There will be times in your business where people will ask you to lower your price. This may be because they really want to work with you, but can’t “afford it” (though I would suggest that if they don’t have the money, they can’t afford NOT to work with you.) Sometimes, people will ask for a lower price because we are taught to always try and get the best deal possible.

As a service professional, it can be tempting to consider reducing our fee, thinking, after all, that some money is better than nothing. While this is easy to think, it’s the worst possible thing you can do for the long term growth and health of your business.

Someone asked me the other day to give my top reasons why you should never compete on price. I thought you would be interested in these, too:

Here are 7 reasons why you never want to compete on price:

1. Price buyers take up all your time. If you ever notice that the people who ask for a reduced price (and get it) often feel entitled to make more requests or demands. You gave in once, and you feel like you might have to keep giving more to keep them happy. Price buyers take up more space and time in your business than they bring you value.

2. They do all the complaining. I notice this a lot on television- not that I watch a lot of television, but when I do. It always seems like the people who are most price sensitive are the quickest to complain and find fault. It’s like nothing is ever good enough.

3. They tell your customers how little they paid you. They brag about it. If word gets out that you discount your services, it won’t be long before everyone is asking you do it. When this happens, you lose your positioning as a premium provider and become a commodity.

4. If their loyalty to you is only price, they are going to purchase from you once, which is the most expensive way of acquiring a client, then they are going to leave you for someone else. This is huge. People who compete on price are looking for cost savings- not value or to build a relationship. Without the relationship, there is no client loyalty.

5. They will acquire you at the lowest price and then try to blackmail you for a lower price yet. Similar to what I mentioned above, people are naturally wired to keep asking for favors and adjustments if they have been given in the past.

6. They will destroy the credibility of your price and service in the eyes of your clients. I also referenced this already- but this bears repeating. You can’t simultaneously have a fee structure and then constantly change it when people ask you to. If you ever adjust your prices, you should have a clear and well defined reason for doing so. It needs to make business sense.

7. They will steal your ideas, information, knowledge…anything they can get their hands on. People who don’t care about relationships don’t care about protecting your assets or intellectual property.

Does this mean you should never negotiate? No. But you need to negotiate from the proper mindset and context, one that focuses on creating and building the partnership or relationship, not turning it into a one-way street.

The next time someone asks you to adjust your price, just say Sorry. No.

Create More Value, Make More Money

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