The price conscious client will come in many forms; some are motivated by getting the best deal, some are restricted by their available budget, and others are motivated by a lack of knowledge, meaning that the only factor that they can evaluate value is with price.
The price conscious client will have at least one of the following characteristics:
- Uses price as the main factor in their purchasing decision: This is a characteristic that can cause problems with the project, as to win the work, you may have to push your prices so low that the scope you have to make profit doesn't cover anywhere near what your time is worth. Being self employed, you aren't covered by any minimum wage laws, hence you have to be careful not to quote so low that you end up working for less than you would earn flipping burgers at one of those fast food chains we all know of! You also need to factor in the overhead you spend on the client in terms of time; a client who requires more time to communicate with will mean more time spent on the project, even though it is not more time spent on the actual technical production you are being hired to deliver
- Uses tough negotiation tactics to drive down costs: People who have this quality indicate a good level of business acumen and as a result should know what realistic costs for their requirements are. Their tough negotiation tactics could be motivated by a lack of technical knowledge or simply to get the best deal. Either way, this can lead to difficulties in the project if you allow them to negotiate you beyond a point that is realistic. Not only will likely have to cut corners to remain profitable, but the client's tough negotiation tactics will likely force you to complete any specification agreement to the word, making it likely that you will work for far below what your time is worth and possibly make a loss
- Expects the same quality output as more expensive solutions: A clear indication that the client will be difficult to work with because they either don't have a realistic expectation of what can be achieved, or that they have no intention of working in a relationship that is mutually beneficial. This becomes part of a toxic combination when the client also uses pricing as the main factor for their purchasing decisions. There are a number of factors that lead to this expectation, such as a lack of technical understanding and the client having already compared their requirements to other more expensive options in the market
- May compromise on quality to lower costs: This is certainly an indication that the client is at least realistic.. The compromise on the quality accepted may come after some tough negotiation or it could be offered upfront, the latter certainly being an indication of a client who has realistic expectations of what is achievable and who could be good to work with. To protect yourself against future disputes with clients who turn difficult, it's important that you have any agreement on compromising the quality of the end solution documented in writing
Price conscious clients should be considered very carefully, as the budget expectations for the project can lead to problems that affect how you can achieve a successful completion, keep the client happy and earn a decent living. The key to success in the project lies in the following:
- Information: Make sure that the client understands the full details of what you are offering with your service to meet their requirements. They must understand that solutions provided by cheaper service providers may not offer all of the features, quality and experience you offer, so providing them with the information they need to make a fair comparison will help to avoid you being undercut by someone looking to cut corners.
- Negotiation: If the client is pushing you to lower your prices, you can offer to drop non-critical elements of your service in return for a lower price. This is a useful tactic to use because it allows the client to win in their price negotiation without compromising your profitability; therefore allowing you to maintain a standard of quality that will ultimately satisfy the client. Good negotiations result in solutions that satisfy all parties involved.
- Education: Making sure that the client understands the basics of the technicalities that your service offers is important, as it will save you from dealing with unnecessary phone calls and e-mails that damage your productivity. Educating your clients also helps them to understand the real value of what you are offering.
- Tools: Development and/or purchase of resources to help you become more efficient in providing your service and delivery of customer support and project management can lead to you providing a better service at a lower price without compromising your profitability. This type of resource is ideal for winning and successfully completing work for the price conscious client.
- Productization: As an extension of the previous mentioned tools, you can look into developing products based around the services you offer. This is especially good for selling to clients who are price or time-restricted, as it allows you to provide ready-made solutions at a fixed price without the need for unpredictable time investment. Your hourly rates can then be added to any standard product price for further modifications and enhancements required by the client. Good examples of productizing a service are website templates for website design and template contracts for legal support services.
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