If you work for yourself, your livelihood is based entirely on your ability to attract clients and keep them using your special set of skills. Other than being skilled and talented, one way to accomplish this is by offering discounts. This can be a great way to build customer loyalty and repay the clients who have helped you make a living. On the other hand, giving discounts can be tricky, as there are ways it can end up doing more harm than good. Before you start giving out discounts, here are a few things to keep in mind.
Always Send An Invoice
Even if you do a job for free or decide not to charge for one part of a project, you still need to send your client an invoice. For starters, you’ll want them to see in writing that they’re getting a price break. Secondly, if there’s any kind of dispute later on, you’ll have a record of work you did for free or at a discount. You never know how this could turn out to be important later on, so make sure you still do everything by the book, even when giving discounts.
Offer Discounts for Prompt Payments
One unique way for independent contractors to offer discounts to their clients is by offering the opportunity to receive a discount for paying an invoice as soon as possible. It’s not a bad idea to reward the clients who pay on time; after all, doing so helps you out. Of course, you have to make it clear that the discount is only available if the invoice is paid in full and on time. But as long as you’re both on the same page, giving a discount for prompt payments can be a win-win for both you and your clients.
Give Discounts To Show Appreciation
Your motivation for giving discounts should always be to reward clients and show your appreciation for them. It should not be to entice new clients. If you start out a business relationship by offering a discount, that client will come to expect that price every time, believing that you can perform the job for that price every time. If you have to give a discount in order to get a new client, that’s probably not a client you’ll want to keep over the long term.
Offer Extra Services on the House
Instead of giving a client a reduction in price, which could hurt your bottom line, consider giving them extra services on the house. If you can do a little extra work and go the extra mile in a way that will benefit them, go ahead and do it to show your appreciation in lieu of a discount or in addition to a smaller discount. This shows creativity and also shows your client that you care about the finished product and want to do your best work for them.
Don’t Give Discounts To Everybody
It’s important to be judicious with who you give discounts to. As mentioned, you’ll want to resist the urge to give newer customers a discount until you have built a strong foundation. Discounts should be given based on trust, so only give them to your top clients. This will also prevent you from giving discounts to too many clients, which can be a mistake.