Growth5 Blog

Wednesday, March 4, 2009

Clients Who Can't Pay Full Price

"We just can't afford that right now, we need to get the price down." - Client X

I was talking to our super fantastic "all things video" friend Brooke McDonald of Houpla! yesterday about Client X. We discussed some options.

If you just lower the price for the same exact work you are saying your work is not worth what you said it was when you put the estimate together. Client X still wants your best work, they just don't have the money to pay full price.

Here are three strategies that have worked for us:

1. Scope: Try to reduce the scope of the project. Instead of five design options, give them two. Work it out with them to cut out parts of the project that aren't as important to them. Limiting the "full service" project/account management by putting parameters around client meetings/calls can bring the price down as well. This can be successful if you have a client that will work with you on this - some clients like being part of the solution. Some are going to call you every ten minutes anyway - you can always say no next time.

2. Terms: Ted Turner didn't fret over price as long as he got favorable terms. Work with the client to see if there is a timing issue with the way you intend to bill. Ask questions. Get creative. The client may have budget constraints now that they won't have soon. Don't be afraid to push this - you might be surprised what your client can actually do / will agree to.

3. Future business: If this is a client you really want long term, consider giving a discount in exchange for future work. Perhaps you work out a maintenance agreement on top of the estimated project where the add'l cost is invoiced far enough in the future to not kill the deal. This way you have locked in ongoing contact with the client to be there for bigger projects when their budgets are increased. You've also built in time to show them who you are and what you can do for them.

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