While it’s tempting to lower your rates (how much you charge for services) in a tough economic climate, it may actually hurt you more than help.

Why doesn’t it make sense to lower your rates in a recession? Because of perceived value. Do you want to be perceived as a Lexus or a Camry? While both cars are made by the same company (Toyota), and share many features, which one would you rather drive if you had the choice?

If customers say they want a Lexus (to continue the analogy) but balk at the price tag, point out the additional value you bring — the features and benefits that come with hiring you and any awards or honors you’ve won or customer testimonials.

Above all, do not cheapen your brand. Remember, you’ve worked hard to get where you are and deserve to make a living. You may just need to better explain your value proposition, both on your website and in person, so prospective clients understand what it is they are getting for their money.

Yes, in some cases, to retain an important existing customer or to sign a potentially great new customer it may make sense to negotiate a bit, especially if it could mean more, better paying work in the future. But be careful of taking on too much work at a lower rate because not only will you be making less money but that lesser-paying work may prevent you from pursuing more lucrative assignments.

Remember, unless you are running a nonprofit, you are in business to make money, and you need to make sure that the work you bring in covers your expenses.

(0) Comments    Read More