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Long-term client requesting a substantial discount
Thread poster: Sylvie A. Martlew
Sylvie A. Martlew
Jamaica
Local time: 13:55
German to English
+ ...
Jun 14

Hello,

I've just received a rather displeasing e-mail from a long-term agency client and am uncertain as to how I should respond. Looking for advice.

The agency in question has been one of my three best clients for almost four years; I do a very large amount of work for them and have a very good relationship with their project managers. Yesterday, their Vendor Management Department e-mailed me to inform me about discounting agreements they have recently signed for their own long-term customers, and they are asking me to agree to a similar contract. Essentially, they are demanding a 12.5% discount applied on everything I charge them, applied on a biannual basis. For the first half of 2017, my work for them came to a total of EUR 15,000, meaning that they want a discount of almost EUR 2000 out of the blue, and then again at the end of the year.

I am already giving this company a great deal of privileges as is: they pay my absolute minimum rate of EUR 0.08 per source word; I virtually never apply any surcharge for rush jobs, research-intensive projects, even work done outside my office hours and on weekends. Some of their end clients insist on me taking care of their texts rather than any other translator, even if it means waiting through two weeks of my holidays, because they appreciate the quality of my work. When their clients have complaints about jobs other translators messed up, I retranslate at the very last minute, again without a rush surcharge. They even get priority over other clients when I am almost fully booked, which happens often.

You can probably tell that I am absolutely not willing to give them any further discount. But I don't know how to express this. I could technically afford losing this client, but it would really hurt -- not just because they provide a considerable share of my income but also because they provide interesting work and their PMs are wonderful to work with. I'm not sure if they would be willing to lose me as a supplier. I guess refusing the discount would be a gamble.

Any experience with this sort of thing?


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DZiW
Ukraine
English to Russian
+ ...
Even more something for nothing Jun 14

Sylvie, and what is the fair trade-off, what exactly you can get from them for generous 12.5%, I wonder? Why this number? Unfortunately, it's nowhere near mutual concessions for they also should offer something EQUAL for exchange.

I would try to negotiate their bids/propositions and correlate the discount accordingly, if any. However, not even a yearlong contract, may be a couple of month; up to six--to see how the "give-and-take" things fall in place)


Take care


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Michael Newton  Identity Verified
United States
Local time: 13:55
Member (2003)
Japanese to English
+ ...
Discount for long-term client Jun 14

With all due respect, after reading your post I had the feeling that this agency does not consider you a translator but rather a "rug" that they can walk all over. Unfortunately you have been a willing participate in this "rug" relationship. You do a lot of work for them for free, why shouldn't they squeeze the lemon even more? The best strategy is to pretend to acquiesce to them while looking for a replacement. Stop the nice guy freebies immediately. Once you have found alternate work, dump them. The agency that shakes your hand today can stab you in the back tomorrow. So-called "long-term relationships" mean nothing nowadays.

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Soonthon LUPKITARO(Ph.D.)  Identity Verified
Thailand
Local time: 01:55
Member (2004)
English to Thai
+ ...
Classic request Jun 14

Sylvie A. Martlew, M.Phil. (Oxon.) wrote:

You can probably tell that I am absolutely not willing to give them any further discount. But I don't know how to express this. I could technically afford losing this client, but it would really hurt -- not just because they provide a considerable share of my income but also because they provide interesting work and their PMs are wonderful to work with. I'm not sure if they would be willing to lose me as a supplier. I guess refusing the discount would be a gamble.

Any experience with this sort of thing?


I met with this instance continuously.
I suggest you to maintain your stance permanently e.g. offer rates your are comfortable with.
I never trust in old customers; they are naturally changeable even they are big agencies.

Dr. Soonthon Lupkitaro
Bangkok, Thailand


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Andy Lemminger  Identity Verified
Canada
Local time: 11:55
Member (2002)
English to German
I think... Jun 14

...that I know exactly who this client is.
If it's the same client (a big agency), they're bluffing. You're already not charging enough, so don't lower your fees further.
Rather wait a few months and then raise your rates.


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Radian Yazynin  Identity Verified
Local time: 21:55
Member (2004)
English to Russian
+ ...
If you generate a trend line in your long-term diagram Jun 14

it will be you who pays them for the opportunity to do translations

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Jean Dimitriadis
France
Local time: 19:55
Member (2015)
English to French
+ ...
Tough call, but stay adamant Jun 14

It is a tough call, but since you are already charging your minimum rate and are often overbooked, I don’t think you should give in.

You might lose some volume from this agency, but I don’t think the stream of work will stop altogether, especially since some of their customers want you to continue taking care of their projects. It should give you time to expand your network and likely look elsewhere for other (better paying) clients to avoid relying too much on them and risk taking too much damage.

As I see it, you have already highlighted excellent arguments for not doing so, and can use them in your answer.

