Growing up in an Asian ethnic enclave, I know all about discounts. At times, it’s part of the culture. Even when I was visiting China, a buyer could automatically presume that the proposed price given at markets is 10x its real worth.
No joke.
Personally, I hate dealing with people who ask for discounts. It’s insulting, but it happens. Additionally, if you want the job badly enough, you might play ball in fear of losing the gig because of a small difference.
How can we deal with discounters? What are the repercussions of offering discounts?
Below are two true stories and one comedy clip with simple techniques on handling these situations.
The Ultimate Discount
I was invited in 2010 by WPPI to speak at a business panel for photographers. While there, a young woman just starting out posed an interesting question.
“I’m new. I didn’t have a portfolio, so I asked 30 of my mommy friends to see if I could borrow their kids to use as sample work,” Sarah told me.
“So what’s the problem?” I asked.
Sarah’s voice started to escalate, “The problem was when I finished the shoot, many of them started demanding that I edit this, edit that, print this, and print that. They treated me like I was chopped liver!”
“I did it for free!” she continued, “What more do they want? What’s worse is that I didn’t get the portfolio I wanted.”
“That is troubling,” I tried to console her. “The issue here is the lack of barriers to entry. When you are too easily attainable or, better yet, too desperate, people will step all over you.”
“But I had no portfolio! And I still DON’T! How can I not be desperate?” Sarah asked almost furiously.
“I understand. It’s actually a matter of words and presentation. Let me propose a different technique.” I thought for a moment.
“What do you think about this way?” I started. “Hello mommy friends! How are you? I’m trying to build my portfolio as a children’s photographer. I don’t have any sample work yet.”
“Uh huh,” Sarah looked flummoxed.
I continued, “So, I am reaching out to the 30 of you first since you are all my friends. If you want a complimentary children’s photo session by me, this is what you will have to do – send me a photo of your kid along with a short summary as to why I should pick him / her. From the submissions, I will choose 5 lucky kids to work with. Thanks for your time! Signed…you, Sarah.”
You should have been there. Her jaw dropped! What did I just do? I had turned the tables. I (being Sarah) no longer needed them; they needed me.
I did it by creating not one, not two, but four barriers to conquer desperation.
- I am reaching out to you moms first, which means that I have other willing participants (and there will be since it’s free)
- Must submit photo (to make sure that they’re cute)
- Must submit summary as to why I should pick him/ her
- Of the submissions, I will pick 5 lucky kids for a complimentary session
I put the ball in her court with just these words. You can imagine Sarah [and everyone else] writing copiously into their notebooks.
It’s all a matter of presentation. The end result would be the same – Sarah would still get her portfolio and the moms would still get their photo sessions, but the respect for Sarah’s time has changed.
“The King of Queens” – Sight Gag (Season 04 Episode 02)
“The King of Queens” is a comedy television series with two protagonists Doug (husband) and Carrie (wife).
For Carrie’s birthday, Doug buys her laser eye surgery treatment. The next day, Carrie wakes up with blurry vision. The following day, there were no improvements.
Doug called the doctor to see if this was normal. We later learn that it was not. He got a discounted service from “Vision Village.”
“It seemed fine,” Doug tried to justify to Carrie. “I mean, the brochure was beautiful and I got the coupon in the mail.”
“A COUPON?” yelled Carrie. “I cannot believe that you used a coupon for my surgery! I can’t imagine a place that even uses coupons…How much did you save?” she fumed.
“…half off the second eye,” Doug answered guiltily. And she tries to punch Doug even though she couldn’t see.
Premium Service
Even if the eye surgery was successful, Carrie would question what problems might arise later in the years.
If you are offering a premium service (like photography), discounting may and can lead to second thoughts. Would you pay 50% off for eye surgery?
I Created a Skeptic
I charge a premium rate for my wedding photography services. An old acquaintance from high school asked for a special rate.
“Come on! I’ve known you for 11 years! If you ever needed anything that I could do, I’d be at your service!” he told me.
Although I hesitated, I obliged.
“Thanks man, I owe you one! Let me review this with my fiancé.”
One month later.
“Okay, Lawrence. Everything looks good. Can I ask you for a favor?”
“What’s that?” I questioned warily.
“My fiancé found you to be very gracious to offer such a steep discount. She’s just afraid that you won’t perform at par since it’s not your normal rate. Can you reassure her by telling her that you will treat us like any other client?”
“Yeah, sure. (bride-to-be) – like what (husband-to-be) said, ‘I will perform at par and treat you like any other client despite our special deal,’” I regurgitated robotically.
The fiancé smiled.
I was fortunate enough to have an old friend who was candid enough with his thoughts to tell me this. The moment you discount for a premium service, just like Carrie Heffernan’s eye surgery or my friend’s discounted rate for wedding photography, people will question what they’re being cheated out on.
