Entrepreneur
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Discount or Value Add?

By Miles Burke

A colleague recently asked me for some advice. The projects she was working on were all finishing up, and with no new sales, there was obvious concern that she’d have no work in a matter of weeks. Her question to me was how much should she discount those proposals she had out there with prospects, in order to encourage new work.

My answer? Don’t!

The way I look at it is that by reducing your estimation on a project, without removing features or work involved, gives the prospect a few messages:

  • You intentionally over quoted to begin with
  • Your time is less valuable than first thought
  • You’re desperate for work

Even if you are desperate for work, the air of desperation is never good for prospects to see. A far more enticing method to create a sense of urgency and close some of those deals would be to ‘value add’. That is, offer to include something for either discounted rates, or free. Ideally, it isn’t something that costs you much, and certainly isn’t just your hours.

No matter what you offer, make sure it has a defined deadline, and not too far in advance: ideally, a week to 21 days – no longer than that.

Here are a few suggestions you could use as incentives.

Six or 12 months free hosting

Sure, there’s a cost to you in buying hosting, however if you have a great deal, it’s likely not to be too much. You could always make this half price hosting for a year, to cover at least your hard costs.

One year subscription to a business magazine

This is a great incentive – if your client is a business, of course. Business owners always enjoy reading about what’s happening in the business world, and a 12 month subscription means they will remember you every month for a whole year!

Buy them a great book

The book should ideally be on topic: perhaps if you are building them a new website you could buy them a book like SitePoint’s own Online Marketing Inside Out – a perfect read for new clients, or find a book about online business successes or the like. A book about how to build your own website isn’t going to be a smart move, though!

By doing the incentives this way, you’re creating a sense of urgency but you aren’t discounting your own rates. You could wrap this offer up in an email along the lines of “I’ve ended up with a few free subscriptions, so I’m offering one to each new client before the end of the month”. This also helps dispel any sense of desperation.

Good luck, and let me know how it goes!

  • swed

    Was expecting something else but I really did enjoy your post and I, of coz, agree with your advice.
    Might be back some other day to learn how it all turned out for your friend.
    cu

  • http://www.pricklypearmedia.com Angelo

    Completely agreed. Brilliant article, will try it out and see how things turn out. Love the title too.

  • Anne Dougherty

    Very good advice. In the non-profit world discounts are often offered to clients for bulk purchasing (e.g. 10 support hours at the full rate or 25 support hours for 10% off) or payment in advance. What’s your thought on discounts of that nature?

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