For example, you can point you appreciate working with them, are already offering your most discounted rates (you should also mention that you have not raised them for some time now, if this is the case), and have even been providing premium services (rush jobs, weekend work, last minute retranslation, etc.) at no additional charge, until now: because you value your work-life balance, and because you are already overbooked during your office hours, you are likely to stop offering such services for free in the future. Those privileges should not it is taken for granted, and this aggressive proposal can be the opportunity to stop the trend. Feel free to start saying no to such jobs (without a premium) in the future. Simply because you have other projects or plans going on.

By ensuring customer loyalty and repeat business with your quality work, you are being a great asset to any agency and must absolutely stress this. The level of your work has provided them with more income, just as they expect by taking projects at "discounted rates".

You can combine the above with what I consider a simple killer argument for saying no in a "free market" as an individual business (which cannot scale above a certain volume unless it evolves into something else).

Something along these lines: "The quality of my work has been securing customer loyalty and repeat business (i.e. more turnover) to me and my clients. I often become their preferred supplier for taking care of their texts. As a result, I am fully booked at my current rates." What can they say to that? They are the ones that need to keep up here. You can even take the opportunity and say you are considering a raise. Why continue to "privilege" this company if you can be fully booked at better rates?

You can close by saying that you understand this may lead to receiving less work from them, but will glad to continue this mutually beneficial collaboration.

Good luck!

And tell us how did it go


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 19:55
Member (2005)
English to Spanish
+ ...
My approach Jun 14

While I think that this kind of requests cannot be really stopped in the long run, I try (mostly with success) to contain the tide by explaining that I work for other agencies and how unfair it would be to them that I offer you (the requesting agency) even more advantages in rate or volume discounts. Most vendor managers understand this point of view.

After twenty years in business, I consider it to be a proven fact that if an agency values your work and your person, they will keep hiring you even if you do not lower your rates. They may, however, stop sending you easy work and send you only trickier stuff their other, cheaper vendors cannot really tackle to their satisfaction. On the other hand, when an agency does not really believe in your professional value, they will eventually abandon you and try elsewhere, no matter how low you go in your rates.

All in all, in general it does pay to stay more or less at your rate level: it makes you more valuable to customers who really value your work, and helps you get rid of less attractive/financially riskier agencies.


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Ricki Farn
Germany
Local time: 19:55
Member (2005)
English to German
Follow your heart Jun 14

I left a big client over a far less brazen "discount" request two years ago, and never regretted it. Sure, that summer was financially meagre. But I finally had time to breathe and look around and find - far better work that I would never have looked for if I had stayed in the rut. Not to mention having time to myself in the summer, when the weather is just right to finally replace that wallpaper from the seventies.

I didn't try to discuss their move at that point, I just up and ran - because I felt that someone who talked to me like that, would never be a real business partner again. And from what I hear from the people who stayed, things have been in steady decline there ever since. That was just their first step in the "race to the bottom", and many big agencies are going that way.


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Christophe Delaunay  Identity Verified
Italy
Local time: 19:55
Member (2011)
Spanish to French
+ ...
Michael took the words out of my mouth! Jun 14

I was not going to quite phrase it the way he did but hey! let's call a cat a cat! You've got everything you need in his post. For you and for them.

Michael Newton wrote:

With all due respect, after reading your post I had the feeling that this agency does not consider you a translator but rather a "rug" that they can walk all over. Unfortunately you have been a willing participate in this "rug" relationship. You do a lot of work for them for free, why shouldn't they squeeze the lemon even more? The best strategy is to pretend to acquiesce to them while looking for a replacement. Stop the nice guy freebies immediately. Once you have found alternate work, dump them. The agency that shakes your hand today can stab you in the back tomorrow. So-called "long-term relationships" mean nothing nowadays.


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Dan Lucas  Identity Verified
United Kingdom
Local time: 18:55
Member (2014)
Japanese to English
If they can replace you, why haven't they already done so? Jun 14

Sylvie A. Martlew, M.Phil. (Oxon.) wrote:
I'm not sure if they would be willing to lose me as a supplier. I guess refusing the discount would be a gamble.

Let's think about this logically.

You already do a great deal of work for this client. If they get rid of you without a "replacement" who is willing to work for less, it's going to leave a significant hole in their capacity for your pair/speciality. That means reduced revenue for them, as well as potential for damage to their client relationships. This is an undesirable outcome for the agency, agreed?

The question that naturally arises is this: if they already have a replacement who is willing to work for less, why have they not already switched to this replacement?

To put it another way, if they had somebody who they thought could do your job for a lower rate and with the same quality and reliability, they would already have begun giving that person your work. Agreed?

Question: have you seen the amount of work you get from this company tail off sharply over the past few months or weeks in a way that cannot be attributed to the usual ebb and flow of business?

If you have NOT seen such a reduction in flows, it follows that your "replacement" does not exist. If a company has an opportunity to procure the same service or good at a lower cost then it will take that opportunity. Reasonable assumption?

Stand your ground. Respond with something like "Over the past 12 months we have worked together to successfully complete X projects consisting of X thousand words and X thousand euros, with excellent quality and reliability. I look forward to continuing to contribute to your business, but I would be unable to do that at a lower rate and frankly it would result in my allocating more time and capacity to your competitors." (When you mention the monetary value, mention a figure that is double the income you actually received to get a rough estimate of what they charged their client.)

