Do discounts devalue your design?

As I was reviewing a few articles here at GDB, I noticed that a trend among many readers that leave comments here at the blog is to give discounts to potential clients. In other words, when trying to rope in a first-time client, some designers prefer to give them a 10% off on your first order or something similar. Today I want to discuss the potential risks of offering design discounts and the effect that it might have on the perceived value of your design.

Examine what discounts are really for

In order to understand where I can coming from, I think it is important to think about what a discount is and how they are used outside of the design community. Think briefly, for example about the restaurant industry.

Which of the following two restaurants would you expect to receive a discount from?

The Fast Food Joint
I won’t mention any names, but you can picture the place: greasy, fast, and cheap. The employees at this restaurant get paid minimum wage and, aside from the first day of work at this restaurant, they haven’t received any official training on preparing food or serving customers. The food is prepared hastily, and in a “cookie-cutter” fashion, but it’s to be expected because, let’s face it, it’s fast food.

The classy bistro
Now I might be biasing you with the verbal imagery in those two titles, but you get the picture right? Imagine a classy restaurant where people enter, are greeted by a very professional maître d who shows them to their table. A garcon greets them and advises them on his personal favorite dishes, the customers place their order and the chefs, who have been trained for years somewhere in the food’s country of origin, carefully handcraft the meal. It’s not as fast, it’s not as cheap, but there is an enormous difference in the quality of the final product.

Returning to the question posed prior to these two imagery-laden paragraphs; you would obviously expect to find some sort of discount coupon or email offer from the Fast Food Joint, not the classy bistro. Why? Because when you go to a fast food restaurant, you expect it to be as cheap and quick as possible. Receiving some sort of discount reinforces that idea. The perceived value of the classy bistro would drop if suddenly, they starting spamming your inbox with special offers or sending you junk mail at home.

Discounts are meant to reinforce the idea that the most important consideration for your services should be price.

You devalue your design when offering discounts

The examples mentioned above bring me to my ultimate point: you devalue your design when you offer discounts to potential clients. Consider what kind of clients you attract when you offer discounts for your design services: the fast food customer or the classy bistro patron? Obviously people who are interested in quick, sloppy, inexpensive design are the kinds of clients you will attract. And who wants to design poor work for little pay? Not me.

Finding a fair balance between cost and quality

This brings us to one of the oldest conundrums of the design community. How do we establish a fair balance between offering reasonable prices for our clients and getting paid enough to create the highest-quality product possible. I have some ideas on this one, but I would like to leave it up to you and ask you to leave your thoughts in the comments.

For a few hints on what I think about finding a good balance, check out some of these GDB classics:

If not discounts, then what?

Some of you might be asking, “If I can’t offer discounts to potential clients, what can I offer them in order to entice them to hire me?” How about offering higher quality service than any other designer they come across? What if you offered consulting services in addition to design services at no extra charge? (By the way, this is a great way for them to get “free consultation” and for you to be able to vocalize your opinions about the marketing decisions they are making in regards to your design.)

Be creative and be original, you can find a way to entice people to hire you over “fast-food” designers. After all, somehow the classy bistro still has a full house on the weekend, right? Investigate how they do it, and you’ll have a client pool full of wonderful, high-paying clients and a portfolio full of high-quality projects.

Help me finish this article…

What do you do to ensure your clients understand the difference between fast-food designers and bistro designers? How do you ensure you are offering your clients the highest level of quality possible? Do you offer discounts for potential clients? If so, do you feel it hinders your ability to charge a fair price in the future? Share your thoughts and concerns, I’d love to hear what you think!

About Preston D Lee

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

Comments

  1. Offering discounts on regular basis devalues your work but offering discounts on special occasions to me is okay. For example, Right now I am offering 20% discount for having worked in the field of graphic design on my 20th anniversary. Again my offer is for a limited time only and for a reason.
    I may end the offer anytime I choose. Also we all have this mentality that offering discounts is bad, actually it is a great way to bring on board new clients. Clients who take up an offering of such are not price shoppers, they do not ask for discounts down the road and value the work we deliver. The kind of prospects that are to watch for are the ones that despite the offering they still haggle and try to get a better deal. So really this can be evident right at start. We all claim to deliver the best products/services but put yourself in the shoppers shoes and try to pinpoint a designer to work with. There has to be more in it for them to want to contact you.

