When is discounting your B2B services OK?

Never, sometimes, when you want to?  Here is my take on discounting your services.  In retail, discounting and sales are expected.  But when a business to business transaction is being made, should discounts be provided when the prospective client asks for them?

If you are fairly priced for the marketplace and for the quality of your services – NEVER discount!  This de-values your service and these prospective clients do not realize the value of your experience and quality of work.  They can be demanding and expect more service for no more money.

However, you may offer stellar quality (or think you do), and you justify that you can charge grossly more than the market threshold.  I would caution one against this.

I recently heard from one of my clients who was using a business provider for virtual assistance work.  The VA was charging $20 more per hour than the average rate in the marketplace.  My client told me that the reason the provider gave for being more expensive per hour was their efficiency and accuracy in work.  However, the time charged monthly for the work done, hardly seemed efficient.  Minor mistakes were made as well. 

At a rate that is 37% more than the market value, one would expect work to be done with no mistakes and be done in quite a bit less time. 

It is good to be confident in the quality of service you provide, but it must be in alignment with the market value for that service and target market you choose to go after.

Thus, if you are fairly priced, never discount.  You may feel the need to do so to win the business, but in the end, those clients are the ones, who expect more and want to pay less.  If a payment plan is needed, as a business owner, you can choose to do this.  Also, an easy and affordable way to assist with a payment plan is to accept credit cards.  For small businesses that do not have high dollar volumes in credit card requests, PayPal offers a great resource for this service.

 

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