Article courtesy the Freelance Design Marketing Association.
One of the biggest mistakes I see freelance graphic designers and Web designers make is trying to compete on price.
If you think you’ll get more clients and earn more income by charging less than your competition, think again. Competing on price is a big mistake, and it’s one you can’t afford to make if you want your freelance design business to be successful long term.
I know, I know, competing on price can seem like the right thing to do; after all, many clients shop this way. But in reality, price competition can do more harm than good to your reputation and the types of clients you attract.
It really can be a vicious cycle that is impossible to get out of and seemingly more impossible to break as a business practice.
Here are three big reasons you should never compete on price:
1. You undermine your credibility by charging less.
Stop for a moment and think about the message you send your prospects by charging less than you’re worth. In your mind, you think clients are saying, “Oh, great! Now I can finally afford this service!”
But in reality, prospects are thinking, “Why is this designer charging less than everyone else? They must lack experience, or maybe they’re just not very good at what they do.”
Prospective clients expect those who are good at what they do to charge more than the competition, and they’ll gladly pay a higher price to get the service they desire. After all, your prospective clients believe in “you get what you pay for,” just like most people do.
If you needed plastic surgery, would you want to hire the bargain-basement discount doctor, or an expert who charged what his or her expertise was worth? What would the cheap doctor do for your face and image? What does the bargain-basement designer do for their client’s image?
Just something for you to ponder.
2. You attract those who know the price of everything and the value of nothing.
When you compete on price, you attract clients who value price more than anything — including the value of your work and how it can benefit their sales, marketing, and position in their industry.
It doesn’t matter whether you provide the very best services money can buy or you do a just a so-so job, you’ll never have a long-term relationship with these clients, unless you’re willing to compete on price forever… because price is all they really care about.
As soon as someone cheaper comes along and you’re not willing to drop your prices, those clients will be gone.
3. Most people who are cheap and looking for the cheapest price can be “royal pains” to work with.
Internet marketing coach Yanik Silver once told a story about the Mercedes dealership in his hometown. He said the customers with the lowest-priced, entry-level Mercedes complain the most and cause the most problems for the staff. But those who purchased the highest-priced models of Mercedes are the best clients to serve and work with.
The same is true for your freelance design business. Cheap clients almost always complain more, take up more of your time, and are rarely satisfied. That’s because they’re always looking to get more for their money — which usually means more work for you, more headaches for you, more fires to put out, etc.
Of course, all of this comes without more pay.
No matter how great of a freelance designer you are, you’ll never be as successful as you could, if you compete on price.
When you don’t charge what you’re worth, you undermine your credibility and are sure to attract the wrong kind of clients. However, when you refuse to compete on price and add a lot of value to your services, you make your work more enjoyable and profitable, which will make your clients happy to pay you what you’re worth!
Copyright © 2009-2010 by Jeanna Pool. Jeanna is the Founder & President of the Freelance Design Marketing Association. The FIRST and ONLY association of its kind, anywhere in the world dedicated to teaching freelance graphic designers and web designers how to market their services successfully, attract clients consistently and build the business and income of their dreams. Visit the Freelance Design Marketing Association Web site to test drive the association risk-free for 30-days.