Should I Cut My Rates?

By Author: rory brown
Total Articles: 3
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Marketing Strategies are sometimes implemented without thought when a service professional finds himself in need of money, because one of the reasons he has his own small business is that he can make quick decisions and implement them. If he's lucky, he can get fast results. At least, that his reasoning.

Over the past five years, this marketing strategy has probably worked, because there were a lot of potential clients out there. Now he finds himself hoping that the phone will ring and he wants to convince them, with his lower price, to give him business. There's a good chance that your competitors have also thought of the same thing, if they are small and able to use the same marketing plan.

So, now you want to let everyone know that you've cut your prices. You change your website to reflect lower prices. You may even do a mail out showing a lower rate. You don't want to tell them that you've lowered the price, because that might mean that you aren't making enough money. So now they think this is your price.You may as well stand on the sidewalk next to the homeless guy, with a sign that reads "Will work without ...
... regard for earning money" - and he'll probably make more than you do.

Can you take a rate cut if you want to? Certainly. You just need to do it the right way. So how do you use this marketing strategy? Carefully, methodically, and discreetly. It's alright to run special promotions - for limited times and for the "right" reasons. It's okay to run a holiday special, as long as you don't keep running it for longer than you stated you would. I've seen companies do this, and it always tells me that they are hoping to get more business because their "sale" didn't do well. You're better off to announce that it's for an entire month, or to start it earlier before the holiday.

The point is that this is your marketing strategy and you need to be in charge. Not the client. They shouldn't get rate cuts because they ask for them, unless your business strategy is to go in high, knowing that the potential client is going to ask you for a rate cut because that's what he does. Then you are still in control. For instance, when I was a broker I had a friend who was also a broker, and if she had a client that she knew would be difficult, it was better to tell him that her commission was 7% - and to justify why - then let him "convince" her to take less. You must use that strategy very carefully and make sure that he promises to not disclose to anyone that he got a lower price.

It isn't something that I ever liked to do, and so I didn't, but you have to understand that for some clients, it's a game and they need to win. In my current position, and forever more, that's just not a client I want to deal with, and I won't.

Ultimately you need to gauge your local economy and decide what's best for you. Just remember that your time is the one thing in your life that you can't replace.

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