The Quick & Necessary Steps You Should Take if a Client Doesn’t Like Your Quoted Price

when client doesn't like price
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It’s so nerve-wracking to hit “Send” on an email that contains a proposal.

“Did I price too high? Too low? Did I leave anything out? They’re going to hate it, aren’t they? Crap, maybe I should’ve priced it lower. Ahhhh!”

Even after 5 years of sending proposals, they still give me nerves. I get a knot in my stomach and it’s hard to think about much else until the client sends a reply.

Fortunately, most proposals get accepted these days. But of course, some always fall through the cracks.

The thing is, just because someone’s initial answer is “no”… doesn’t mean that’s their final answer.

This blog post is about how to change minds. It’s about turning “no” into “yes” and stopping more projects from falling through the cracks.

And it’s about doing it in a way that doesn’t make you look desperate. And it won’t de-value your services, either. It’s also not pushy or salesy or anything like that.

It’s actually quite nice.

Sounds good? Then let’s dive in.

First: We need to figure out if the problem really is money, or if it’s something else.

If you receive a “no”, it’s almost always for one of two reasons:

    1. The price really is too high. They literally don’t have the budget for it.
    2. Your client didn’t see the value in your price, and they couldn’t wrap their head around paying that much for what you’re offering.

If most of your proposals get accepted, chances are you’re doing a good job at communicating your value and #1 might be the reason for your few and far between no’s. Good news: You can turn a good bit of those into yes’s if you so desire (and I’ll show you how in this post).

But if you find your proposals are rarely getting accepted, then you’ve got a much more serious problem on your hands. There’s something in your sales process that’s communicating that you’re not worth as much as you’re asking for.

Or you’re just not getting the message across clearly enough.

If that’s the case, check out these two blog posts:

Selling the heck out of your design services, part 1

Selling the heck out of your design services, part 2

These posts outline the sales process my team and I use to make good sales on a regular basis. After you’ve got that down, come back to this post and learn how to refine even more ;-)

I’d also reach out to some of the people who said “no” and ask them for earnest, honest, and frank reasons that they decided not to hire you. I’d send an email like this:

Hi Frank!

Not sure if you remember, but a little while ago you reached out to me for a logo design, but you and your team decided to go with another designer instead.

I’m trying to improve my services, so I was wondering if you could give me some feedback as to why you went another direction.

No pressure of course, but I’d sincerely appreciate your response!

Thanks so much,

So if you’re still with me…

Then you’re a whiz at sales and most of your proposals get accepted.

Now we can dive into converting your “no”s into “yes”s.

But first, before negotiating with anyone, I always ask myself this question:

Do I really want to work with this person?

If not, then I don’t try to get their business just for the money. I let the opportunity go. But if there’s something about this person that really draws me to them, and I feel their project is something I’m really looking forward to, here are the steps I take to try to win them over:

1. Extended Payment Plans.

Every project has a payment plan anyway. Usually it’s 50% up front, 50% when it’s done. But sometimes people don’t have the cashflow to cover that initial 50%, so they say “no”.

However, in reality, they could easily afford our services if they could pay them off over time.

So the first thing we offer is an extended payment plan. We typically say something like this either on the phone or via email:

(In response to: Sorry, it is out of our budget!)

Hey Jack,

No problem! I appreciate your honesty.

With that said, we really clicked with you guys, and we’d love to find a way we can work together.

Would it help if you simply broke the payments up more? In the past we’ve offered payment plans that broke things up into as many as 6 payments. This helps companies who can afford our services, but cash flow is a bit tight at the moment.

Let me know if you’d like to work something like this out. Like I said, we really like you guys and were really excited about working together.

If you still can’t – no problem. We certainly understand. But we wouldn’t feel right if we didn’t at least try :-)

Sincerely,

Most of the time this does the trick.

And not only that, they’re super grateful too. But you have to notice a few things in this approach:

    1. We give them space to still say “no”. This makes us look completely non-desperate. We’re not saying, “Please work with us! Please! You have to!” We’re very calm, more like, “Hey, we’d love to work together, but no problem if it doesn’t work out.”
    2. We’re honest about how we feel. We don’t offer this to people we don’t want to work with, so when we say that we really want to work together – it’s genuine. And people respond to that.
    3. We let them save face. “This helps companies who can afford our services, but…” That sentence is basically saying. “I don’t think you’re broke or don’t know how to run a company. I know how it is. Sometimes cash flow is tight and your funds are tied up in other things. We’d like to help you out with that.”
    4. We’re offering them a helping hand, but we’re not doing it in a way that makes them feel pitied or anything like that. It’s kind of embarrassing to admit you can’t afford something, so we’re removing that embarrassment and leveling the playing field.

