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Long term client putting pressure on rate
Thread poster: Thomas Rebotier

Thomas Rebotier  Identity Verified
Local time: 06:19
English to French
Dec 8, 2015

One of my major clients, about 30% of my business, sent me a mail explaining how they have lost clients over the year, polled their clients about it and it comes down to cost. They also quote the pressure of MT/PE on our industry. They are setting a strandard rate for my language pair lower by 12.5% than the rate I am giving them, which is already my "older client" rate (a cent lower than new clients). They have always been pushing down on rates but this is stronger than before. Agreeing to the new rate would make me a "preferred linguist", with presumably more volume. What are your thoughts?

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Andy Lemminger  Identity Verified
Canada
Local time: 07:20
Member (2002)
English to German
No Dec 8, 2015

No matter how low you go, these type of clients will always keep pushing.

I'd say no and see what happens.


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Dan Lucas  Identity Verified
United Kingdom
Local time: 14:20
Member (2014)
Japanese to English
Go lower, not higher Dec 8, 2015

Thomas Rebotier wrote:
Agreeing to the new rate would make me a "preferred linguist", with presumably more volume. What are your thoughts?

That would make you more dependent on them, right? And the only reason you've not already said no to their request is that they are already a hefty 30% of your business, correct?

By which I mean, if this client was only 5% of business you'd not have a problem rejecting this request. It's because they account for 30% of your business that you have a problem.

If you cut your rate and you do get more volume, and this client becomes 50% of your business, what will you do in a year's time when they say "things are tough, we need you to cut your rates again"?

You should be reducing your dependence on this client, not increasing it.

Regards
Dan

[Edited at 2015-12-08 18:32 GMT]


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Elif Baykara  Identity Verified
Turkey
Local time: 17:20
Member (2015)
German to Turkish
+ ...
I would say "no". Dec 8, 2015

This is not negotiating the rates, this is whining.

You will work more for lower earnings because "the industry is under the pressure of MT/PE". And this is all because this particular company wants to work with you

There are clients out there who know about translating, and they survive under the same conditions. I would not lower my rates, but rather limit the percentage of work I provide them and look for better clients.


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Thayenga  Identity Verified
Germany
Local time: 15:20
Member (2009)
English to German
+ ...
Charming you Dec 8, 2015

Thomas Rebotier wrote:
They are setting a strandard rate for my language pair lower by 12.5% than the rate I am giving them, which is already my "older client" rate (a cent lower than new clients). They have always been pushing down on rates but this is stronger than before. Agreeing to the new rate would make me a "preferred linguist", with presumably more volume. What are your thoughts?


Hi Thomas,

A rate cut of 12.5% is quite heavy, even more so considering the fact that this client makes up about 30% of your work/income. This means that those 30% income will be reduced by 12.5%. Only you know the value of that cut in Euros.

Becoming their "preferred linguist" - soley at your expense - sounds nice, and it's combined with the promise of "presumably more volume". Is this what you want? Can you afford to work more in order to reach your present income? That is, if this client really provides you with more work.

Yes, the MTPE is beginning to take its toll on some translators and in some fields, while there are still agencies and end clients who value a good, rather excellent human translation, and who are willing to pay for it.

Just recently a long-standing client of mine has reduced one of their rates by nearly 70% without providing a justification or even offering an explanation. I was also faced with the choice to either work 70% more just to maintain my present, rather former income from this client, or to remember all the studies and other investments I've made to be where I am today. Not to mention the four decades of experience. My decision was easy. I remembered that I am a translator and not a machine which needs just a little (peanut) oil to keep going.

These are my 2 cents, while the decision what you will or can do is solely yours.

Best,
Thayenga.

[Edited at 2015-12-08 18:48 GMT]


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Sheila Wilson  Identity Verified
Spain
Local time: 14:20
Member (2007)
English
+ ...
Hopefully, you already know the answer Dec 8, 2015

Dan Lucas wrote:
You should be reducing your dependence on this client, not increasing it.

You should already have been planning to phase them out of your client base, as they're paying less than newer clients. It's just become a little more urgent to find replacements. So do whatever you feel is best to plug the shortfall in your income in the short term. You may want to take on a small amount of work for them, at whatever rate you can get, if you need to put food on the table, but not too much. You'll be needing a lot of free time to devote to marketing and networking, looking for agency and direct clients both online and offline.

