A recent interaction with a client got me thinking about how doing something that seems like helping a client can later come back to hurt your business. Here’s the situation:
We’ve worked for a few years with this client. Let’s call them Client A. We were connected to Client A through another client and built a site for Client A’s former employer. Client A then went out on their own to start a new company. We built that site, too.
Because we liked Client A, we gave them a bit of a break on price, especially as they were a new business. That price break cost us some, but we figured it was worth maintaining the relationship and helping a new business get off the ground.
Once that business was up and running, Client A started another. We built this website as well. This time, the client had an even smaller budget than before, and though we wouldn’t take a site with a budget this small from a new prospect, we took this one in order to maintain the relationship and because we like Client A.
Again, the decision cost us, and the last few legs of the project were rocky because the client wanted more than the budget allowed, but we eventually launched a good site for them.
In the last few weeks, the client asked us to give a quote on a new project. We decided that we couldn’t keep giving big discounts on work for this client, because we’d done it twice already and because we’re too busy to handle that right now. So we quoted the project at our standard rates.
Client A wasn’t very happy about this price and is now using another web developer for that project. It’s possible that we’ve lost them as a client altogether, which wasn’t our goal.
And here’s the unusual thing: The problem isn’t with the client. It’s with us.
By giving those price breaks and not telling the client about them, we trained the client to expect our services at a certain price. Rather than giving this client out standard price, we tried to “help them out” and reduced our prices. When the most recent quote came in so much higher, of course Client A was surprised! That’s what we’d trained them to expect and they probably had no context to understand why the price had been raised so much.
So, by trying to help and cutting our rates in a few instances, we caused a long-term problem, may have lost a client, and have left the client feeling badly towards us. Pretty far from our original goal of trying to maintain a relationship and help a new business get a solid start, huh?
Bottom line? Giving “hidden” discounts and cutting prices to meet the client’s budget rather than charging what the project actually costs is a bad strategy for the long-term. It’s tempting to do, but as 3000K matures we’re not going to do it.
Unfortunately, we had to learn that lesson in a way that may have damaged a good client relationship. I hope that’s not the case, but perhaps it’s the price of learning and maturing. And it’s too bad.