include that in the message and allow them the chance to offer you more:
"Thank you so much for the work you've given me. I have enjoyed our time working together. Unfortunately, I can no longer continue working at the current rate specified, and I have decided to raise my rates to [insert price here]. I would love it if you were happy to continue paying me at the new rate. However, I understand if I no longer fall within your budget requirements."
Again, you've been courteous and polite. You want to keep the client happy if they decide to pay you more, and being nice about it will get you a lot further.
Sometimes there's a reason behind it
It's not always new clients who approach you, asking for a cheaper price. Sometimes it can be clients you're already working with. It could be for several reasons, their budget could have been slashed, or maybe they're not performing as well as they'd hoped.
Once you're working with a client and they ask for a discount, it's up to you to decide if you need to drop them or if you're willing to work for the lower price. It could be a temporary measure, but there's no guarantee. Sometimes you could offer payment packages, which mean they get 10 hours of work from you a week for a set price, or you could set up an annual plan for them to pay you monthly for a specific number of tasks and offer them a discount that way. It's a reliable income for you, and they feel like they're getting a good deal.
If you've worked with a client for a while and have a good relationship, you might not want to lose their business. Again, the choice is yours.
Asking for a lower rate could mean they're a difficult client
A lot of the time, when a client asks for a lower rate, they don't place much value in the work you're completing. Sometimes these potential clients want to squeeze as much work and effort from you for the lowest price possible. It can be more effort than it's worth.
If you're a new freelancer, you often fall into the trap of working for these demanding clients because you're willing to take any work possible to get experience. But as you develop your freelancing career, you'll recognize these clients and spot the red flags.
Measures you can take to ensure you have rate transparency with your clients
One way to ensure you don't encounter a price negotiation with your new clients is to be completely open and transparent about your pricing straight away. You can use client management tools to manage contracts, invoices, and proposals to help you quickly manage client expectations.
Use an excellent proposal tool that highlights your rates
Whenever you bid for a gig on a freelancing website or contact a client via cold-emailing, you'll be making a proposal to tell them exactly why they should hire you. In this, you'll highlight your expertise and capabilities, showcase your experience, and discuss your rates.
Discussing your rates upfront is beneficial to both parties. For the client, it allows them to decide if you're within their budget. For you, it means you don't waste time working for people who can't afford your prices.
When writing your proposal, you could price yourself higher so that if they ask for a cheaper price in their response, you have some wiggle room to negotiate with them.
Indy's proposal tool lets you create professional and detailed proposals with thorough estimates so clients can understand exactly what your prices are and decide if you're a good fit for their company. You can use those estimates to create invoices later, so you're saving yourself time and effort in necessary (but time-consuming) admin tasks.
Use client management software to support you with ongoing contracts
When working with clients, prices can change depending on the length of the project or what type of work you're doing for them. As you're providing a service, and they are your customer, it's helpful to have a detailed contract laid out before starting your work for them. In the agreement, you can discuss your rates and the services you'll provide for them.
You want your contracts to be professional and easy to read for clients who may not understand all the industry jargon. You can use a contract management tool to create contracts that outline all the necessary terms. Using Indy, you can monitor the contract's status to see when a client has signed it so you can start working.
That way, if you ever deal with a situation where a current client approaches you about changing prices, you can redirect them to the contract they've signed. But it's also helpful for ironing out all those issues with new clients.
An essential part of the sales process when you're a freelancer is organizing the rate of pay. Some clients aren't happy with your initial offer and want to negotiate a lower rate. To speed it up, you can use email scripts or templates you've prepared in advance to ensure you're getting all your points across every time.
Remember, as a freelancer, it's always up to you if a job or client is worth your time and effort. Don't price yourself lower than your value. But always be kind and polite when negotiating with someone, as kindness will get you further than being abrasive or aggressive. You still want that client to think you're the best person who can provide this service.
Now you know everything you need to engage in successful price negotiations with clients, so you're well equipped to respond when someone asks for a lower price. Good luck!