Setting prices is a difficult task even in the best economy and in a recession, it can be even harder. While web design is best done by professional designers like yourself and your business, in a recession, small firms are more likely to decide that they can save money by designing and maintaining their site themselves. So in order to keep their business and attract more you need to make sure that you are doing what you can to save your clients money and show them that you care about their business.
Work With Your Clients
Remember that it’s much easier to keep a client than it is to get a new one. So you should stay aware of your clients and what their business needs are. By talking to them ahead of time to find out their current status, you can avoid late (or non-) payment and get them on your side. You want to show your clients that you understand that tough economic times calls for tough decisions.
But rather than offering your clients a discount as the first thing, you should consider other ways you can add value without increasing the price. If you charge by the hour, think about how you tally those hours up. Don’t assume that they can absorb the cost—could you if your business were in the same position? By being as scrupulous as you can with how you count your billable hours, you develop a reputation as an honest business person, and they will want to do more business with you.
For example, I finished a project a few weeks ago where I worked for several hours on a correction for the client. But I did not bill them for those hours. Why? Because ultimately I could not get IE7 to do what they wanted it to do in the time frame they needed it done. I could have billed them for the work, I certainly spent the time. But I didn’t feel right billing for work that ultimately could not be used.
If you are charging a flat rate for a project, you can still provide extras. Little things like optimizing the images they send you for the site, giving suggestions for SEO of the content, testing in more browsers than they asked for, and so on, they all add up. And again, clients will see that your flat-rate sites are more valuable than someone who only delivers HTML and CSS for that rate.
But there is more to working with your clients than just providing more value. You should also work directly with them about the prices and payment structures. Don’t hesitate to ask the client who is late with a payment if they need an extension, rather than heading straight for the collection agency. Creating a payment plan is more likely to get you paid, than just ignoring the situation. By talking to your clients, you might find that they have something you need and you can set up a barter arrangement. By working with your clients, you will keep them much happier and more likely to recommend you and stay with you.
Everyone appreciates a deal, and business owners are no exception. In a recession, new clients are more likely to notice lower prices. Don’t get me wrong, I still do not advocate working for free, but announcing a 10% discount for a limited time can help your business get some traction with customers who might have otherwise been reluctant to carry on.
Another way to discount is to offer lower prices if specific conditions are met. For example, you can offer discounts:
- for payment in advance
- for shorter- (or longer-) term projects
- if they want to use a technology that you know really well or one that you’d like to learn—but be up front about this if that’s why you’re giving a discount
- for your birthday or their birthday or a holiday or in fact anything you want
Just be sure to be clear about why you᾿re offering a discount, and that your clients understand that it’s a discount on your regular prices and not just your prices.
But be careful with discounting. By offering a discount that never ends or by offering a discount immediately after a rejection, you are essentially saying that your prices are already too high. Laura Lake, the About.com Marketing Guide, explains common pricing mistakes and what you can do to avoid them, and the worst mistakes you can make surround discounts.
What Costs Are You Passing On to Your Clients?
While you’re saving your clients money, you need to make sure that you aren’t destroying your business by offering too steep discounts. While you can choose to reduce the discounts, a better solution is to look at the costs for your business and work on reducing them. Then you can pass the savings on to your clients.
Look at all your expenses, not just the obvious ones. These are some of the more common expenses that most design firms pass on to their clients:
- web hosting—both for their site and your own.
You may not have looked at your hosting costs recently, but there are a lot of web hosting providers out there and many are very inxpensive.
- domain name hosting—both for their site and your own.
Just like web hosting, there are lots of domain registrars out there that offer very inexpensive plans.
Marketing your business is important, but are you spending more than you need to? Look at the ads you are taking out or the cost of printing business cards, you may not need to pay to get decent promotion of your business.
- other business expenses
Examine what you’re spending on things like organization memberships, magazines and books, software, hardware, and other expenses. Any money you can save in these areas you can pass on to your clients.
- even personal expenses
If things get really tight, you might consider taking a pay cut in the salary your business pays you. And of course, that means tightening your belt personally as well.
Don’t forget to ask for discounts where you can from your existing suppliers. Even if they aren’t announcing a discount, they may be willing to give you one in order to keep your business—sort of like you’re offering to your clients.
Remember that keeping existing clients, by saving them money through discounts is worth reducing your income in the short term. And if your discounts get you more clients, they will be more likely to stay with you when the economy gets better.