2. Still no dice? Consider coming down on price.

Some people think the act of coming down on price in itself looks desperate. I don’t think that’s true. Like anything, I don’t think it’s what you do – but how you do it.

If payment plans still won’t work because the price is still too high – then it’s time to once again ask yourself:

How badly do I want to work with this person?

If something about them or the opportunity just wont let you go, then you have to decide the bottom price you’d be willing to do the work for.

Once, after offering a payment plan, we got an email that said this (paraphrased):

I’m trying to decide between you and another company. The truth is I feel a much stronger connection with you guys, but they quoted me a price that is in my range of $XXXX. 

Something about this client really called out to us, and the price they asked for was still very reasonable, so we replied:

Thanks for sharing that. We totally understand, and we feel that connection right back. 

Because of that, we’ve decided to do the project for $XXXX :-). If this is still okay with you, let us know and we’ll get things going right away.

Really excited about this,

It ended up being about a 15% discount, which we decided was alright in this case.

However, you have to be careful. Some clients are just trying to see if you’ll come down on price. We’d had enough interactions with this one to know she was being honest – but in other cases clients have pulled the…

“Can you do it for $X?”

And we quickly replied, “Nope.”

When you offer a lower price with a good “reason why” – you don’t look cheap or desperate. 

You look human.

For us, that “reason why” has always been, “Hey, we really like you. Let’s do business.”

Did you get something out of this post?

Or do you have your own thoughts to share on the subject? I’d love to hear them. Leave a comment and let’s discuss.

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About David Tendrich

David Tendrich is the co-head of creative agency Unexpected Ways, as well as the co-founder of Reliable: the first-ever PSD to HTML & PSD to Wordpress service run by designers, for designers. He co-runs his companies from Portland, Oregon with his lovely wife and biz partner, Lou Levit.

 

logoMore about David’s business: David is co-founder of Reliable – what happened when a group of designers got fed up with PSD to Code companies… and created their own. Check them out, and see what makes them so unique.

Comments

  1. Excellent advice as always, thank you so so much! As a new freelance designer, this is so very helpful!

  2. Another way to bring down the price (if that’s it) is to scale down the work. (This only works if they aren’t responding with “so-and-so will do it for $X.)

    For example, with a website: If their budget is $1500, but they want $2500 worth of work, first do the basics and leave the door open for adding the flourishes later. This also works with a marketing package where they want a few pieces that aren’t strictly necessary.

    Sometimes they just want to feel you out. Other times they need to make a few sales before they feel comfortable allotting the additional cash toward marketing. Finally, sometimes they just want to see if their marketing is worth it before they pour a large sum of cash into it.

    A twist on this can also be that if they sign on to an entire package (identity + web for example), you offer a package discount rather than doing the identity now and hoping for the website later. Don’t forget to ensure in your contract that if they bail halfway through, they’re on the hook for the full-price finished work.

  3. I’m not so sure offering extended payment plans is such a good idea…at least not for clients who don’t already have an established company. New businesses fail all the time, meaning the designer who didn’t get a hefty retainer (50% down) gets left holding the bag when the client decides their new business venture is a bust and funds have dried up. Lets face it, no matter how much we’d like to think otherwise, there are a lot of dishonest folks out there who don’t care if you haven’t been paid for your hard work.

    Unless you are very good at reading people, I’d protect yourself from getting burned. I use to be much more lenient in this way of thinking, yet you know the saying “fool me once, shame on them….foot me twice, shame on me”. It wasn’t because I wasn’t offering a quality service, it was because people steal your design ideas and then hire someone for $8/hr out of indonesia to run with YOUR idea. Or of course, their hair brain idea for a new business goes down the drain and they decide that website you just spent 30 hours on is no longer needed. Once again, without a decent amount of money down, you get left holding the bag.

    I swear, every time I’ve tried deviating from the 50% down on project, I get burned. When someone doesn’t have much money invested into a project, they are much more unlikely to abandon it.

    I guess your method works as long as you only complete the project according to how much has been paid. For example, if the client has only paid 1/8th…you only complete 1/8th of the project. Seems like a tedious and drawn out process to me.

    • Hey Trent,

      That sounds pretty sucky man. Sorry that happened to you.

      With that said, I don’t think the issue here is payment plans.

