How to handle client's discount request without lowering your fee

If you sell any kind of service, you’ve been in this scenario: You present your carefully crafted proposal to a client. They respond by asking for a $5000 discount.

I discovered an effective way to handle this situation without lowering my fee in Kevin Doolan’s book Mastering Services Pricing.

When a client wants to negotiate your price, it’s a good sign. It means they want to work with you. But they’d like you to lower your cost to match the cheapest supplier. From their perspective, they have nothing to lose by asking.

It’s tempting to agree to their demand to appear helpful and flexible. After all, we want our clients to be happy. However, agreeing to discounts can make you look dishonest! If you quickly lower your fee, it might seem like your initial quote was inflated. The clients won’t be pleased. They will feel cheated and think they could have asked for an even bigger discount.

So don’t lower your fee. Don’t let a competitor, who may be delivering subpar work at unreasonable rates, set your price.

Here’s what to do:

Instead of giving clients a quote for the full project, break down the project into sections. Provide specific costs for each section. Avoid round figures; use precise amounts like $9,540 or $1950. They’ll look more calculated and justified.

If the client asks for a discount, explain that you can't deliver the full scope of work within their budget. But you can adjust the scope to fit their budget. For example, you can remove or scale down certain items. Go through the proposal with the client and trim the scope accordingly.

You are now having a collaborative discussion about the scope of the work. Not a combative one about price.

Clients might see a section and decide they don’t need it. You can remove it to lower the cost. Or they might say $11,200 is too much for marketing research. You could suggest researching only the two most important things, reducing the cost to $4700.

If the client still asks for a small discount, consider swaps. Request something from them in return for a small discount. This could be additional work, a video endorsement you can use in your marketing, warm introductions to potential new clients, or something that helps you grow your business.

If you give them a discount without asking for something in return, it’ll just encourage them to keep asking for more in the future.