Common mistakes designers make with clients – Part 2: Allowing a discount

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This post is part 2 of a series. If you’d like to read part 1, please click the link below:
Common mistakes designers make with clients – Part 1: Not signing a contract

For today’s installment of Common mistakes designers make with clients, I’d like to tackle a controversial one: allowing a discount.

I can already here the collective outcry: “What!? No discounts?” But I’m here to tell you that offering a discount to your clients is one of the most common and most deadly mistakes you can make.

Here’s why:

Discounts set a precedent

The first problem with discounts on your design work is that it sets a precedent for your clients.

Don’t think for a moment that you can entice a client to hire you for the first time at a 25% discount and then they’ll pay you full price the next time around. This might work for some designers, but it’s a very risky and somewhat unlikely opportunity.

Discounts cheapen your work

Secondly, discounts make your work and your business feel cheaper. If you’re always competing fully on price, then your clients will see you as a bargain designer.

Instead, try competing on value, expertise, or turn-around time. These sorts of competitive advantages give you an upper hand without cheapening your work of your brand.

Discounts are for grocery stores with rotting produce

Discounts are designed to move product. Grocery stores offer a discount on yesterday’s bread, browning lettuce, and week-old cookies.

Your design isn’t old. It isn’t rotting. It isn’t yesterday’s hot item.

At least it shouldn’t be.

If it is, then we have a whole different problem on our hands. Offering discounts makes you seem like you’re trying to push product like a grocery store. It tells your customers that you are not in high demand and you are desperate for some business.

If you’re pushing a product, maybe the story is different, but since we’re talking about services here, I say avoid discounts like rotting tomatoes.

Discounts can kill your income and profits

Lastly, discounts can kill your income and your profits. Running a successful design business is all about making enough money to live comfortably while doing what you love to do.

Your income and profit are what keep your design business alive.

By offering discounts you are slowly killing it.

Really? I can’t offer discounts?

Since I know there are a lot of you probably asking this even after this post, I’d like to offer one possible way you could offer a discount if you still think it’s the best option for your business (which I still don’t think it is, but I know some of you will).

Overprice your services and then offer a discount so you’re at least still making the amount of money you need to on a project to make ends meet and build your business. Discounts like these still set a precedent, they still cheapen your work, but at least you’re not sacrificing as many profits and income.

Here’s a little secret: most discounts at the store do just that. They’re still making money (meaning they bought the product for less money then they are selling it for at a discount) when you make a discounted purchase.

Do you agree?

I know this can be a little bit controversial, so I’m wondering if you agree. What do you think? Should designers offer discounts to their clients? Or is a terrible client mistake? Let me know what you think by leaving a comment.

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About Preston D Lee

Preston is a web designer, entrepreneur, and the founder of this blog. @prestondlee

Comments

  1. Not only does discounting cheapen your work in the eyes of client – it cheapens YOU, the designer too.

    Our skills are valuable. We work hard. We charge in accordance.

    I’ve fired a client after spending more time negotiating nickels and dimes than working. That’s not why I’m working for myself. Thanks for the uplift.

  2. I agree with you complately … with one caveat. When you’re trying to boost sales/clients in a short period of time, a discount is okay /IF/ you do it right. I offer “I/We Play the Tax” specials because if there’s one thing people hate it’s paying taxes. Here in MB, Canada our tax is 12% (5% Fed + 7% Provincial), and that discount gets more people to call me than, say, 15% or even $20 off would every single time. Good for building up business, but I only use it 1 or (at the very most!) 2 times a year.

    Never discount your work on the first contract otherwise though. Throw in 2 hours Free Training on their new CMS, or get a reseller account and offer 1st year free hosting to get them started; but on Services alone — flagrant use of Discounts will sink you in the end.

    • @Saffron S.,
      That’s a great addition to the article. What kinds of discounts do you offer when you’re running a promotion to boost clients in a short amount of time, Saffron?

  3. Hey Preston!

    I think that in every business we might have an option to give our costumer more value, this can be achieved on many ways possible.

    For discounts I had find my self committing this, but there are ways to do it, Every service must have an Ideal price and a special price; this for when you need to offer a discount, you will have your Ideal price where you get even more money than the money you expect to do at per hour or per project basis and a minimum amount where you are not loosing and still getting income but good enough to give the client a better deal.

    It’s really important to have in mind that you need to create consciousness on your client about the actual price of the product even when you are giving him a discount.

    Educating the client and providing an invoice and Estimate with the actual price highlighted and Providing emphasis on “this is a one time only discount”; though this is something that might discourage the costumer on coming back, if you do this with an already establish costumer they will be happy and probably give you referalls.

  4. Discounts are great when there is continued work from the same person I think. When it becomes a problem is the word-of-mouth promotion. If you charge someone 25% less on a project, when they recommend you they’ll obviously give the price they paid. Your next client having been recommended will expect the same price.

  5. I agree, Preston.

    If you offer a discount, you’re saying that 1) your previous price was inflated and 2) you’re not worth your higher rate. Say that enough and you might start believing it yourself.