      I’ve never encountered anything close to this in my business. Certainly never had anyone try to stop payments and steal my work to get finished off by an $8/hour foreigner.

      Sounds like the issue here is who your advertising is bringing in. Sounds like they’re out to get you in the first place. I don’t think good clients suddenly switch into greedy “out to get you” types just because the payment terms change.

      The key is to get good clients in the door who want to pay you for good work. That plus a good contract and a good sales process usually does the trick.

      I’d take a good hard look at your marketing and see why you might be attracting people with this kind of mindset. But again, I don’t think the issue is payment plans. I couldn’t count how many projects we’ve successfully completed that were on payment plans and never had a problem collecting a penny.

      Also, I’d never do anything like “You paid 1/8, so we complete 1/8 of the project.” That sounds pretty crazy lol.

      Thanks for sharing your thoughts,
      David

      • David,

        I’ve had the same experience for you – payment plans, for me, have worked out really well. And you’re spot on – a good client isn’t looking to screw you and won’t suddenly decide to if they get more time to pay.

        In my experience (sadly), if a client is going to drop the project, they’re going to do it and leave you hanging regardless of what the payment plan is. No matter if you get 50% down or 25% down, if they don’t have the money, they don’t have the money.

        One thing my chiropractor does that might be helpful here is offer a 2 payment plan for 5% off and a 4 payment plan at full price to help nudge people toward paying more up front.

        I think the point is, there are lots of ways to work with good clients to make happy endings. Just gotta make sure they’re the people you want to work with! :)

        April

  4. Great post at a perfect time. We’re starting to experiment with payment plans.

  5. I personally after many years of experience feel that if the prospect does not have the budget or money, then it is better letting them go. Prospects with limited budget are one timers and will not come back.

    • Hey Sean,

      Have to disagree with you there, my friend. Clients who we’ve offered payment plans to have come back to us time and time again – and for high-ticket projects, too. And they’ve referred others who have requested high-ticket projects with payment plans, and they too came back to us for all sorts of projects.

      I think there’s a difference between a client with a tight budget who wants to take advantage of you, and a client with a tight budget who appreciates the value of good work and doesn’t mind paying for it.

      Just my 2 cents :-)

      Thanks for sharing your thoughts,
      David

  6. Priscilla says:

    Great article! However I do have one concern, and Trent covers it as well: you could get burned doing payment plans if something happens to them (personal or professional) and they put the project on hold or kill it altogether. Too many times I hear sob stories of clients with a death in the family, and they cannot move forward on working with you on a project.

    What you could do though is either of 2 things:
    1) Give them just the basics until they can afford the fancier features, like April Greer said, or
    2) Break it down into smaller portions (ie. only 3 or 4 parts vs. 8 like what Trent said (yes, 8 would be too time-consuming and painstaking).

    All that said, it’s good to know that there are designers (ie. David Tendrich) who have good experiences.

    • Priscilla,

      I’ve done 3 or 4 payment plans where we specify stages or phases of work. After Phase 1 is completed, another payment is due. Usually I make Phase 1 a bit bigger than the rest because they’ve already paid a deposit. This also helps keep the project on a timeline as well!

      Great stuff – thanks for sharing!

      April

    • Hey Priscilla,

      In the past 5 years I haven’t experienced any of these emergencies or sob stories. I’m sure some day I might, but from all of the great clients I’ve gotten from offering extended payment plans, they’ll pay for that one many times over.

      Of course emergencies happen and that’s uncontrollable – but I’d rather take a chance and get a new client I wouldn’t have otherwise gotten than let them go because I’m concerned an emergency might stop them from fully paying for the project.

      I think it boils down to how you position yourself in your marketing, in email, on the phone, in your proposal, and in your agreement. Every phase sends a powerful message. If that message shows you’re the real deal, and you’re a serious business, and you deliver on your claims – people are happy to pay you.

      If these “emergencies” and “sob stories” pop up on a regular basis… Well, then I think you’ve got a whole ‘nother problem ;-)

      Thanks for your thoughts :-)
      David

  7. Richard says:

    Really interesting article. I’d not thought of offering payment plans before, though I can’t imagine offering this option to a larger client, who may take it as a minor insult, but possibly for smaller clients with a tight budget.

    But I think David is very lucky not to have chanced upon a client trying their luck. I’ve been self employed for 4 years and in an agency for 9 and there’s always someone willing to try and get something for nothing, it is true in any walk of life. It doesn’t have to be down to a poor marketing or sales strategy either – these rare instances can occur even though the potential client may have great references, be recommended through word-of-mouth or be closely connected to a really good existing client.

