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When to Discount

When to Discount

Mike Lenhart

Recently, I talked about how to set rates for design services. Hopefully this helped you, but there has been a question that comes up about discounting rates and when, and if, do to so. Let me give my humble opinion on this.

Think About It

Of course, rates that we charge are the bread-and-butter for our business and income. Many times, we need to charge what the market will bear vis a vis our expertise level. There are clients that have big budgets (help me find them!) and then there are those who have no real budget but still have a good piece of business for you. We have to keep in mind what we’re working on now and how our load of projects are going. We also have to take a look at the business cycle to determine if a discount is in the best interest of your firm right now. There are a lot of things to consider.

For example, if it’s a new client and you really want to get this person and their business, you may want to entice them with a stated discount – so they know that you’re offering them a special deal. There are also times when you can market discounts – say 20% or 25% off design fees – to your client list or your target list. You’ll need to follow-up on this though, as clients don’t read what we send out. They get a lot of email too.

Also, if you have a good client who gives you a lot of consistent business on a regular basis, it may be nice to give them a special offer on their next project. It’s good customer relations and keeps relationship-building ongoing. If it’s a special occasion or holiday period or even a downturn in your business cycle, why not offer a discount or 2? It’s always worth considering.

Caveat

Watch out, though. If you get in the habit of always offering discounts for your design services, you may find yourself in a trap of low rates and may have a hard time getting out of it. None of us wants to bastardize our services or industry, so be aware of your discounts and how often you use them.

I’m always a fan of offering deals or discounts some of the time. There are also ways of offering discounts in kind, such as offering more than 3 initial design concepts or more rounds of revisions than the standard. Remember to let the client know that this is a special, complimentary part of your offer so they can see value in it. Be creative. You know you can do that.

And One More Thing

What about pro bono? Oh boy, it’s a big can of worms sometimes, especially with non-profits. It’s always worth taking pro bono requests on a case-by-case basis. There may be times when you want to do pro bono projects, but just keep track of them. It’s nice to have a pro bono policy, as well as discount policy, in your business or marketing plan. It’s good to keep track of what you’re doing and the revenues made from each project. It’s a pain to do sometimes, but it’s worth it.

Read: What Do You Charge For Graphic Design?


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