The ‘recession discount' and other fairytales

It's the Recession, and it's being used as an excuse, far and wide, for customers and clients to request bizarre (and often enormous) discounts for the same work you've been doing brilliantly all this time. This, ladies and gents, holds about as much water as an old garden bucket. So here's a look at how it unfolds and how to handle it...

1. How it unfolds

Helen's story

I was requested by my client, a PR company, to write four substantial pieces for a parastatal tourism concern. They offered R6000 for all four, at 1000 words each. My fee when I was contracted was R3 a word. I stuck to my guns, pointing out that this would mean a lousy R1.50 a word, and declined politely, saying that I would do only two of the pieces, at my usual R3 rate. Within a day, they agreed and a few days later, they wanted a third story, "at your R3 rate". The lesson: Stick to your guns. You're worth it, and they do have the money!

Sarah's story

I had a client who asked if I would give her a 'special rate' for a job she wanted done. She had just finished telling me about her cruise on the QE2 after a holiday in the UK and her new Merc, one of the first with a remote ignition. She hadn't really had a chance to drive it yet. Poor dear. I declined, and never worked for her again.

Tim's story

There's a huge nationwide concern I've done some work for. They'd loved it. So I was chuffed when a different person from the same company called for a quote on a similar job. I went in conservatively, because I wanted it. A few days later, I got a call from the contact, to tell me that my quote was higher than their budget and they'd like a discount. “What sort of discount?” I asked, thinking that as I'd worked for them before, I'd knock 5% off. “Forty percent,” she answered. In my shock, I asked her to repeat herself several times, spluttered an explanation about why this wasn't feasible for me and put down the phone feeling like I'd had my pockets picked.

Vanessa's story

Lately the call for a ‘regular customer' discount has been unreal. So I humour the client,"Yes, I understand. We're all struggling at the moment. I know you're a small business too. Yes, we have to stick together". But in my head I'm thinking, contacting me once every three months does not really qualify you as a regular customer. So I proceed to give him a slightly inflated price and with a "But for you...", I lower it back to the normal price. Problem solved.

In all three of the above instances, the client has a bit of a cheek. Your prices are your prices. You're providing the same service now that you were last year this time - except now, your overheads are higher and life's costing you more.

As you can see above, some companies don't put up with this nonsense. But there are a couple of ways to a) analyse whether or not being hardegat will work for you in the short-term and b) compromise if required, without losing face.

2. How to handle it

First things first: context.

Is the current economic climate killing you? Are you battling right now, and desperate to quote on, and get, every job that comes your way? If so, ‘giving in' to the client may work for you and get you the thumbs-up you're hoping for. But please, if you are going to comply, be sure to give the client a good reason** for the discount - not just the bleeding recession!

Alternatively, are you pretty busy? Perhaps not as busy as you were last year, but plodding along, getting most of the work you quote on, covering your costs and being able to breathe when you climb into bed at night?

If you are, consider the fact that recessions create vacuums and that smart businesses are those that step into the gaps left by scared businesses. If you can grit your teeth and uphold your prices, you'll benefit in the medium-term, because customers will learn to take your professionalism, standards and rules seriously.

Please also keep in mind that (and I've polled widely on this in my field and other industries) the target audience may be more cautious about spending - quibbling over costs, asking more questions, reading the fine print - but those clients who are serious about the product or service are still spending. It just takes a little longer.

In this regard, patience is truly a virtue, and while you're being patient ask yourself, “Is this a sincere client, or is he/she wasting my time?”

Tip: if you're not comfortable offering discounts, but you do want to give clients a little something extra as a ‘thank you' for spending their money with you, offer an extra set of free changes to a copywriting job, a spare set of prints with a photography job, an ‘anytime email follow-up service' with a consultation, another month tacked on to a contract...

** Secondly, give a reason

Call it an NGO discount, a ‘regular clients' discount or a volume discount. Call it anything you like, but don't undermine yourself by nodding your head gormlessly and hacking 10% off your quotation.

Say to the client, ‘No, I don't offer a recession discount. But as you're a ________, I can offer you my __________ discount. That's the best I can do for you, because I want to be able to put as much of my time/resources/effort [pick one] as I can into this job. I don't want you to lose out.' And put it in writing, on the quote, in bold letters, just above the pre-VAT sub-total.

Disclaimer

Now, I have to admit that I've used the recession myself in recent months - when negotiating overseas travel costs, getting quotes on vehicle graphics and complaining about shoddy treatment at a Parkhurst restaurant.

But, and this is a biggie, I haven't done so to guilt-trip suppliers into giving me better deals. No, I've used the R-word to unsubtly nudge people into giving me better service.

You'd think this self-evident, wouldn't you? Sinking economy, widespread retrenchment, massive panic; ergo, great service, big smiles, huge effort, nice work... Sorry for you. It seems that the opposite is, in fact, true.

Here's a tip: while the Big R is no reason to start slashing at your bottom line with a rusty machete, it is a reason to offer never-before-seen levels of service, delivery and reliability. Now more than ever, clients need motivation to unload their precious loot onto you. Yes, they're probably going to spend it anyway, but they'll do it quicker with the guy who goes a bit further.