    April’s suggestion to offer the payment plan as a series of phases seems the most sensible, continuing with the next step of the design process once the previous one has been settled. Otherwise, sooner or later, you’ll get your fingers burned by someone less scrupulous than yourself.

  8. Hey David, yes it is so important to focus on the value you are providing to your clients. I am learning how to better position my services this year as I’ve raised my rates to cover my increasing business and life expenses.

    I like the part you wrote about possibly accepting a lower offer while still saving face. Sometime they are just a really great client, but don’t have the funds. Figuring out a good way to come down in price without looking desperate is a skill I am still learning :)

    Thanks again,
    – Caleb Mellas

  9. Sorry to say, but I have to agree with Trent 100%. Every single time I have offered an extended payment plan, even if it was three payments instead of two, I got burned in the end. Not once has it worked out for me. If the client can’t afford 50% up front and 50% on delivery, I don’t work with them.

    Instead, I offer to reduce the scope to meet their budget as April said. If that ends up cutting out too much, I recommend that we revisit the project at a later date when they can afford it. For example, if they are cash-strapped right now but will be in a better position in September, I offer to honor that original estimate at that time. That way, if they actually DO have the money when September rolls around, I get the gig. But if they don’t, then I don’t waste my time doing the work and never getting paid.

    Richard is right that your marketing is not always to blame when you end up with these problems, or that you are “attracting” the wrong types of clients. For example, I offered a client the option to split a project into 3 phases because, as much as my gut screamed “NO! DON’T!” I felt it was worth it to get the project. Things were fine in the beginning, he was happy with the work and paid on time for the first two phases. Then when the site was built and ready to launch, he just decided he wasn’t going to pay the final balance. After 3 months of ignoring my emails, voicemails and invoices, he literally told me on the phone, “I just decided I shouldn’t have to pay.”

    The harsh reality is, most of the time, if they don’t have the money now, they won’t have it later. It’s just not worth the risk. And FYI—yes I have a crystal-clear contract that gets signed for each project. But not everyone cares to follow the contract. And if they end up owing you less than what it will cost to sue them, you end up eating it. I actually have a colleague who owns a mid-size marketing firm with top-notch clients, and she still encounters the same problems. People don’t always show red flags of dishonesty in the beginning, and no level of marketing will weed them out 100% of the time.

    I don’t mean to be a Negative Nelly, but I can only speak from my own experiences :) For those of you who have been successful with this approach, may the heavens continue to smile upon you! :)

    • Hey Robyn,

      I’m not saying a bad client won’t slip through your defenses now and again and rip you off. We have a very careful screening process that’s caught these bad apples before they got too far – but I’m sure some day some could still slip through.

      What I’m saying is the numbers still add up in favor of offering payment plans (assuming you’re at least pretty good at screening bad apples and they’re the MINORITY of your business).

      Here’s what I mean:

      Let’s say I get 5 extra gigs this month because payment plans made it feasible for 5 prospects.

      Let’s say 1 of those gigs is a bad apple and doesn’t pay.

      I still got 4 gigs I wouldn’t have otherwise. Those 4 gigs easily pay for the 1 bad one.

      If you told me “do 1 free project per month and I’ll give you 4 that pay great and turn into great relationships” – I’d take that deal every day of the year.

      I think people focus too much on the 1 bad apple in this scenario, and they swear off tactics like this for life. But if you look at these occasional bad apples as advertising costs – then the numbers still work out amazingly and my ROI is off the charts.

      Our culture has been conditioned to pay off large purchases in segments. If payment plans by themselves were a bad idea, you wouldn’t have entire industries who rely almost exclusively on them.

      Best Buy and Apple and car dealers get people who default on payments all the time. But they continue to offer payment plans because the amount of money they make by letting people pay things off incrementally makes the defaults insignificant.

      Very few people have the cash on hand to purchase an iMac in one fell swoop. But if you break that iMac up into 10 payments- suddenly you open yourself up to being purchasable by more people than you could count.

      In fact, these companies expect a certain % to default on their payments. They just factor that into their costs of doing business – and the numbers still add up in their favor.

      Thanks for sharing your thoughts,
      David

  10. David,

    You have written a great article with awesome advice! I have often times ran into this issue with clients. Having read this piece, it definitely helped me find the perfect ways to respond when I am faced with such cases.
    Thanks again and I look forward to reading more of your helpful hints and advice!

    Alexis

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