There are a lot of things to consider when it comes to pricing your services – but your financial desperation isn’t one of them.
Have you ever heard this? “I’m so broke, I’m going to have to lower my prices.”
When money is tight, there’s a strong temptation to drop your prices. The idea being that lower prices will appeal to more people, increasing your sales and putting some cash into your pocket.
This CAN work – on the short term.
For example: You need to raise money fast, maybe you desperately need a new computer. So you offer a huge discount on your services for a limited time. Hopefully this brings a fast influx of cash and you can run right out to buy that computer. IF you don’t mind doing a lot of work at a discounted price, this is totally fine.
There are potential problems involved that you should consider.
- Will your current clients want you to work for them for the discounted price? (Maybe.)
- Will those who take advantage of the discount flee when you go back to your regular prices? (Probably.)
- Will the discount make you look desperate? (Depends.)
The key to success with a short term discount is to present it carefully. If you’re just trying to raise cash to pay your bills – keep it to yourself. You can run a sale without having to have a reason. But if you do have a good reason for the special – go ahead and tell your story, it might influence buyers.
Offering discounts can be BAD news in the long run.
Offering specials too often can have a negative impact on your business. If you’re offering huge discounts every few weeks, the message you send is that you can’t get clients to pay your regular prices. It can make you look needy and that doesn’t inspire confidence in potential clients.
If having a sale is the only way to make sales, could your prices simply be too high? Do some research and see how your prices compare to your competitors.
If you’re financially desperate, offering a discount or lowering your prices is probably NOT the answer.
When you need more sales or more clients, its probably time to up your marketing efforts, not lower your prices.
Does your website do it’s job? Is it attractive, organized and easy to use? Have you removed all distractions? Test the entire sales process and make sure there are no problems.
If you have a great product but experience poor sales, consider hiring a copywriter to improve your sales copy.
Are you doing all that you can to promote yourself? (Most aren’t!) Put a referral or affiliate system in place so your fans can spread the word.
Next time you’re feeling a money squeeze, I hope you’ll look for ways to market yourself instead of underpricing yourself.