Design Discounts: Pros, Cons and Alternatives - RD113

Should you offer design discounts to your clients?

Let me start off by saying I'm not a fan of offering discounts for design services. And by the looks of it, I'm not alone. In preparing for episode 113 of the Resourceful Designer podcast, I read a lot of articles about the pros and cons of offering design discounts, and almost all of them said it was a bad idea. The main reason is that offering a discount lessens the perceived value of you, your services and the overall brand you are building for yourself.

By offering a discount people will start to view you as a discount designer. Once you've been given that label, it's hard to escape from it.

However, that's not to say you should never offer discounts to your clients. Here are six situations that may merit design discounts.

When to offer design discounts.

There are occasions when offering a discount can strengthen your perceived value and your brand.

1) Passing on a discount.

Passing a discount you receive from a supplier onto a client is a great way to build loyalty towards your business. This works great for things like registering domain names or website hosting. As well as physical things such as T-Shirts or print runs.

If your supplier is having a sale or is offering you a discount, think about passing the savings onto your clients. They'll appreciate you more for it.

2) Recurring revenue.

Anything that helps you earn recurring revenue is a good thing, including offering a discount. Offering a discount on items like monthly web maintenance packages or design retainers can be the deciding factor in signing up clients.

A monthly recurring maintenance package may be easier to sell if you offer either a free month or a monetary discount if the client pays for a full year in advance.

Discounts for early renewals are another great way to ensure your clients stick with you.

3) Larger Print orders.

This isn't a discount but it will save your clients money, and they'll appreciate you for it.

Whenever ordering printed material, you get better prices by ordering greater quantities. When a client requests a print job through you, ask them if they have anything else to be printed. Let them know that you can save them money if they increase their quantities.

For example; ordering 1000 business cards for a new employee may cost them $100. But if three other employees are running low on cards, and you combine their orders with the new one, the print job will cost $80 per 1000 cards. Your client will appreciate the money you are saving them.

4) Your client is a reseller.

Whenever you are working for a reseller/wholesaler, you should be offering a discount for your service. This will allow them to charge their client a similar price that you would have charged them directly.

Designing for a reseller/wholesaler usually means more and consistent work. Therefore the design discounts you offer are offset by the volume of work they are bringing in.

5) When the client merits it.

I know I said that I'm not a fan of offering design discounts. But sometimes the client does merit it. For example, I recently met with a new client to discuss an overall brand refresh for her business. The project will encompass many areas of her business including a new logo design. During my meeting with the client, I got a feel for who she is, what she stands for and the image she wants to portray to her clients. By the end of the meeting, I already had a very good idea of what her new logo should look like. Before leaving, she handed me a rough sketch she had drawn of the type of logo she thought would suit her business. To my surprise, it was very close to the vision I had in my head. I told her as much, and then I offered her a discount on the logo portion of the project. After all, I didn't feel right charging her my full rate for a logo design considering it would be very close to her idea.

6) When you feel like giving a discount.

This is the one time I agree that a design discount is in order. Discounts are fine as a special gift, not as an umbrella deal. Meaning, it's fine to offer a single client a discount for a special reason.

For example, a loyal client that brings you regular work asks you to design invitations for his daughter's wedding. You might consider offering him a discount as a form of thank you for the past and future work he sends your way.

When not to offer a discount.

There are certain times that may merit a design discount, but there are also occasions when you should not be offering a discount at all.

1) When a client asks for it.

Some clients will try to pressure you into giving them a discount. Don't be lured into this trap. Remember what I said about being perceived as a discount designer? That's precisely what will happen if you give into a client's demands.

Any client that threatens to seek design services elsewhere if you don't lower your price is not worth having as a client.

2) Additional design services.

This relates to designing something at your regular rate and then offering a discount to design additional items. Such as designing a logo and then offering a discount to design business cards.

There is no reason for you to offer any of your services at a discounted price. Once again it diminishes your perceived value and positions your business as a discount design service.

This scenario includes "design packages" where a client saves money by ordering packages of multiple items. Such as a stationery package that includes designing business cards, letterheads and envelopes.

3) Different rates for different services.

Not quite a design discount but some designers offer different rates depending on the service they are performing. For example; charging a higher rate for design services and a lower rate for page layout services. Your time is valuable regardless of the services you are performing. Remember, a client is hiring you, not the service.

Alternatives to design discounts.

Offering a design discount may sound like an easy way to build client loyalty, but in fact, it may be doing more harm than good.

Alternatives you could try include offering rewards or incentives for being a loyal client. Send a gift card to someone who referred a new client to you. Buy dinner or send flowers to a client after completing a large project with them.

Rewards and incentives will be remembered much more than a discount ever will. Clients will appreciate them more and will think highly of you for thinking of them.

Another option is to go above and beyond in your services. Clients will remember the little things you do for them, especially if they were unexpected. Such as hand-delivering a print order to make sure everything is ok with it.

Merely showing your appreciation towards a client is sometimes all they need.

Monetary discounts are quickly forgotten but doing something special will be remembered and appreciated.

Do you offer design discounts or do you have an alternative solution?

Let me know by leaving a comment for this episode.

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