A client called me to discuss a dilemma she was facing which, I find, often befalls small service businesses and freelancers. Should I compromise on price/day rate to win a potentially prestigious piece of work? Before launching into my usual tirade of – no, never compromise your rate, there’s no going back, anyone can give it away – routine, I stepped back for a moment to give it some serious thought.
Although fundamentally I firmly believe that if you have the right business model with accompanying pricing structure in place you should stick with it, there is still sometimes room to structure a deal differently. And, the advantage of being a small business, is that often you probably have the power to make that decision without the need to get through layers of ‘sign off’.
So, when should you consider making a ‘deal’ and what questions do you need to ask yourself before committing to it?
- Does the client meet your ‘ideal customer’ criteria? That is, are they in your target audience, perhaps someone you have been trying to work with for a while or are they a really influential player in your sector? If they don’t meet your criteria then they will probably get more from you than you will from them. If they do, then why not start a dialogue?
- What will the deal offer you over and above hard cash? This clearly is the most important question to answer so that you can actually evaluate and put a value on some of the less tangible benefits you may receive. You may be promised exposure on the clients website or newsletter, a great PR opportunity, social media coverage or a prominent position in their store; all of which needs to be backed with hard facts. Ask about hits on their website, footfall through their store and engagement with their social media to make sure you are getting some real value. Also be clear about timescales – how long will your information be visible?
- How will you make the most of any intangible benefits you earn? This is fundamental and can turn a good deal sour. You need to be in a position to take advantage of any promotion and exposure offered, and have a plan to activate it. Do you have sample product, blog posts, press releases and images to really make the most of the opportunity? If you don’t, then it has little value to you.
- Who does your client know? Can your client provide any genuine referrals that could lead to future business for you? Do they have contacts with potential clients that you are looking to meet and can they make an introduction?
- What is the motive behind the deal and does it seem genuine? If you sense that your client simply wants the job for less, then beware. If there is a genuine reciprocal benefit for structuring the deal in a certain way then talk it through openly.
- What will the long-term impact be? Again, if you have an open dialogue with your client you are more likely to understand where the relationship could lead in the future. Short term gains are usually one-sided whilst a genuine desire to think differently about how you work together could be the start of a great long-term partnership.
And finally, make sure you have everything clear and in writing before you agree. There are no cast iron guarantees, but you can at least feel confident that you have done all you can to make the best decision for you and your business.