When Clients Ask for Discounts, Ask Them … Why?

When Clients Ask for Discounts, Ask Them … Why?

I bought several new vests recently. One was from G-Star, another from Banana Republic. They were not cheap, but not unreasonably expensive, either. I paid the price the shop asked from me. What I did not do was haggle over the price with the vendor.

Related: The Danger of Frequent and Predictable Discounts

As a professional public speaker, I have fees, as well, which are listed publicly on my website. I am not cheap, but I’m also not unreasonably expensive. And I always try to be transparent in my pricing. That means that I prefer not to waste my time on price negotiations.

Sometimes, though, potential clients contact me and say, “We’d love to hire you as a speaker. But can we get a discount?” I’ve found a great way to deal with these discount requests: I ask my customers, “Why?”

My usual reply also includes something alone the lines of, “Is there a specific reason you believe you are entitled to a discount?” Without my directly saying yes or no, I’ve thus bounced the question back to the customer(s), forcing them to consider what they’re asking and to give them a chance to point out something that could be of value to me.

Sometimes, clients tell me they cannot afford my standard fee, so they’re hoping to get me at half my regular price. Sometimes, they even ask me to do my work for free. “It will be a great opportunity to present your book!” they say. But this always baffles me. I have never considered asking G-Star or Banana Republic to sell me a vest at half the price, or to just give it away for free: “It will be a great opportunity to show off your t-shirts!”

If I found such vendors too expensive, I wouldn’t have shopped with them at all. Instead, I would have checked out H&M or Zara. So, faced with the discount question, my next move is to tell such clients that I will happily refer them to other speakers.

Sometimes, clients are so big or famous and consider themselves so important, that the magnitude of their arrogance itself seems to qualify them for a discount. They say (or at least obviously think): “You will be able to add our name to your list of clients!”

Fortunately, my own arrogance is quite flexible and, when needed, strong enough to match that of the client: “Indeed, I will! And you can tell everyone that I visited your company, after you paid what everyone else pays!”

Sometimes, clients just love haggling, assuming there are always margins that can be squeezed. My problem with this attitude is that such clients assume that I am intentionally overpaid and that, with some negotiation, it should be possible to talk the fee down to the “proper” price. In other words, they assume I have a lack of integrity (i.e., I’m asking too much.)

Related: The Danger of Discounts and How to Avoid Them

Another possibility is that they assume that I so desperately need the sale that I’m willing to be underpaid, which (to me) seems like a lack of integrity on the side of the client. They might say, “You probably have a special price for friends,” to which I might reply, “I have many friends and my fee is what they pay. I assume you want me to treat all my friends equally and fairly?”

And, last but not least, after I ask them, “Why?”, the clients sometimes tell me, “Oh, never mind. We were just wondering.” Then they proceed to pay my regular fee. I have no objections to that at all.

Notice that I don’t say “no” to people who ask me for a discount. I merely ask them “Why?” because it’s quite possible that they have a very good reason! It all comes down to customizing the value exchange.

It happens that some clients, for example, offer me a speaking opportunity right before or after an event that I have already booked in the same city. Having two or three events back-to-back in the same area saves me a lot of travel time and travel expenses. Obviously, that would be worth a #NoTravel discount.

It also happens sometimes that a client invites me for the third or fourth time. Obviously, I value repeat customers who develop a preference for a long-term relationship with me, which is worth a #RepeatBusiness discount.

There are some clients who order large quantities of my books. Despite the fact that authors like me earn very little per book in terms of royalties, I still appreciate that my message is distributed into the hands of many people. And so that scenario is worth a #BookOrders discount.

There is also value for me in being able to pick a topic of my own choosing and to experiment with unconventional ideas and formats in my presentations. Customers who give me the freedom to do whatever I want are entitled to an #Experimentation discount.

And then there is my much-beloved discount to discourage bureaucracy, which reduces my fee when clients don’t ask me for contracts, tax records, travel receipts, bank statements, procurement forms, visa forms, birth certificates, etc. This #NoBureaucracy discount is basically a reward for good behavior.

There is something else important to realize here: All the good reasons for offering discounts that I listed above can (and should) be translated to clear, unambiguous pricing rules. After all, if you want to be seen as fair, transparent and honest, you have no other option than to apply the same rules (and discounts) to all your clients.
And, yes, the rules are additive, and thus the discounts, cumulative.

When I introduce a new discount rule (sometimes because a client inspired me with a new good reason), I also decide on the start date of the new rule, as if I’ve just passed a new law. All customers invoiced on or after that date will be entitled to the same discount. They don’t even have to remind me.

Today, I sent one of my clients an invoice with a #NoTravel discount. The client didn’t ask for it. He didn’t even know about it. But he earned it because he committed to adapt his own schedule to an existing conference I was attending so that I didn’t have to make an extra trip.

Related: The 4 Types of Online Discount Websites You Could Start

It makes me feel good to offer a surprise discount to those who don’t request one for no good reason. To make myself feel even better, I plan to be wearing one of my lovely new not-too-expensive vests.

Source: www.entrepreneur.com