With your excellent background (in terms of education, experience and your powerful CV and website), you should be able to find clients happy to pay YOUR top rates.


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 15:20
Member (2005)
English to Spanish
+ ...
Beware of the muddy valley and keep pushing for the peak Dec 8, 2015

Dan Lucas wrote:
You should be reducing your dependence on this client, not increasing it.

Clearly the call in this situation is to try to reduce the dependence on this customer, and increase your marketing efforts, mostly by polishing your profile, strengthening your qualification, improving your online presence overall, but also by contacting potential customers in your specific specialty areas. Make sure you begin to provide an excellent, responsive service to your other customers, thus reducing the priority of this customer in your daily work.

When an agency resorts to reducing their rate, they are unfortunately already going down the slope, either financially or mentally. Unless they change their mind and resume the fight for quality and high rates with their customers, they will grab you by the ankle and drag you into the mud.

Keep your best quality and do not reduce your rate. If they want your quality, they ought to pay for it. If they cannot afford you, then they will have to choose someone cheaper, will lose quality pretty soon, and will end losing customers no matter how low the rate. If they insist in ruining their credibility, you definitely want to be at a safe distance from the tree when it falls...


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Charlie Bavington  Identity Verified
Local time: 14:20
French to English
Just to be different Dec 8, 2015

Not to disagree with the general trend too much, obviously, as rate cuts are never good news, and you probably knew that 30% was too much for a single client, but it can happen to the best of us.

It's all well and good people who aren't relying on you to put bread on the table and keep a roof over their head to dish out advice to "say NO". It has no impact on them whatsoever. But hey, that's the internet. It's not real life, is it....?

Putting myself in your shoes, I know that I'd object (obviously), start hunting really hard for alternative sources of work, and meanwhile, yes, if they refused my objection, I'd probably cherry pick "easier" work at 12.5% less than I was earning before.

Meanwhile, an idea occurred to me....

Thomas Rebotier wrote:

They also quote the pressure of MT/PE on our industry. They are setting a strandard rate for my language pair lower by 12.5%


If MT is the cause, ask if you have the option to use it unconditionally on all translations at the new, lower rate, with complete immunity from any confidentiality considerations, liability for infringements, anything (in writing).

If they say no, you can respond that MT can therefore hardly be a justification for a rate cut, and therefore you expect things to stay as they are.

If they say yes, you should (in my limited experience) be able to translate at least 12.5% faster than previously, and you'll be the winner

Either way, you should still think about reducing the proportion of work you do for them.

[Edited at 2015-12-08 20:05 GMT]


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Sorana_M.
Romania
Local time: 16:20
English to Romanian
+ ...
Unless... Dec 8, 2015

Thomas Rebotier wrote:

What are your thoughts?


If you are irreplaceable - and you are the only one who knows this - don't lower your rates.


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KateKaminski
Local time: 14:20
German to English
Say no Dec 8, 2015

This happened to me a few years ago with a large agency. Just tell them you are unable to reduce your rates and things will probably carry on as they were.

They are like any company who is trying to increase their margins. The email you received is just part of a larger incentive to reduce their costs. Unless they are a very small agency, you are one of many "suppliers" to them. As long as they are making some sort of profit from you and work with you goes smoothly, they will keep sending work!


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Soonthon LUPKITARO(Ph.D.)  Identity Verified
Thailand
Local time: 21:20
Member (2004)
English to Thai
+ ...
More than pressure Dec 9, 2015

Thomas Rebotier wrote:

One of my major clients, about 30% of my business, sent me a mail explaining how they have lost clients over the year, polled their clients about it and it comes down to cost. They also quote the pressure of MT/PE on our industry. They are setting a strandard rate for my language pair lower by 12.5% than the rate I am giving them, which is already my "older client" rate (a cent lower than new clients). They have always been pushing down on rates but this is stronger than before. Agreeing to the new rate would make me a "preferred linguist", with presumably more volume. What are your thoughts?


In my case, an old agency in Ireland said my translation quality was bad and refused to pay. In fact, they admired my jobs until the one before such dispute.
I understand that your case is a type of dishonest agency, right?

Soonthon L.


