The Issue With Cutting Your Fees

This week on our group coaching call, one of my clients asked the question: 

"I'm going into a meeting with a client this afternoon and I know he is going to ask me to cut my fees - what should I do?".....

.....who else has been in a similar situation here?? 

Off the back of this question, we had a great discussion with the whole coaching group as this is an incredibly common occurrence in our industry. 

Everyone left the call with a lot to think about!

Here is a summary of the main issues with you cutting your fees:

1) Lost Opportunity Cost

Before you agree to drop your fees or your project costs and do the project for love and no profit margin at all.....

Ask yourself - "What’s my lost opportunity cost here?"

Meaning, if I say yes and do this project for cheap and take up my time and my teams time on a project that's not going to make any money at all - what else could I or my team be working on that could actually make more money or create a better opportunity? 

Ask yourself - "What could be a better use of mine or my teams time?" 

2) You'll Resent Your Client 

Think about it for yourself. 

The last time you agreed to drop your fees, how did you feel about your client?

Were you ecstatic that you agreed to work on a project for cheap? Or did you find yourself resenting your client the whole way through the project and looking for any way to charge a variation and 'get one back on them'?

Agreeing to cut your fees at the start of the project just kicks the project off on the wrong foot and does no good for the long term relationship with your client. 

3) Talk About The Value 

If your client is asking you to cut your fees - then you need to ask yourself how and where did you not communicate well enough the value that you and your team will bring to the project? 

If the conversation with your client is all about you reducing your fees, then you've missed the mark in selling the value. 

As best you can, bring the conversation back to the value you add, the expertise you bring and the money and time you can save them through your proven track record and skillset on these types of projects.

Once your client can see and understand the value you and your team can bring to the project - cutting your fees gets taken off the table. 

Let me know how you go with the above, and as always, feel free to reach out with any questions.

Josh 'Keep Your Fees High' Stone

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