How to deal with ‘low-ballers’

For freelancers and small to medium-sized enterprises (SMEs), the challenge of encountering persistent low-ball offers from clients seeking to drive down costs is a familiar and highly frustrating experience!

But what is low-balling we hear you ask?

Investopedia defines it as: “..a slang term for an offer that is significantly below the seller’s asking price, or a quote that is deliberately lower than the price the seller intends to charge.

Dealing with clients who’re "low-ballers" requires a well-crafted strategy that balances the need to secure fair compensation with maintaining professional integrity and fostering healthy client relationships. This is how we find it works best:

1.     Establish Your Value:

Before entering negotiations, it's essential to have a clear understanding of the value you bring to the table. Clearly articulate the expertise, experience, and quality of your services. This foundational step sets the stage for asserting your worth and demonstrating why your rates are justified.

2.     Set Clear Pricing Policies:

Develop transparent pricing policies that outline your rates and the factors that influence them. When clients see that your pricing is based on well-defined criteria, they're less likely to attempt to negotiate unreasonably low rates. Transparency also fosters trust and confidence in your professionalism.

3.     Educate Clients:

Often, clients may not fully comprehend the scope and intricacies of the services you provide. Take the time to educate them about the process, the resources involved, and the value they'll gain from your work. When clients understand the effort required for quality results, they're more likely to respect your pricing.

4.     Respond with Professionalism:

When confronted with a low-ball offer, maintain a composed and professional demeanour. Respond politely, expressing gratitude for the opportunity while explaining that your rates are reflective of the quality, knowledge, skill, network and expertise you offer. Avoid engaging in confrontational or emotional exchanges as this can be bad for you both!

5.     Focus on Value:

Shift the conversation away from price and toward the value you can provide. Emphasise the positive outcomes, benefits, and solutions your services bring to the client's needs. By highlighting value, you reframe the negotiation from a cost-centric approach to a results-driven perspective.

6.     Be Willing to Walk Away (this is important!):

While it's important to be open to negotiation, establish a threshold beyond which the offer becomes unacceptable. If a potential client persistently pushes for rates far below market level, it might be necessary to politely decline the project and any future ones. Walking away preserves your integrity and prevents undervaluing your skills which can quickly spread amongst a small community.

7.     Offer Alternatives:

If a client's budget constraints are genuine, consider offering scaled-down versions of your services or proposing phased projects. This demonstrates flexibility while maintaining your pricing integrity.

8.     Cultivate Referrals and Repeat Business:

Building a strong network of satisfied clients who value your work can lead to referrals and repeat business. Clients who appreciate the quality of your services are more likely to accept your rates without attempting to drive them down.

In sum, dealing with low-ball offers requires a blend of assertiveness, professionalism, and effective communication. Freelancers and SMEs must stand firm in communicating their value, setting clear boundaries, and focusing on the benefits they provide. By following these strategies, businesses can navigate negotiations confidently, ultimately securing fair compensation while fostering lasting client relationships built on mutual respect.