As others have commented, if you do give in on this there will be another demand in the near future, because they know you will cave. It you reject their demand, there is no guarantee that this will not affect your relationship, but if you accept a rate cut you will start spiralling downward and you will never retrieve the situation.

I was in a similar situation a few weeks ago. I had requested a meeting with a client and ended up sitting in a room with six project managers. As part of a wider and useful discussion on the industry (followed by a rather good lunch), one of them suggested that I cut my rates. I told them that I charge them less than most of my other clients (true) and gently hinted that, if it were not for the favorable exchange rate, I would already be thinking of raising rates in the near future (also true). That put an end to any talk of lower rates. It has not affected my relationship in the slightest.

One slight concern I have is that no client has ever tried to impose on me a specific and arbitrary rate cut of X%. That this client has taken that approach to you raises a slight question mark about their business model. Regardless of what I wrote above, if they are deliberately taking on more price-sensitive customers, then they may have to move downmarket in terms of the translators with whom they deal.

I am also a little concerned that this client is already right at the bottom end of your range of acceptable rates. That suggests that there may be a bit of a mismatch between what you supply and what they want. You can't sell a Mercedes (your service) to somebody looking for a second-hand budget car. If they are a good customer in other aspects, by all means try to keep them, but I would look to acquire some new clients as well.

Finally, provided that their behavior is professional, don't get upset with the agency. Successful companies are always probing their suppliers and trying to get discounts or push down their costs. It is just what they do. It is nothing personal. [Edit: Apologies, I am not suggesting you are upset; your post is quite measured in tone.]

Regards,
Dan




[Edited at 2017-06-14 07:46 GMT]


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Jenny Forbes  Identity Verified
Local time: 18:55
Member (2006)
French to English
+ ...
Good business sense Jun 14

I agree with the other respondents here - don't accept this rate reduction, which is what their proposed "discount" actually is.
Be polite but FIRM.
My response to such requests for rate reductions etc. is along the lines of "I'm sure you'll understand that it would not make good business sense for me to work for you at a reduced rate while having to turn down offers from other clients at my normal rate".
Also, it's not a bad idea to show them they're not your only hope!
Do let us know what happens and good luck.


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David GAY  Identity Verified
Member (2014)
English to French
+ ...
Change your priorities Jun 14

Sylvie A. Martlew, M.Phil. (Oxon.) wrote:
I am already giving this company a great deal of privileges as is: they pay my absolute minimum rate of EUR 0.08 per source word; They even get priority over other clients when I am almost fully booked, which happens often.

I'm sure you can find clients who pay more


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Chris S  Identity Verified
United Kingdom
Swedish to English
+ ...
+1 for what Dan said Jun 14

You were never going to get people saying "Yes, you need to give them their discount and count yourself lucky" on a forum like this... but I would add that it's not quite as straightforward as some would make out.

When the large water-crossing feline took over our biggest customer around the time of the dot.com crash and immediately demanded a 5% profit contribution or some such, naturally we told them where to go.

Work tailed off fast. We went from sales of something like £35,000 one year to £300 the next!

Now this may not have been specifically because we turned down their oh-so-reasonable request (we were also charging premium prices for a premium service that was no longer required), but it probably played a role. The good news is that we plugged the gap pretty quickly and easily, as customers tend to come and go all the time.

So while I would tell them what you told us here and politely refuse the discount, I would firmly cross my fingers and toes. While hunting down some better-paying customers.

I would also say that you're indulging them far too much as it is. I have my customers well trained. They know I don't do discounts/unpaid overtime etc, so they don't ask for them.

One final thought: Your figures suggest that you've made EUR 50,000+ in the first half of this year by translating 600,000+ words. If so, you could definitely afford to lose them and could probably also do with a break!!


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Philippe Etienne  Identity Verified
Spain
Local time: 19:55
Member
English to French
Bam Jun 14

Tomás Cano Binder, CT wrote:
... explaining that I work for other agencies and how unfair it would be to them that I offer you (the requesting agency) even more advantages in rate or volume discounts. Most vendor managers understand this point of view.

Same stance with prospective agency customers who request lower base rates during the negociation phase, without anything in return.

Of course you can't offer the same service at different prices without offering a competitive advantage to the customer you charge less.
The customer you charge less will (may) charge their customers less, will get the customers of the customer you charge more - why pay more for the same service -, the customer you charge more, the one you're happy with, who trusts you and who's always been trustworthy, will lose business and disappear, and the customer you charge less will remain in business.
How smart, fair and thoughtful of people used to caving in.

I lost an agency customer accounting for maybe 40% of my business in 2006 because they thought they were the ones who knew when to increase my rates. I must say that at that time, I didn't mind losing business because I worked far too much.
A period of uncertainty opens, but it's quickly closed because you have more time for marketing activities and reorganising your customer base.

Philippe

[Edited at 2017-06-14 08:11 GMT]


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