Commentary on lowering prices to keep old / win new clients Thread poster: Viktoria Gimbe
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I just wanted to share a short and sweet marketing post about lowering your prices to keep your clients and/or to gain new clients. Don't just read the post - read the comments as well. Very sound advice!
http://www.drewsmarketingminute.com/2007/06/what_does_this_.html
[Subject edited by staff or moderator 2008-03-17 16:13]
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I was interested to note his answer, had they asked "how can we keep your business?"
I thought he would have answered in terms of offering the same or better service, adding some value he hadn't thought of, and yes, perhaps some price aspect (as he said, 200 dollars less didn't hurt).
He didn't even say something unlikely but still potentially do-able, like "move to Des Moines, 'cos I need a service provider in my town/state".
No, he just said "you can't".
... See more I was interested to note his answer, had they asked "how can we keep your business?"
I thought he would have answered in terms of offering the same or better service, adding some value he hadn't thought of, and yes, perhaps some price aspect (as he said, 200 dollars less didn't hurt).
He didn't even say something unlikely but still potentially do-able, like "move to Des Moines, 'cos I need a service provider in my town/state".
No, he just said "you can't".
Very smart answer, I'm sure. but I'm afraid it rather devalued the rest of the piece in my eyes.
Even if the requirement is next-to-impossible, I still feel it should have been stated. ▲ Collapse
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Brandis (X)
Local time: 06:25
English to German
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| general practises.. | Mar 18, 2008 |
Hi! agencies normally offer varying prices, most usually low prices at the beginning of the year, peak prices in the middle of the year and somewhat moderate prices around November and come to an average increase or decrease of the annual revenue. Some also offer sommer prices and winter prices. Brandis
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Nicole Schnell 
United States
Local time: 21:25
English to German
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In memoriam | Brandis - do you mean travel agencies? | Mar 18, 2008 |
Brandis wrote:
Hi! agencies normally offer varying prices, most usually low prices at the beginning of the year, peak prices in the middle of the year and somewhat moderate prices around November and come to an average increase or decrease of the annual revenue. Some also offer sommer prices and winter prices. Brandis
Sounds like a year-end-translation-sale and I am afraid (or glad..) that I have never encountered such a phenomenon before.
Must work on my Easter-sales now. Buy one word, get one free. One translation per person, while supply lasts.
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Brandis (X)
Local time: 06:25
English to German
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| If I had meant travel agencies ... | Mar 18, 2008 |
Nicole Schnell wrote: Brandis wrote:
Hi! agencies normally offer varying prices, most usually low prices at the beginning of the year, peak prices in the middle of the year and somewhat moderate prices around November and come to an average increase or decrease of the annual revenue. Some also offer sommer prices and winter prices. Brandis Sounds like a year-end-translation-sale and I am afraid (or glad..) that I have never encountered such a phenomenon before. Must work on my Easter-sales now. Buy one word, get one free. One translation per person, while supply lasts.
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Nicole Schnell
United States
Local time: 21:25
English to German
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In memoriam | Didn't mean to sound nasty, Brandis | Mar 18, 2008 |
My apologies.
The concept of varying rates due to seasons is just unbelievable. My time is worth just the same, in winter as in summer.
Which brings us back to the interesting article above.
Unfortunately, we always have to fight the above mentioned "price consciousness" of customers. I am, however, not a retail business that operates with mark-ups of 50% which allows a certain flexibility. There is no such thing as seasonal sales in my business.
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Samuel Murray
Netherlands
Local time: 06:25
Member (2006)
English to Afrikaans
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| Nobody does business at break-even point | Mar 18, 2008 |
This Drew must have a very communistic idea of doing business. He thinks that everyone he does business with, charges him exactly what they need to charge him so that they can break even. In other words, make no profit above the budgeted profit (if you believe such a silly notion).
Drew also thinks that he is his service provider's only customer. Well, he is not. The service provider has many customers, and if Drew becomes one of their loss-leaders, the service provider will certainly suffer for it... but they have other customers who will subsidise him (unknowingly).
Also, a break-even customer who generates sufficient income is worth more than a profit-leading customer who doesn't generate any income whatsoever.
Don't forget how much the marketing costs are for every successful sale. Even if you bring down that sale to a break-even point, your marketing costs still weren't wasted. But if you lose that sale because you are unwilling to drop your price, you have just wasted your marketing costs for that sale, and the average marketing cost of all your other sales have just gone up.
[Edited at 2008-03-18 06:09]
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gianfranco
Brazil
Local time: 01:25
Member (2001)
English to Italian
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| What about the southern emisphere? | Mar 18, 2008 |
Brandis wrote:
Hi! agencies normally offer varying prices, most usually low prices at the beginning of the year, peak prices in the middle of the year and somewhat moderate prices around November and come to an average increase or decrease of the annual revenue. Some also offer sommer prices and winter prices. Brandis
I live in the Southern emisphere, do I have to swap summer and winter? I mean, increase or decrease the price for my fresh summer production to European or US customers, when they are in the winter season?
Consider that in summer is quite rainy here and some of my translations may be wet or prone to go moldy. Shall I sell them with a discount?
In winter my work comes out fine and dry, so it can keep for longer. I just advice the customer to store it in a dry and ventilated place, if they do not consume it within a few days after purchase.
bye
Gianfranco
[Edited at 2008-03-18 17:40]
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Viktoria Gimbe
Canada
Local time: 00:25
English to French
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TOPIC STARTER | How can we keep your business | Mar 18, 2008 |
I also would have liked a more detailed answer to that question. But besides that, I find he is right.
When he talks about his old supplier offering to match the prospective supplier's price, what is not to be overlooked is that if the old supplier can afford to lower his price (if he is offering a new, lower price, that means that even at the new price, he is still making enough profit to justify keeping that client), he would have been able to do so from the onset. I don't think t... See more I also would have liked a more detailed answer to that question. But besides that, I find he is right.
When he talks about his old supplier offering to match the prospective supplier's price, what is not to be overlooked is that if the old supplier can afford to lower his price (if he is offering a new, lower price, that means that even at the new price, he is still making enough profit to justify keeping that client), he would have been able to do so from the onset. I don't think the old price was the standard one - it probably was a price that allowed the supplier to make more profit than the cost of the service to them. And in that sense, yes, Drew is right in feeling cheated. A good example of this in the translation business would be an agency who tells the client that they have a serious QA system in place while they don't even proofread the documents themselves. Of course, they can offer a lower price if the client gets fussy - they have been charging the same client for services they never supplied to him, and if they keep not providing the service they charge for, lowering their rate by a couple pennies can't hurt them. In fact, they will still be making abusive profit... The problem with this is that in the end (after the agency lowered the price), the end client ends up believing that a reviewed, proofread translation is worth only that much. What they don't know is that their translation was not reviewed nor proofread and that is how they managed to get a low price. And then, we wonder why end clients think we are trying to @#$% them over when we quote them 18 cents...
My answer to the question would have been to add some kind of value to my service, one which would not have costed me much more in terms of time and money, but that would still have made a difference to the client. But I admit I would prefer offering more value to justify a price increase and not to be simply able to keep the client. And this is precisely the reason why I posted this thread. I was hoping that people were able to see past their pockets and realize that when you are at the point where you have to lower your prices in order to keep a client, you are in the wrong market segment and should play on some other field. Except that too many of us only consider themselves as translators and have no idea that freelance translating is business, first and foremost.
[Edited at 2008-03-19 00:00] ▲ Collapse
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