Like This?
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- Comment how you handle people who ask for discounts
Other Chapters
- Preface: What are You Worth?
- Chapter 1: Psychology of Choosing
- Chapter 2: Choosing is Painful
- Chapter 4: Secrets on How to Handle Discounters
- Chapter 5: How to be Fearless in Pricing
- Chapter 14: 2 Steps for Naming Your Packages
Yours truly,
Lawrence Chan
P.S. For Halloween, I disabled the doorbell and hoarded all of the candy for myself.
Click HERE.
Related posts:
When I get asked about discounts, I simply explain that I don’t discount to keep prices fair and consistent for all my clients. They usually understand this and it helps keep the clients from walking all over you… which they WILL do if you discount. I also ensure them that if they book now they will lock me in at the lower rate. I explain that I usually raise my rates several times a year and that my available dates are very limited. Just remember give an inch and they take a mile.
Great article. However wouldn’t Sarah have had to increase the number of people she was appealing to; wouldn’t every barrier to entry minimize the amount of people applying?
Sunny,
I think that although it may increase the number she would have to appeal to, it would also increase the amount of people applying for such an exclusive offer.
Actually, the more barriers, the more people would want it.
Lawrence this is such great psychology. This plays into our clients perception of our value and legitimacy. I must get approached several times a month by potential clients on discounts or “what’s the best deal can give me?” To be honest, I have given in at times and sometimes it has gone well where my client is appreciative of the deal I am giving then, but for the most part, these clients become the most picky and critical B/G’s.
I learned my lesson, so for family and friends, I won’t charge, so there is no expectation of service and I easily go above and beyond their expectations. And I have walked away from more deals that I have wanted to in order to keep my high expectations and level of service in tact.
I not only see discounting as a bad business practice, but I only have 52 weekends a year, so if I go cheap on them, not only am loosing on $$, but I am also cheapening the value I have to be away from my wife and kids. I would rather walk away from a deal and spend that time playing with my kids, than accept it and eat that double edged sword. It’s not just about money, its also about work/life balance and the quality of the life you want to lead.
Thanks for letting me comment and thanks again for your great insight!
Andres
well articulated point. I love it. Am printing it to remind me of my priorities – and exactly why it’s not worth it to work for minimum wage for PITA cheap clients.
My point of few too Andres…
I will rather be in comfortable of my home and enjoy my time than lower my standard rate. Because such clients will often give their own friends or family the discounted price you offered.
Great advice Lawrence. You will actually be more respected in the end when you do stand your ground. Even with the down economy I held fast on my pricing and hit my goal and then some. I would use Bambi’s phrase, “I wish I could.” Goes to show that people want discounts but they also want value for price.
You are more helpful than you could ever realize! And your topics are always right on time for my questions! I do have one more question though, where is Chapter 3??? :)
I skipped it. Next week will be Chapter 7!! I’m keepin’ it fresh.
Lawrence what do you feel about offering value added incentives if things are slow?
I approve! Just depends on presentation (like Sarah). Present it so that it does not jeopardize your value all while offering an incentive to have people act.
I had moved back to NJ from Los Angeles back in October 2008 due to medical issues. I had to rebuild my business to a new focus and learn to work around my medical issue(I have MS and FMS) and I also have a now 4 year old daughter(but my husband, my daughter and I live in my childhood home and we do get help from family).
What I did earlier this year after getting settled finally was hold a “contest”. I sent out a blog post, FB post and Twitter to friends and family to email me the best and most recent photo of their baby, or children.
I gave them a deadline and then had a poll on my blog and posted it to my FB, email and Twitter to have everyone vote who they thought was the cutest.
The winner then received a free photo session with 1 8×10, 2 5×7′s and 8 wallets.
http://www.deirdreryan.com/blog/?p=488
Here’s the voting:
http://www.deirdreryan.com/blog/?p=491
The winners:
http://www.deirdreryan.com/blog/?p=494
Session Results:
http://www.deirdreryan.com/blog/?p=516
I did just 2 of these contests and I got enough to build a new portfolio with. I don’t do these anymore, but it was a good way to start :)
I looked over the contest and it’s a wonderful setup you got going! Good job, Deirdre!
Thanks!
What a great idea Deirdre!
I don’t offer discounts, but an ‘up and coming’ photographer (his words) in my area offered his $380 on-location portrait package with 15 high res retouched files for $35 on Groupon last week. I was stunned for so many reasons, and I’m sure this person is really regretting the whole thing.
Um yikes!!! He totally didn’t make anything off of that one! I don’t see how photogs can do that to themselves!
Hi Lawrence,
First off – what happened to Chapter 3?! Did I miss it?