  2. I think one thing you could do is offer a “discount” or something of the like for repeat customers. Especially if the client has referred your name to other customers and several of these referrals actually come through and want your (paid) business.

    • @Bret Juliano, I agree with this – outside of design, we use this as a way to reward our current clients and entice future clients to do the same. When they come on board they know they’re paying what everyone else pays but they have the potential to “earn” themselves a discount for various reasons.

      The best part about this is that you’re not immediately undervaluing your work but providing incentive for your client to stick around and give you repeat work and get themselves what they might consider some “much needed” savings in the future.

    • @Bret Juliano, I give 15% Savings on their next assignment if they bring in a new client.

  3. Here’s a slightly different take on it, Preston: we offer discounts to companies that are environmentally friendly, ethically minded and produce locally. Other clients get the full price. This way we get to work on the sort of projects that inspire us, and still keep our “classy bistro” look. I’m willing to guess that a lot of your readers do something similar.

    Thanks for taking the time to write these articles, by the way, it’s appreciated!

    • @Sunil Sarwal – ditto. We do the same thing for environmentally-friendly clients and the occasional non-profit. It’s more of a “community” thing that it ever was devaluing our services.

      I have also offered small discounts on printing (more of a commodity than design) and occasionally for a specific, special, and limited promotion we’re doing.

      So I believe there are ways to do it without losing the “classy bistro” look as well.

  4. My comment here won’t be as long as I just replied to @Bret Juliano above, but I must say that I agree with you Preston.

    The analogy that you’ve given in this article is brilliant – I’ve never thought of this situation in such a simple and illustrative way, bravo!

    I especially like how this can be adapted to many different industries and can be passed around (like I’ll be doing to my boss on Monday!) so that businesses consider something “new” so they don’t resort to the same old ‘tricks’ in trying to obtain new clients.

  5. I have used some discounts myself, when starting on some freelancing sites. Even with a good portfolio, people are still wary to hire newbies on the system. By lowering my price a bit I was able to get those first clients and make a “name”. It was then easier to grow from there.

    This “the price says it all” mentality is pretty accurate usually, except for the design studios that expect their clients to pay thousands of dollars on a site they get a freelancer create for 300. Of course, they won’t breathe a word to how the “management” was done, since they’d lose their clients. :D

  6. Great article; you’ve brought up some very good points. I can’t decide how I feel about discounts. Part of me thinks that it’s a great way to bring in new clients, reward current clients, or entice the clients you desire to work for BUT I do see your points. However, do you think that maybe just having low rates is what gives a designer the “fast food” feel? I’ve come across some sites that offer $150 logo design with 2-day turnaround time…that, in my opinion, is the “fast food” design.

    I’m still new to freelancing so I really do appreciate your thoughts! Thanks for sharing!

  7. Is discounting the most dangerous word in business? http://www.motionworks.com.au/2009/08/dangerous-word-in-business/
    Best wishes, John.

  8. Intriguing. A true discount offers the same quality of work at a lower cost. The design is just a valuable if it accomplishes the clients’ goals equally. The designer just has to “eat” the loss (time in this situation).

    In some cases this might be favorable if it produces more work for the designer with a particular client, or perhaps steady work. I just wouldn’t get in the habit of offering discounts to everyone. At that point, you’re just devaluing the cost of your services.

  9. Through my mentor, I’m learning even pricing incorrectly is considered a discount, and that you’re actually giving the client money to work on the project. I agree with the idea of giving a long-term, established client a discount, and I’m learning to ask potential clients why they want a discount and what that discount looks like to them. Chances are, the client is thinking 10% but the designer may give 40%, thereby giving too much away without knowledge. Get confident in the prices you charge and know what your monthly statement of income should be, and you’ll be in a better position to determine the value of the discount.

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