When you create and sell websites for a living, (or any creative service tbh), you’re probably going to hear something like the following conversation over and over again.
I told a new prospect what our rates were and they said, “Well, my nephew built my last website for $500. Your prices seem way too high.”
To them, $500 was the most they would ever consider paying. Even though they knew people who had spent tens of thousands of dollars on their websites, more than $500 was unreasonable to them.
Maybe it’s because they think the work is easy. I mean, if their nephew could do it for that much, couldn’t anybody?
Maybe they didn’t see the value in having a better, cleaner, and more effective website than their old one, or they didn’t realize what goes into building better websites.
Or maybe they just couldn’t afford any more than that, and they were hoping that was all they would ever have to spend.
But because they’d never spent more than that, they absolutely wouldn’t dream of budging. Even if their $500 nephew-built website sucked.
I have learned from experience how draining it is to take on clients who don’t understand the value of good work. I’ve been there. I’ve sacrificed my rates to close a deal. I don’t regret it because I learned my lesson, but man, I wish I’d learned it faster.
Also, it is something that I’ve promised myself I will never do again.
However, I also understand that when you’re newer or you’re going through a dry spell, it’s hard to turn any work away, even at lower rates than you would normally charge. When talking to people in the freelance and agency communities who are in this situation, these are the kinds of things I hear time and time again:
“I have too many pain-in-the-ass clients.”
“I wish people would pay me more for my work.”
“I can’t wait until I am busy enough to raise my rates.”
These statements are all very fixable, and the answer is pretty straightforward. STOP LETTING OTHER PEOPLE DETERMINE YOUR VALUE.
So, to go back to that conversation and what their motivation might have been, here are the three types of people that I have come across and have since learned to recognize:
1. No budget – They know what they need and that they can’t do it themselves, but they look for a deal because they can’t afford to pay very much.
2. Lack of knowledge or trust – They don’t understand or care that you have spent years honing your craft, and they don’t understand the value of paying more for more knowledge, experience, and resources. Or they just believe that everybody is out to make a dime, so they don’t trust that you will provide actual value to their business.
3. Lowballers – They will lowball you because they think they can, and they always look for a negotiation whenever possible.
We’ve all run into at least one of these people. Most of us have more than likely dealt with several of each. Here’s the thing, they’re not bad people. They’re either down on their luck, uninformed, (some deliberately so), or they have the “it doesn’t hurt to ask” mindset.
So how do we handle them?
I talk to people all the time who are sure that the service I can offer is going to be a game-changer for their company. It isn’t a ‘nice to have,’ it’s a ‘must-have.’ If the company has been around for a while, I try to dig into what is putting the pressure on this being a must-have.
When we start to discuss their budget, I ask them what they have allocated to spend on making their livelihoods better.
Too many of them have no idea.
So, this is a must-have for your business, and you have no idea what kind of number makes sense to spend?? I used to get irritated when people had no idea what they wanted to spend or hadn’t thought about budgeting for a project like this.
The thing is, it really is my job to make them aware of what they are missing out on by not signing up with what my company offers. When they know how much more money they can make, it’s easier to have a discussion about why I charge what I charge. After digging into what their needs are, where they want to be, and how much more they could make, we can usually come up with a budget that makes sense for both sides.
If you are not able to ask those questions and figure out what the business impact looks like, then you will have a hard time getting people to pay for what you do, let alone sell at a rate higher than your competitors.
And then it’s easy for you to either get offended and wish them luck with cheaper competitors or take a cut in pay. (And then complain about how you are under-valued).
We are in absolute control over this situation, so the only person we can blame is ourselves.
If we do take that client at a lower rate, what will happen is that we begin to resent that customer. It isn’t noticeable at first; the eye roll when an email comes in or pushing a phone call to voicemail. It builds slowly.
How could it not? If you have nine clients who pay your regular rate and one client who is getting a discounted price, how are you supposed to get motivated to work on their stuff? You can’t. And it isn’t fair to them, or to you.
If you have these clients now, it is probably best for both sides to tell them you can’t help them at the current rates and that you understand if they need to work with someone else.
This is the hardest group to deal with because much like beauty, value is in the eye of the beholder. You can’t make a client see value in something if they are not ready to.
I love shoes. I know what I want, I have specific aspects that I look for, and I have no problem paying what it costs for the shoes that I want. My girlfriend hates spending money on shoes. To her, they are going to fall apart no matter what. They are nothing more than a protective covering for her feet. Since most of her experience is with low-end shoes, why should she be willing to pay more for shoes?
After all these years, I still haven’t been able to get her to see the value in spending over $75 for a pair of quality shoes. At this point, I’ve given up trying. (Sidenote: it is always harder to try and educate a significant other, probably not worth the effort. At least not when they’re as stubborn as mine).
Your clients are the same way. Some of them require a lot of free information before they see the value. That could be because they’re fishing for as much free stuff as they can get. Or it may be because they don’t trust you.
If you spend time learning what is best for them and what they need to be successful, you can earn their trust. When they trust you, they will be willing to pay you. Especially because this trust will lead to a deeper understanding of what you do and how it helps them. This can go a lot farther than handing out free audits, reports, estimates.
You can spend time trying to build trust, or you can spend your time trying to validate why you charge what you charge. Spending your time building trust is way more enjoyable and efficient.
This is my favorite group because we have all the control once we are conditioned to stand our ground. They see the value and just want to see how cheap they can get the work.
A friend of mine is in a band, and they recently got signed. I was talking to him about the experience, and he told me that they had great conversations with the people at the label and got along really well, but the first version of the contract was going to screw them over pretty bad.
He got a little mad about it, but his attorney told him that this was part of the process. He said, “don’t walk away from the deal, negotiate a better deal.” He then reminded him that this is what he was paid to do, and it’s much better than the band handling it themselves.
This is the same with these types of clients; they want to see what they can get away with. It is on you if you accept that deal. Don’t take bad deals and don’t get offended. Stand your ground and be willing to walk away if they won’t budge.
“I couldn’t do what we discussed for the budget you are talking about. What should we do from here?”
Watch them figure out what to do and how to proceed. If you ask questions, the pressure is off of you and on them. Let them do the hard work.
People are weird creatures, and it is so easy to make assumptions that lead to strange relationships. Talk to them. Find out where they are and what they need. When we take more time to dig into these conversations, the results will speak for themselves. You’ll see more business, better clients, and have more enjoyment in doing what you do. And more than anything else, never devalue yourself or your work. There may be times when you feel you have to, but pushing through is better than giving in.