I really, really get frustrated when people ask for a discount. I think, like most wedding photographers probably do…that for the type of business we do, ideally our clients are people who have sought us out specifically and want ME and not just the photographer with the best price tag. Unfortunately, this is not always the case. I’ve come to realize that the brides who shop around and ask for discounts are usually also more demanding throughout the process…more difficult before, on wedding day and post-wedding. SO I just decided to say no to all discount-askers…in reality there will probably be another inquiry for their date and chances are it will be someone more exited to work with me and willing to pay the extra $$ it might take.
Thanks for this series…it is very thought provoking, and that can only translate into growth in our businesses! Much appreciated.
Erica
This is such great timing. I am in the portfolio building stage and only able to devote myself part-time to it at the moment, while my daughter is little. I went back and forth trying to decide to price where I would like to end up and discount or slowly increase as I built my portfolio. I just recently decided on the latter, because I didn’t want this to happen and have clients not appreciate my work. I use to be a real estate agent and would get asked for a discount in my fees all the time, then the minute I gave an inch they would completely take advantage, so I’m a little bit touchy about someone asking for a discount in my services.
So far I give my immediate family family pics for free to alleviate any problems with asking for discounting. I would rather just give them a good service for free and not deal with hurt feelings if I didn’t discount or have them value my services. They actually seem to value it more this way.
I also did my first senior session for free, but will charge from here on out. Thankfully I photographed a senior that really appreciated it and I received a ton of thanks from her mom for all my work.
I will definitely take your advice Lawrence regarding keeping the control over any future freebies or any discounting I may think of doing to finalize my portfolio. :) I love the thought of offering it to a select group and having them come to you with a good set of parameters in place.
This pricing series is so helpful…and all the great responses! Thank you!
So true – made the same mistake in my web design business. Once you do something for “free” – it is very difficult to charge them for services at a later stage. With the photography business, we started with premium pricing and achieved premium status in a very short time!
Great tips Lawrence! I recently had a similar experience where a asian friend asked me to photograph her wedding (for a discount) but after presenting her the contract, she’s asking for free upgrades and it’s at the point which I can’t break even on this one. Do I risk alienating her by not shooting her wedding (the contract hasn’t been signed yet) or bite the bullet and do it at a loss?
this is great, keep it coming!! I have found that anytime I offer something at a special rate for anyone, they end up being a PITA… so I’ve got to remind myself to stay strong and don’t discount myself.
I LOVE your suggestion for barriers of entry for portfolio work, I am going to start using this with my portfolio building work! Thank you thank you thank you!
But I have to wonder, what happened to chapter 3? ? Did I miss something ?????
[...] Chapter 4: Secrets on How to Handle Discounters [...]
It’s these blog posts that make me even more excited to hear you speak at WPPI in February!
I love this. Such a great post. Thank you for sharing.
[...] Chapter 4: Secrets on How to Handle Discounters [...]
Great advice, as always! :)
[...] Chapter 4: Secrets on How to Handle Discounters [...]
I love this post that I had to copy and past the whole article and post it on my blog with all of your credit on it. I hope you don’t mind. I get a lot of these clients and sometimes I get so overwhelmed with them wanting more and more. Thank you for sharing!!!
You’re welcome! I do not mind at all. Rather, I’m flattered!
[...] Chapter 4: Secrets on How to Handle Discounters [...]
[...] to have clients focus on your work and not on how to discount (more than what I’ve already shared [...]
Hi Lawrence, THANK YOU for this article! It should be bookmarked!
I am in the early stages of photography business and even though I did a few weddings and lots of family session I have never shot a bar/bat mitzvah. So when I had a new client who approached me about shooting her daughter’s bat mitzvah, I gave her a discount in $$/per hour shooting and a free photo book from the event. All was fine and dandy, they loved the photos, I had 2 families come to me at the event saying they will book me for their childrens’ birthdays, I was so excited! Then one of the families call me up and we chated to discuss the details. I tell them my regular pricing and….never hear from them again. They wanted the same deal and I simply couldn’t do it for all of them.
How would you deal with that? I totally messed it up, didn’t I?:((
[...] Chapter 4: Secrets on How to Handle Discounters [...]
[...] the premium business deals. Additionally, being selective of whom to work with lends you a natural barrier to entry, thus increasing value. Conversely, you’ll take any deal that presents itself…and maybe [...]
I love this post that I had to copy and past the whole article and post it on my blog with all of your credit on it. I hope you don’t mind. I get a lot of these clients and sometimes I get so overwhelmed with them wanting more and more. Thank you for sharing!!!
[...] So, we understand the powerful strategy of scarcity, how can we apply it? In fact, scarcity is just another form of barriers to entry. [...]
[...] Chapter 4: Secrets on How to Handle Discounters [...]
[...] In fact, you could be free and still be a luxury: Secrets on How to Handle Discounters. [...]
[...] in as well. Under promise and over deliver. Let her know that everyone’s time is valuable (barriers), but you understood the importance of such a [...]