When to Discount Your Services

As a service provider, it’s hard to price for value. What you’re delivering seems intangible and it’s based on experience and results yet unseen. Therefore, you encounter many skeptics.

First, Let’s Start with a Story

As photography entered the digital age and became accessible to virtually anyone with a mobile phone, the wizard behind the curtain suddenly seemed so…human.

Unfortunately, many photographers shot themselves (and our industry) in the foot by providing mediocre professional photos or poor customer service at high prices. In an age where “quick” images can be shot and edited on an iPhone, how do professionals make real income and know when to discount our services?

The tips in this post focus on photography as the example, but these tips apply to any service provider.

Offer “Discounts” When Starting Out

Let’s be clear: You are not discounting your work. You are entering the market at a lower rate. When our work can’t stack up to the quality of long-time pros, it’s ok to start out this way. I used to do family photo sessions for $50 to $100 which included travel time, editing, photographing and project coordination. Over time, however, I realized it wasn’t sustainable.

Make sure you have a clear understanding of your out-of-pocket expenses and ensure your fee covers those fees and at least a minimum wage rate. While it’s ok to do a few freebies at the very beginning, it’s a bad habit to lowball your own work after more than a few projects, lest you set the wrong expectations while heading down a path to burnout.

Offer discounts if it’s a job that would truly boost your portfolio, is in alignment with your business, and makes you a more attractive brand.

Give Discounts By Giving Less

You’ve got a cool client who wants to hire you. The work sounds exciting and it would bolster your portfolio. Now, what?

Offer less. This means quantity not quality.

If you normally deliver 100 images from a photo session, consider shortening your session time, hosting it at a location very close to your home, and deliver only 20 edited images. You save time in traveling, shooting, editing and in online data storage fees.

Get creative. Don’t want to limit the quantity? Limit the image resolution. I will give clients a way to get low-res images that work well for social media and web-sharing, but will require them to print exclusively through me if I know they can’t cushion the full cost of a session. It incrementally gets us both what we want.

Find healthy boundaries that help you love your clients without being a martyr for your own cause.

Offer Discounts When There’s an ROI

Your time and services should always have some return on investment. They can be tangible (extrinsically motivated) or intangible (intrinsically motivated).

I will often give discounted or free services to nonprofits in the form of my services or an in-kind donation. However, even for a non-profit, I request some form goodwill in the form of marketing and brand evangelism in exchange for what I provide in free services.

I request to be mentioned and tagged in every post that features my image. I ask them to kindly refer me to people they know in their network. I ask to display my marketing materials in silent auctions with business cards easily accessible.

If my images go into an abyss where I get no exposure, it’s a very lopsided exchange of charity. The time I spend supporting a nonprofit comes at the cost of new, profitable business leads. When each paycheck is unpredictable, it’s important to balance charity with the practical. You can be kind and protect your business.

Offer Discounts When You Can Be efficient

I charge $250 for a single headshot. Yes, that is 1 image for $250. But based on my photography workflow and business overhead, you’ll understand that even at that rate — which seems pricey to some — I make very little profit.

However, when I can line up headshot sessions back-to-back with 5-8 clients in one day, I can sometimes run a promotional discount to attract new clients (bonus for them) AND be more profitable because of time efficiencies (bonus for me). Consider all the ways you spend doing repeatable, lower-profit tasks and see where you can bundle your offerings.

Offer a Discount When You’ve Made a Mistake

We’ve all delivered work that wasn’t totally up to par. First, to try to fix the mistake before giving a discount. Meaning, if a shoot didn’t go well, offer a repeat session. If a photo just didn’t come out well, can you outsource the retouching to fix it?

You can offer a small refund or discount as an “inconvenience tax” to make amends. But don’t offer a full refund unless it’s really and totally necessary — and even then — you should be a master at setting expectations and using business contracts to prevent price vultures.

When NOT to Discount Your Services

I strongly recommend not offering discounts in these circumstances:

• When your service is already priced at a very low profit margin.

• When you already have a robust portfolio of work and experience. Why give someone discount on work you already rock at full price?

• When you have plenty of paying customers.

• When you have a difficult client who simply doesn’t want pay full price. Hail to the negotiators out there. But we can’t all be pushovers.

• When you don’t value yourself. Chronic discounting to the point of self-sacrifice is a sign of poor self-worth and people-pleasing. Consider seeing a money mindset coach to work through those habits with business.

But I Don’t Want to Hurt Anyone’s Feelings

Let me share a story. I have a client who I love. She is loyal. We are friends. But when I raised my prices, it sort of rocked her world. As someone who processes her world feelings first, logic second, I wanted to retreat from this “conflict” by lowering my fee.

And then it hit me: She lives in a home that costs $350K. She drives a $30K car. She’s carrying a $300 purse and wearing a $300 outfit. She’s totally entitled to all of those luxuries.

Discounting my rate would effectively pay me $8/hour.

My Enneagram 9 can be way too easy-going, especially when I’m moving quickly or haven’t truly considered what I want. As I became more overworked, overstressed and needed to hire help, I had no choice but to set better boundaries and stop discounting my work. I learned to embrace price increases, tighten my services, and benevolently let go when the business relationship doesn’t make sense.

Love yourself well so you can love your clients even better. Know your worth, friends!