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Thomas Rebotier  Identity Verified
Local time: 06:20
English to French
TOPIC STARTER
replies to 1st 9 replies Dec 9, 2015

In reply to the first batch of replies:

To Soonthon: No, they are not not dishonest at all. As I said, we have a great working relationship. But business is business I have given them 5 stars on blue board and will again.

To Charlie: I don't think that would be an option. Besides, MT is actually counterproductive at this point for me. I work faster producing my own than "fixing" bad sentences...

To Tomas: You have an interesting point by saying an agency lowering rates is on the way out and one that I actually want to explore, although I have no clue how. I would rather have thought they were proactive or even maybe trying to grow. It's clear that if I knew their price structure and the trend in their business it would help my decision. I am wondering if I should ask outright.

To Sheila: I would not say I'm phasing them out yet; but i have in the past year at least twice refused large jobs they offered at discounted rates during peak periods (EN>FR those are typically reliably EOY, april/may and september), and found myself all the wiser for it because other clients did offer me full-rate jobs a bit later. This outlines another side of the quandary: if I accept regular lower rate work, I become more often unavailable for the "juicy" job that usually comes with short delays attached. But at the same time, the security of entering such a partnership is also valuable.

To Thayega: I believe they would make good on the promise of more work. I used to do evven more work for them, and I know I am one of the best they have in my pair but I think that several others already at the "new rate". By catching up on that, I'd get a higher share. I am not sure I could afford much more work wihtout a drop in quality. It's not that I am full time, by far, but because of the peakiness of activity, the periods of real income are very intense, and like many of us there is the green zone, the red zone, and the in-between. I've been consistently refusing work that would put me in the red or even in-between. As a rule of thumb I'll accept work that puts pressure of that type only when it's a follow-up or a client where I'm the sole translator of the agency for. Otherwise I'll avoid because I know being under duress leads to cutting corners and that simply adds stress I don't need...

To Elif: If I choose to not follow the offer, my percentage of work with them will drop spontaneously, I won't have to reduce it myself...

To Dan: You have a very good point, the best I have read here or thought of so far. Out of convenience I have let myself into dependancy and that is not good.

To Andy: the "see what happens" is perhaps not reasonible!!! I'd rather have all angles covered, whatever my decision is

Thank you! Keep the answers coming please!


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Annamaria Amik  Identity Verified
Local time: 16:20
Romanian to English
+ ...
Not very helpful, but... Dec 9, 2015

... you could ask them: so are you matching my 12.5% cut with a 12.5% cut in your own profit margin?

If they do insist on this cut and give reasonable explanations, you could offer to split the difference and agree to a 6-7% cut on a temporary basis (meaning that if it causes you too much loss, you would gradually move to better-paying clients). Let them know that while you may become their 'preferred linguist', they would definitely lose their preferred client position with you.

[Edited at 2015-12-09 06:02 GMT]


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Radian Yazynin  Identity Verified
Local time: 17:20
Member (2004)
English to Russian
+ ...
It's too right! Dec 9, 2015

Charlie Bavington wrote:

If MT is the cause, ask if you have the option to use it unconditionally on all translations at the new, lower rate ... If they say no, you can respond that MT can therefore hardly be a justification for a rate cut

-


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Ana Cuesta  Identity Verified
Spain
Local time: 15:20
Member
English to Spanish
Weighing risks Dec 9, 2015

Thomas Rebotier wrote:

One of my major clients, about 30% of my business, sent me a mail explaining how they have lost clients over the year, polled their clients about it and it comes down to cost. They also quote the pressure of MT/PE on our industry. They are setting a strandard rate for my language pair lower by 12.5% than the rate I am giving them, which is already my "older client" rate (a cent lower than new clients). They have always been pushing down on rates but this is stronger than before. Agreeing to the new rate would make me a "preferred linguist", with presumably more volume. What are your thoughts?


Do you reckon they would drop you altogether if you refuse their new rate or just send you less work? I understand saying goodbye to 30% of your income may not be an option, but accepting their reasoning would only put you in a downward spiral. If they send you less work in the future, you would be free to accept better-paid jobs from other clients and gradually decrease your dependence on this one. And, mind you, if they send you 25% less work you will only lose 12.5% more of your income from them than by accepting their offer.


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Long term client putting pressure on rate

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