This is perhaps the mother of all mistakes I made years ago. And, if I had written this same entry two years ago, I would have definitely advised you to NEVER lower your prices to get a job. However, because of the dire place of the economy in the past year, I have learned to have a different point of view on this matter.
Years ago when I first started, I kept lowering my prices to get a job. I did it over and over again, until I realized that I was actually losing money, not even breaking even. So here it is: if you find yourself in the position of lowering your prices to get a job and you are still able to make a profit –then BRAVO.
Here are different examples of common price structures:
1) Flat fee. If you charge a flat fee for your services and lower it, this could be a place you get hit hard. Most likely you have a hard time explaining the value of your services to your clients. Explore ways you can be more effective in your presentation and your sales pitch.
2) Charging by the hour for your services. Also another place you might get hit hard if you lower your fees. (Same reason as above.)
3) Mark-up system. This could be the most damaging one. If you lower your prices, either your product is going to suffer or you are going to make less profit and lose money.
4) Creating a package. This could be the least dangerous one if you manage to sell it properly.
I also think the economy’s downfall has created a mentality in me and most clients (really, the overall culture) where we’ve started believing that we actually DO NOT NEED TO PAY FULL PRICE FOR ANYTHING (I tried asking for a discount for a Gucci shirt at a store and they laughed at me).
Be wary of the following statements:
- “These are difficult times and I can get cheaper prices from your competitor.” (Most likely they are saying the same thing to your competitors.)
- “I want it to be beautiful, but I don’t want it to look like I am spending a lot of money.” (This is a reasonable request as long as they are paying for whatever they are getting.)
If you lower your prices to get a job, and you can actually do it without jeopardizing the quality of your work, go ahead. In my opinion I find that next to impossible so I strongly recommend against it.
What do you think? Let me know.
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George Bernard Shaw once said: “You see things and say, ‘Why?’ But I dream things that never were and say, ‘Why not?’” That quote embodies how Preston Bailey approaches every event.
Rosalba Fasan-Buffat
March 11, 2010
I used to do that too, and I found that I was getting a reputation that if you haggled me hard enough I would cave, I needed to fix that-quickly! Some people have mentioned that they can get flowers cheaper using so and so, I try to remind them that each florist sees their wedding differently and may be using a different combination and/or number of flowers as well as the quality of the bloom. It was hard but I have learned that I do a beautiful job, my customer service is one of the best and I take a lot of care with detail to each wedding. Something that couples that book with me mention-which makes me so happy!
Thank you for re-enforcing my thoughts Preston!
Janice Celeste
March 11, 2010
No, our prices are our prices. We may give added value by giving away something extra that won’t cost us too much, such as an extra album for the parents, etc.
We keep our video prices the same for celebrities as well as for the average bride and groom. Couples can actually create their own package with our company and spend as much or little as their budget allows. It gives them the control and there’s never an issue with the price.
martha Andrews
March 11, 2010
We all know you get what you pay for. Yes the economy is bad, but my quailty and creativity haven’t changed. There are always those who can afford to get what they want. I say hold out for that.
It is too frustrating to be at a job knowing you have given away to much, I would rather have the weekend off.
I also feel to keep my prices as they are puts me in a better position for when the economy recovers, how do you all of a sudden increase prices? You should be worth it at all times.
That said, I do a bang up job and always do more than I have benn asked to do! It’s what makes me worth it.
Kara Marie of Lavish Events
March 11, 2010
In these tough economic times, I do not LOWER my prices. However, if I have a potential client who is in dire need to work with me and can only afford “x” dollars (say $500 less then what I charge), I will more likely than not offer her that discounted pricing, BUT will disclude something from the package. You can’t get something for nothing. I’m not going to offer a client paying X amount the same as the client paying Y amount. I’ll strongly recommend to that client that they go with the regular package because that’d the best value and they’ll get the best service. However if they can only afford “X”, here’s what I’ll do…
Big fan!
Kara Marie
http://www.LavishEventsOnline.com
Tamiko Hargrove
March 11, 2010
I love this question and blog as I’ve learned the hard way as well. I do take the current state of the economy into consideration. However, some clients take advantage of this who are not really affected by the economy. We all have to eat and want to stay in business. I’ve learned to say “NO”. My prices are already reasonable and my customer service is beyond expectation! Sometimes the term “some business is better than none” is not accurate at all. Thanks for reiterating this fact so I don’t feel guilty or question myself if I’ve made the right decision!
Judy
March 11, 2010
I keep truly loving reading these blog posts. You are always reminding us of what we do, how to be valued for work we love doing! I have worked hard to create my brand and produce beautiful events and also get paid accordingly for it. I have turned away at least 10 weddings this season for price but still have more booked than even last season. So I belive it works………..saying NO is tough but it saves you time and money in the end. Thank you so much for talking about the issues………and keep it coming!
Chris Campbell
March 12, 2010
Every situation is different. Be smart, charge more to give more. Clients likes kindness, but don’t ever loose your quality,
no matter what. I don’t believe in you get is what you pay!!!! If you want me, you pay my price your good buy. I will never sign my name in something that looks more or less. It’s great, gorgeous, unique, fabulous, or it’s not me!
I agree with you, work for nothing? For what reason? My clients knows they are paying but they will get more, much more than their expectations!! That’s a blessing!!! Happy clients!!!
Chris Campbell
March 12, 2010
The more you give, the more they take, and in the end, they don’t respect you, your job, or your time!
To sell your talent ,creativity, and quality, BE PROFESSIONAL! They will respect you!
Donna Hoff
March 13, 2010
When people pay the appropriate price for services rendered, they more often appreciate and respect the creativity and the effort needed to create their soiree. This will eventually be reflected in how they feel about their experience. If they pay for cheap they may eventually feel like this is exactly what they got. Once you are feeling undervalued you will have a difficult time creating the right atmosphere for a truly dynamic event.
Gloria Brown
March 21, 2010
This is a very important topic for all forms of business. Thank you, Preston, for your recommendation.
I enjoyed reading everyone’s posts because I am jumping into the wedding industry very soon. Maine Platinum Weddings will be launched this coming May. I am nervous but it’s a good nervous! I’ve been a stay-at-home mom for 30 years (actually I semi-retired when my two son’s left the nest 10 yrs. ago). This is my first venture and I’m trying to learn everything possible from the best of the best designers. I have been following Preston’s work for a few years and I own all of his books.
I loved his creations for Mina Kaneda & Leroy Harris, Jr’s fabulous Texas wedding!
This post has been very helpful for me because I haven’t looked into a pricing format yet. I do not wish to charge on an hourly base. I prefer to offer a few packages and I do not want to undercut my competition because I feel it could hurt my business in the long run.
I feel that Donna Hoff’s post made perfect sense!
Good luck everyone and I hope you all have a great 2010 success!