Negotiating Design
This topic is one that has been on my mind for a particularly long time, especially because it comes with a lot of frustration sometimes! Since I got into the design business I have heard the same phrases over and over again when it comes to price negotiation. I’d like to share a few of these typical phrases and in particular how you can respond to them in a confidential and professional way. First of all, there are some general tips you should always keep in mind:
General Tips for price negotiation:
Tip No.1: Don’t take it personally when clients ask for a price reduction. Stay professional and confidently stand by your pricing.
Tip No.2: Show understanding and empathy. Try to uncover the reason behind their request for a discount. This demonstrates that you care about their concerns and builds trust.
Tip No.3: Highlight the key benefits of working with you. Clearly communicate the value you bring to the table.
Tip No.4: Avoid pressuring potential clients. Instead, guide them toward their own realization of why investing in quality design matters. Ask thoughtful questions about their business goals. For example: How do you want your business to be perceived? Most business owners understand that to project a high-quality image, they need to invest in high-quality work.
Claim 1: “We just started with the business and do not have a lot of money for the design.”
I have heard this sentence a lot of times. But my opinion is: Especially then it is important to invest money in a good design. It’s like publishing a book but not investing money to give it a good cover design so that people choose it in the first place.
..and how to respond:
Dear [Customer],
Show empathy: I can only image, that at this point in time you may probably have a tight budget and I’m sure there are a lot of costs involved in getting started with your business.
Start with a question: However, may I ask if you already have an active customer base? Because especially if your company is still in the starting blocks and a customer base or reputation are not yet given, it can be all the more important for your business to invest in a well thought out design/market/marketing strategy.
Name your pro’s: The visual appearance of your company gives your new customers the very first impression on your business and its offerings, and as you know – first impressions count!
Therefore, investing in a well thought out corporate design strategy in the beginning, can save a lot of work and costs in the long run. Nevertheless, I always recommend my clients to stick with their corporate design for the first few years, to build a proper reputation and a unique corporate identity.
Offer a discount (if you like): However, what I would like to offer you a once-only, new customer’s discount of __ percent, to get startet with your own individual design strategy for your business.
Claim 2: “I have seen much lower prices on other freelance websites.”
With the rapid rise of digital platforms, I hear this phrase from customers more and more often, and you need a good answer at hand to convince customers from your prices in comparison to these astronomically low price offers on those websites. In this case I usually name some of the biggest downfalls that come along with those websites. You don’t have to list all of these aspects so that the customer does not get the feeling of being lectured. But naming two key differentiators can be an eye-opener for the customer.
..and how to respond:
Dear [Customer],
Show empathy: I understand that you find the different price offerings for the supposedly same service, confusing. Therefore, please let me briefly explain to you why I differentiate myself from such websites for the following reasons:
Name con’s of cheap freelance platforms:
- Outsourcing: Designers on those websites are able to work on much cheaper rates if they live in countries with low costs of living
- Lack of Quality: Those websites focus very much on efficiency and fast-speed delivery. The Problem with those websites is: You never know what quality you will get.
- Lack of communication: What makes it difficult sometimes is the lack of communication.
- Scams due to digital anonymity: It is not uncommon for scams and copyright infringements to occur on those websites due to the digital anonymity. And having to deal with the legal consequences in the end can be very frustrating.
Name your Pro’s:
- Educational degree: Due to my educational degree I approach my work with the appropriate professionalism and strategy.
- Close customer support: I offer high-quality customer support to my clients by starting of with a comprehensive design briefing. It’s in my interest to really understand the needs of my clients and to create ideal an individual design solutions
End with: It’s always good to do a price comparison, however, you might want to keep these points in mind when choosing the right designer.
Claim 3: “We are good costumers.”
Sometimes it can happen that customers contact you who have actually already worked with you on one or more projects. In this case it is quite appropriate to give them a price reduction.
However, you should be careful not to give in to this statement too often. Otherwise it might happen that the customer does not value the time and effort you put into your work and will always demand a discount. If you gave him a discount the last time and he repeatedly ask for a discount you can politely remind him of the last discount you gave him and offer him a future promotion for every 5th purchase. Therefore you kindly remind him that you do not give discounts every time. Another option is to offer them a better price if they increase their order.
..and how to respond:
Dear [Customer],
Show empathy: We are very pleased that you are considering our offer. Of course, we appreciate that you are one of our loyal and long-term customers.
Offer Loyalty discount: In this case we can give you a special loyalty discount of 5% on the offer price.
Offer future price reduction: Unfortunately our records show that you already received a discount on your last order. However, we are happy to offer you a future ___% discount on your next order.
Offer discount on higher order: Currently we offer your clients a discount of ___% for a minimum order of ____$.
Conclusion
This article is not intended to give the impression that you should always stick to your price expectations without making any compromises when it comes to the customer’s price expectations. But it is important to firstly understand why your customer is asking for a lower price and then be able to respond to it in the right manner. If you feel like the customer respects your work and is not trying to undercut you completely, then you can, for example, make a counteroffer that seems reasonable and still profitable. If you back up your offer with the above mentioned reasons, you are well prepared for the next price negotiation with your clients.