    I tell anyone that asks me for a cheaper price that they’re going to get a cheaper product (tactfully). If you only want to pay $100 for something that I’ve quoted at $300, then I’m only going to put $100 into the project. Sometimes people are okay with a cheaper product, and sometimes people decide to pay the extra. Very few of my clients have ever walked away.

    The only discounts I ever offer are for charitable causes. Generally I price them out at full price and then add a discount so that they see what the normal price is and the deal they’re getting. I do this so that if they were to refer me, they don’t go about it saying “oh, we got X for cheap.” They’ll most likely say, “well, we got a charitable cause discount…the full price would’ve been Z.” When I determine the discount, I fully expect to discount all projects with this cause/non-profit at the same rate, and in this way, if I choose to increase my rates, it is not explicitly obvious to them (as I almost always price the project, not hourly).

  6. I absolutely agree. I’ve nearly always regretted offering a discount. I have two exceptions: I have a discounted rate for designers I collaborate with because the repeat business makes it totally worth it, and I offer a discount when a client prepays for a block of time (this is for web site maintenance only, not for design). A similar discount program for prompt payment (within 5 days of invoice date) has done wonders for my cash flow too.

    But in no way would I discount, and therefore devalue, my work. I only make it attractive for clients to pay me quickly, or for designers to make me their go-to person for web development.

  7. Upon further reflection, I’d also like to add if you’re trying to upsell or get repeat or “frequent flier” discounts, I’d entertain a discussion on the merits of that. My interest was also piqued a bit at Margie’s comment about discounts for quick payment.

    Never discount your current project, though. Always discount the next project, if you’re going to discount, which I’m still mostly against. I never say never, but in general I think discounts are generally a poor habit to fall into.

    What is the general consensus on referral “discounts?”

  8. Totally agree as well, one can’t really put a price on services and talent. If the client feels it’s too much for his pocket to let go off, that really means in his eyes, the designer or agency’s professionalism isn’t worth that much to begin with.

    Simply put, it all boils down to respect, say NO to discounts.

  9. Thanks Preston, I’m enjoying this series.

    I do give discounts but only in a few cases:

    If I’m being sub-contracted to, I look at like this: If I had a salesperson, I’d pay them commission. The business you’re subcontracting under is almost like a salesperson because they did all the leg work getting you the job and they’re likely to find you more work.

    I’ll also give discounts if it’s a project that I REALLY want to do and I can see being more profitable afterwards. An extreme example of this would be if Apple asked me to design a logo for them at a discount (Uh, of course!!!). A real-life example was when a potential client that I saw needed a lot of work, got a quote through me and one from someone who was super cheap. I said, “Let me do one poster for you at a massive discount”. They saw why my quote was so much more and since then I’ve done thousands of dollars of work for them.

  10. I agree! The only time I give discounts is from referrals, and the discount is based on a percentage of the amount of the first referral project.

  11. I agree with you totally. It’s easy also to get bullied into discounting. One of the ways I find it helpful to stop this is to think of those hagglers as a “D” client. An A client won’t disrespect you like this. You want to get rid of “D’s” by getting the maximum what you can from them – hey they are doing it to you! Just say no, charge the rate if they pay it fine if they don’t better yet

  12. Yes…. totally agree with you Traci. But sometimes it’s necessary, otherwise next time client would like to find out another source.

  13. Good stuff, excellent, many thanks.

  14. When you write articles, clarify your position, otherwise, you’re not saying anything worth noting !!!!!!

    IF you are talking about commerical accounts with repeat business, then I agree …

    If you are referring to the general public, which probably is a one time deal anyway, jack your price up and give ‘em a big discount …

    The “Average buying public” is stupid and buys the discount almost every time, oblivious of the original price …

    It’s about what they saved!!!!!

    Even web site writers lack understanding what they are writing about !!!

    • @Marvin,
      I hardly think that asking for people to share their opinion on the matter means that I haven’t clarified my position.

      My position seems pretty clear since the very title of the post asserts that offering a discount is a mistake. Then the post shows why I think it’s a mistake.

      What’s to clarify?

  15. I strongly agree with this article! However, that being said, I use a discount in one instance. I do a lot of work for non-profit organizations and local churches. I feel like I contribute to the community in a way through my work for these special ministries, so I offer them a 20% discount. They appreciate this since they aren’t bringing in any extra money and usually pressed on finances to even hire a designer! But I think that design is so important in the promotion of what they do, so offering them a little off is a good incentive in their eyes. Also, I include on the invoice that the discount they are receiving is a non-profit discount only. I get referrals all the time from these organizations to people who want personal work done, and they have no expectation of a discount because they know I only do that for the ministry. It’s seemed to work well for me so far…

  16. My pricing strategy is this: All or nothing. I charge full price to everyone, except for the one or two over a year that get a “Pro Bono” discount – usually a charitable or religious institution. That gives me a tax write-off and makes me and my company look good. Family, well that’s up to you to decide…

  17. @Melissa O,

    Giving a discount based on your referral system is a great idea, it serves a double purpose…#1. not allowing one’s work to cheapen, #2. gives the client something to feel good about.

