Discounts on services
This is my second article of my guide to discounts for developers. If you haven't read the first article where I created the foundation for this article, you can read it here.
So, what is my recommendation for discounts on services?
Don't do it.
This is a bold statement, but I can not come up with a single reason sustainable why you would discount your services. On the flip side, there are many arguments that clients have why you should do that, but they are all bonkers.
So, how do you deal with the most common ones?
This is our first project together
That's a fact but not a reason. Before you work with a client, you need to build trust with them. I have an article on this topic on its own here.
If you give me a discount now, I'll have more work in the future
This claim might be true, but the client will expect that you work for the discount again. Raising your price for an existing client is hard and nearly impossible, so if you agree to a low rate now, you'll work on this discount forever.
We don't have enough money
It might be true, but this isn't your problem. If your clients don't have enough money, they didn't create a valuable business case for the project, and so it does not make sense to proceed here. Your clients are likely much bigger than your company, and they have much more money than you. You shouldn't give them a discount so that they can keep this money. If they come up with a solid business case for the project, they can pay you fairly and a discount only results in less money for you.
Offshore is much cheaper
Honestly, they can try. I've rebuilt quite a few projects that have been built by offshore teams that had to face a cultural and a language barrier. So the clients have to pay the offshore team first and end up paying you again to start from scratch. You'll never be able to compete on prices alone with teams whose cost of living is much cheaper than yours.
So as you see, your time is valuable, and there is no rational reason to discount your service. It's not possible to sell more services with a discount because your time is limited and not scalable. Selling services at discounts mostly results in too much work and is very stressful because you need to work more to earn enough.
If you are still not convinced, I've written a blog post why you shouldn't do it in general, here.
This post is the second post in a series on discounts. You can find the other posts in my developers guide on discounts:
- General introduction to discounts
- You are here
- Discounts on one-off products like software, (e)books and online courses
- Discounts on SaaS platforms
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