“Sorry, that’s not what we’re used to paying”
“Our budget won’t stretch to that amount”
“Sorry, we typically pay $X per hour for this kind of work”
You’ve heard it all before – the client who won’t pay your fee. But before the fear of losing new business kicks in and you agree to slash your rate, take a deep breath and carefully consider your response and negotiation tactics.
Here are a few options for dealing with this kind of situation:
Be Ready to Explain Your Value (i.e. You Get What You Pay For)
It’s always worth having an elevator pitch on hand to justify your rate and explain the value you bring.
You don’t need to be particularly slick about it either. Just roll off the top three or four things that you do well and that differentiate you from everyone else. For example:
“I don’t just deliver on-time, I always deliver ahead of schedule. My work rarely requires re-working – saving you time and money. And, my experience in this field is unmatched.”
Throw in a few examples or client references (in a comparable industry) to back up your statement. Don’t just name drop, but show how you actually helped those clients do X, Y, or Z.
If you can prove the meat behind your rate, clients often loosen up the purse strings because they can start to see how you can help them. Remember, your client is taking a risk too. Help ease their concern by showing that you are experienced, reputable and a good value!
If you still can’t convince them that you’re worth it, they’ll likely never value you and the negotiation needs to end.
Work Within Their Budget
If the client still won’t pay your rate, tell them what you can do within their budget or offer them a cheaper option. For example,
“The rate I quoted includes X, Y, and Z but I can do Z and Y at a lower rate, and you could take care of Z yourself or I can complete it when more budget becomes available.”
This gives you a chance to prove your value. If they find more money down the line or need help with smaller projects, then they’ll hopefully use you again.
Try to Negotiate a Commitment
Another option is to negotiate a commitment on future projects in exchange for a lower rate.
But be careful here. We’ve all come across clients who promise more work in exchange for a lower rate only to find that work never materializes. Dig deep and ask what type of projects they can send your way. Is budget approved? What is the scope of the projects? These types of questions will help you gauge whether there is something there or not.
Likewise, what does your gut tell you about the client? Have you been trying to secure them for a while? If you already have a prospecting relationship with them and sense good vibes, agreeing to a lower rate might make sense – if they can commit to sending more work your way.
To nail that commitment, try to get them to agree to a contract that states that future projects, even if they are only loosely defined, are included in the agreement.
Know When It’s Time to Say “No Way!”
Turning down work is a fact of life, no one wants to be stuck with a client who doesn’t perceive your true value or puts you in a position where you feel taken advantage of.
Here are a few examples of when it might be time to stop negotiating and walk away:
- When the Rate is Way Off – If your average hourly rate is $80 but the client will only pay $50, you might be better off pursuing clients who can pay you what you’re worth. Here’s a good rule of thumb – if the client offers one-third of what you usually charge, walk away.
- The Promise of More Work – This is probably the most common tactic used by clients and plays right into a small business owner’s Achilles heel. Be cautious about going there; invariably the promise of more work is just a ruse. If you do go there, refer to my previous point above about securing that promise of more work in contract form.
- “You’ll Get Great Exposure” – Another tactic that rarely bears fruit.
- Attitude – If a prospective client rejects your rate and does so with attitude, spare yourself future hassles and walk away from a relationship that already feels wrong.
We’ve all come across these scenarios, and while you don’t want to turn down a client at the first hurdle, heed the warning signs and play it carefully before agreeing to lower your rate. If you do decide to walk, send them a courtesy email thanking them for their consideration and let them know that you’re probably not the right person for the job.
The Bottom Line
Remember, any rejection of your fee is a negotiation. Be professional and try to find out what the real issue at play is, and offer creative solutions that make sense for both of you. If it really does come down to price, then accept that you’re just not the right fit, and remember – it’s not personal.
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