Why Discounts Are Hurting Business
When you discount your services, you are undercutting the value of the entire industry. Ever bought a Groupon for a discounted exercise class, but then never went again for full price? If you pay less for something it is really hard to fork over more money later. When you lower the price, it sets a precedent and people don't want to pay more for it. The perceived value goes down. This may not matter when you are first starting or if you are in a slump and need whatever clients you can get, but it will matter later when you are wanting to get paid more for your services or want to work on higher budgets. It also matters to all the other designers out there working their butts off and growing their businesses.
Discounts can be in the form of a traditional discount, where you are selling your service for less than you originally had it. For example, you go into a new client meeting charging $100 per hour and they negotiate you down to $75. Or you agree to work with them without markup. Or you don't charge for each hour you work on a project. Another way you may be undervaluing yourself and the interior design industry is by charging too little from the get-go. If you're an experienced designer charging much less than market value for your services, you are hurting business.
Discounts hurt business because they display a lack of confidence in your service. When you lower the price of your service, you are saying to the client that you don't have confidence in what you are offering, which in turn, lowers the client's confidence in it as well. How confident would you feel if your plumber/lawyer/doctor were giving you discounted services? Would you feel confident that they were doing their best job or that they were good at their job? You don't want to start a relationship where both of you don't have confidence in the business you provide.
Discounts hurt business because they undervalue what you're offering. It is up to you to figure out what the value of your services is. This should be based on your education, experience, and expertise. Discounts and low costs are usually associated with lower quality. When you discount your services you are saying to the client that what you are offering is lower quality. You're not demonstrating your value effectively if you discount. Your conversations with clients should be focused on the value that you bring to the table and what you can provide to them, not how cheaply they can get it.
Discounts hurt business because they set a precedent. Like in my Groupon example above, you charge a low price and clients will always expect a discount. Even if you raise your prices, that client can say: you gave me a discount last time. You'll always be stuck offering them discounted pricing. Trust me, you don't want Always-Asking-for-a-Discount Dude as a client.
Be confident in how you price your interior design services. Don't let potential clients dictate how you run your business and how you charge. Know your value and be able to effectively communicate that to clients. Keep in mind that like attracts like, do you want clients that are looking for a discount or recognize your value and want to pay you for such?
Do you have experience in discounts? Share your knowledge in the comments below! #collaborationovercompetition