Are Your Low Prices Scaring Away Clients?

An older cousin of mine owns a women’s luxury clothing store and bridal shop, and during one of my summers home from college years ago, he hired me to help him out. It wasn’t a business-related position. It was more of an apprenticeship in chandelier dusting, storeroom organizing, and wall painting. But one thing my cousin said that was business related always stuck with me.

He once mentioned that whenever the store had items on the sale rack, a fire-sale price didn’t make a dress more appealing to customers. In fact, steeply discounted items wouldn’t move. Suppose a $700 dress was leftover from the previous season’s line, and the store wanted to get rid of it to make way for new inventory. If that dress was marked down to $200, no one would buy it. But if the price was moved up to $500, it could find a buyer.

The store attracts a wealthy clientele, to be sure, but even though the customers have means, it doesn’t mean they don’t appreciate a good value. Still, something about too low a price creates suspicion. It raises negative questions in the customers’ minds. Is the dress really that unfashionable? Is the quality that bad that it should be sold for so much less than everything else in the store?

The luxury market isn’t the only place where low prices can go too low. Personally, I won’t eat at Taco Bell or Rally’s. Even when I’m looking for a cheap fast-food meal, these chains’ food is so cheap, that it makes me wonder how the prices are possible. What’s in that meat? Is it really fit for human consumption? (In this situation at least, I think my suspicions are well founded, judging by the queasy stomach I’ve experienced after eating something called a “chalupa.”)

As a creative professional, the lesson to draw from these examples is that your clients aren’t necessarily after rock-bottom prices. Rather, rock-bottom prices can put off potential clients. Especially when freelancers are first starting out and they’re unsure of the value of their services, they may be tempted to lowball a project quote. I know I personally fell in that trap a few times when I was first getting my feet wet as a freelancer.

Your clients are looking for value, so price your services according to their value in the marketplace. Admittedly, it can be tricky to develop your rate structure, but beware of setting rates too low. In some cases, quoting an exceedingly low price may indeed land you the job (and leave you overworked and with less income than you deserve). In other cases, it may backfire and make it so you don’t get the project at all.

Whether your specialty is writing, graphic design, photography or another creative field, in the end you’re selling peace of mind in your expertise. Your clients know they can’t do a project themselves. That’s why they’re bringing you on board. You need to make them feel comfortable that you can handle the job. And peace of mind that seems too cheap doesn’t provide peace of mind at all.

Based in New Orleans, Henry Alpert writes marketing copy, research reports, and white papers for design studios, ad agencies, in-house marketing departments, and market research firms. More information about Henry can be found on the website for his company, Action Copy. Also, check out his blog, The Awkward Adverb.

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