    :)

  18. I agree on the discount issue.We offered a special discount to help build up our portfolio. However, the responses I’ve received were from people thought that the basic low cost sites we offered were an indication that they could get the next “Facebook” for under $500. The sites that we built under the discount were not worth the time and headaches involved. So we removed the discount ads, and focused on who we are, and what we specialize in.

  19. What about package deals? Usually, (at least for me), once I have say the logo and business card design already in place, designing the letterhead and envelope is easy and is more time efficient than just doing these things separately. Is it acceptable to offer a “bundle” price for things like that? Also, is it really so wrong to offer some type of kick-start special? I’m thinking about doing a mailer, and it seems strange to send something out without a call to action without an incentive, like some type of discount.

  20. I completely agree what you’re saying about designers discounting their work. However, I have one exception where I will provide a discount and it is my decision and not the client asking for one. The cases were I will provide a discount is for a very loyal client that has given me a lot of project work over time. If it has been a particularly profitable project, I will include “a good client discount” (a percentage off the total billing) before submitting an invoice. I don’t do this often and loyal clients don’t expect it every time ~ but they do appreciate the gesture. To me, this is just part of a good working relationship with my clients.

  21. I do give discounts to smaller SBE, or refered customers and that refered will get percentage.

    But that’s just my introduction discount towards them. after that it’s a full price. At my minor study course “entrepeur” the teachers (all succesfull with a own business) encouraged to charge a certain amount as a entrepeneur that seems a lot but also on the other hand normal. If you feel it’s too high (like ur earning 200 euros a day) just slap some discount on it cause that’s when your customers will start talking more about you. mouth to mouth commercial.. And well I can’t complain with the freelance projects i get. Just don’t drop the quality you are offering

    it seems like a lot start to agree and then actually say they offer discount. Well I am pro discount for introductary and a referal fee for more mouth to mouth commerce

  22. I agree and really needed to hear that today. I was toying with the idea of doing it, but your point about them paying a discounted price the first time was spot on. I didn’t think of it that way. Of course they wouldn’t want to pay full price next time! Thank you so much! Have a great day.

    Sincerely,
    Jean Coelho
    MorningStar Creative Studios

  23. I know you like to say that we shouldn’t give discounts, and while I agree with you, I think there are times where, when business is quiet, or when you can see that a client is in dire need of help but doesn’t have the funds right now, it MIGHT be acceptable.

    I’ve had such an experience today..
    I had a client contact me to create a 3page programme design for his company. He tells me that they usually do about 25 of these a year. I send him my first quote.. I quote him at 5 hours at a rate of R350 (which is pretty standard in this country).. He tells me it’s VERY expensive (it totaled R1750) and that the last quote he got was R400 for the entire thing! Chances are, those people were using a template or something.. Cut a long story short, that company closed down, hence him contacting me.

    He figures this is a good time to bring up that he has about 25 of these coming over the year, and he just does not have the funds to spend so much on these things. He also tells me now that with these 25, they are not all going to look alike. There will be 4 different variations of this thing. So I say to him ok, well if we are looking at 4 templates and 25 of these programmes, then I’ll bring my rate down to R300 per hour. I’ll charge for 2 hours to get the template done and then 1 hour to stick in all the copy and such.

    Nope, STILL not good enough for him! He tells me he wants me to make the template a 1 hour job?!?!? WTF??
    Anyways, i’ve told him no can do.. And nope, haven’t heard back from him. But in all honesty, I don’t think any professional designer would go lower than that.

    I can’t believe how difficult some people can get! ARGH! Soirry guys – had to vent somewhere haha!

    • Dennis Schmidt says:

      Samantha:
      This is a discount, per se, because you lowered your rates. However, the second the client said, “I like your price, but not your turnaround,” it became a negotiation. Your best response might have been to agree to the 1 hour template, but at the original price.
      Sad to say, there are just tightwads and “cheapies” who think that everything can be done in the fastest time at the lowest price. But,, I’ve come to understand that there are three elements of graphic design: good, fast, and cheap. Clients can only get two of the three at once; those clients interested in “good” design seem to ignore the other two factors, while those interested in “cheap” design want all three.

  24. DO THIS INSTEAD …

    Discount for no reason is bad because it says you will just discount your fees “if asked” and clients will expect it in the future.

    However you can lower fees if you can justify it.

    For example, if you’re offering a new proposal to a new client, and they can’t afford your offering, you can have a lower priced offering but WITH less services in it.

    Yes, I agree Preston, don’t discount your stuff!

    Kenn Schroder
    Blog + free stuff on how to get web design clients.

  25. Tawanda 321 says:

    Discounts are disastrous to any good Graphic Designer! This is especially hurtful if you happen to put your whole self to a task and after all that someone asks you to reduce your prices e.g. by 15%. That 15% feels terrible to let go because it is not possible to take back the 15% of work you input. Feel as if someone has stolen your creativity.

    It belittles you from the heart and makes you feel used. Who ever said ‘the client is King’ lied when it comes to Graphics! If you hold back your service and offer it to elite clients who understand the value of you service you will feel like a King and also an unexplainable drive to think outside the box and keep doing more creative works of art . .

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