The prospect of landing exceptionally high-profile projects tends to mess with my head. My gut reaction says “cut rates, get the gig.” But history, and probably even common sense, says reducing rates rarely has the effect my gut would expect.
For a period of time, we were building websites for professional athletes. The group that handled the direct relationships [with the athletes] was convinced the exposure would do big things for ep.
It didn’t. So for three years we cracked on high profile sites in a market we weren’t otherwise pursuing. And when the leads didn’t materialize, we were left with a significant volume of discount work and support for high maintenance projects on tight timelines.
We got seduced into buying business, and it bit us.
Reducing rates is almost always the wrong approach. It does one of two things: reduce the expected quality of your results or reduce the perceived value of your time. So in the case of a response to an RFP, you’re either hurting your chances of getting selected in the first place, or you’re setting the relationship on tilt right out of the gates.
Did you notice I snuck the word “almost” in there? There are all kinds of exceptions to logic, and we have at least one live example of a proposal we’ve gotten really aggressive with.
Even with the teeth marks of past experience, we know to keep our eyes open to the value of exposure. If you spot a real opportunity, explain your pricing motives, and deliver, there’s no question you can benefit from high-profile work. You could probably even make a case that it’s a replacement to traditional advertising.
Just make sure it’s on your own terms.
2 Responses to “Reducing rates”
Like you guys we have been building websites since the mid nineties. Picking the right clients is the hardest thing ever. We too have been suckered into reducing our rates for high profile work. I think though I have done this or the last time – unless there is some new learning in a project – in other words where we share a little of the risk with the client in order to learn somethng new we have stopped reducing rates for anyone. We found reducing rates was bad for our staff, the client forgot 5 minutes after you did the deal, and the publicity never matched the promise and if you did get more work the discount had generally been advertised to the new prospect who wanted the same deal.
So what do we do now. We quote with a full margin on all our projects. If the decision is entirely about the price we don’t want the work.
[...] a side note, we proved during this time that buying work (cutting rates) does nothing to glamour clients or speed up decisions. We tried often enough to [...]