A customer gives a very low counteroffer for my service, how should I react?


1

I resigned from my former job and begin to prepare my international trade business. Since it probably will take me a lot of time before I make a profit, I also provide language interpretation/translation service. People from time to time calls me or email me to ask my rate. After I told them my rate, most of them didn't contact me any more. One customer gave me a counteroffer but I thought it was too low, so I didn't accept it. So far I ended up with zero revenue for more than one month after I left my job.This time a customer contacted me and he gave me his counteroffer which was much lower than the previous counteroffer. I feel outraged.I think it is a shame to accept such a low price, but if I don't accept it, I won't have any revenue. I am under huge financial pressure and I need to make some money to alleviate it. I feel my peers or friends will look down upon me if I accept such a low offer. What should I react now? I feel so ambivalent about it. I don't want to sell me short, but it seems that I have to. Please suggest

Sales Strategy

asked Aug 12 '10 at 16:13
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Steven
1 point
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5 Answers


4

As I see it, you have two problems:

  1. Your rates may be higher than the market can stand. In which case, you will have to either cut your rates or find some reason which will make people want to pay more - such as translation of technical documents in a particular field.
  2. You need to take a contract at a lower rate than normal for cash flow reasons, but wouldn't want to take any more contracts at the lower rate.

The second problem can be addressed by finding a reason why this particular contract is unique and you are therefore prepared to discount your normal rate. e.g.

  • We're having a special August sale on translations...
  • We have a special introductory rate for a customer's first translation so that they can see how good we really are.
  • I've always wanted to improve my knowledge of the names of lawnmower parts, so I can give you a special discount rate for translating your lawnmower manual from English into Swahili.
  • As you are the first customer from the city of Timbuktu, we can give you a special discount on your first translation so you can spread the word about us.
  • We're evaluating a new employee and if you don't mind us using your translation as a test piece from him, we can give you the rate you are asking for. Of course, we will ensure that the translation is up to our usual excellent standards.

The idea is that the client should know that they are getting a bargain, that they shouldn't expect to pay the same rate for future work, and that if they refer you to someone else they shouldn't expect to get the same discounted rate.

answered Aug 13 '10 at 08:12
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Mike
946 points

1

I resigned from my former job and
begin to prepare my international
trade business.

As you obviously are clueless in business items, I suggest you give up any delusion of making money as entrepeneur and start seeking a job again.

Seriously.

You are badly prepared, don't have the necessary funds to even survive a month and your atempts to work as independant translator so far have yielded zero (!) revenue.

It is pretty obvious you have a significant delusion about your position - you should not evn TRY to get into international trade business, as you totally luck any funds to do so.

Once you get a job again, try getting a clue about how your business will operate. This is called a business plan. Make sure it is RIGHT, then get the means to execute it (funds), by saving or other means.

Then, prepare for your business IN YOUR SPARE TIME, an only switch over when it is feasible. under hardly any case should you "prepare" after leaving your job - you should EXECUTE.

I iwll give you a different point here. For the last year and a half I have been going into a trade business of a totally different kind. We encountered many difficulties... now, half a year later than originally envisions we slowly seem to start. In all this time, my cash flow was UNCHANGED (!) from my "prior position" as the prior position did not change. I am under NO additional financial stress to get that going. Now guess who has a better chance to succeed? ;) It is about preparation. I fully knew that things may take longer.

answered Aug 12 '10 at 19:23
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Net Tecture
11 points
  • I agree. user2433, you should prepare before you try it again, meanwhile, since you state you are under huge financial pressure, take it (if you thing you can negotiate, try to raise the price a bit). Don't see this as a defeat but as a lesson. There's not a single entrepreneur I know that had not abandoned some projects (on different stages, though). – Fernando Martins 8 years ago

1

We are a translation agency and we have a pretty good idea about the market prices. But they range from 1 cents a word to 30 cents a word. So, as you can see, it's a wide range :-)

It really depends on your experience and field of knowledge.

Are you a certified translator?
Have you worked in that field?

answered Sep 25 '10 at 01:26
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Remy
111 points

0

The prospect who makes a lowball counteroffer is at least giving you a chance to negotiate. Those who didn't call you back haven't given you this chance. You should feel lucky you've gotten the offer.

  1. You must know the market in which you are operating. Are you asking for a price that is higher than the market? If so, unless you have unique skills you will have a hard time getting any sales.
  2. If you are not differentiating your service but you are asking for above-market rates, you flag yourself as clueless to your prospects who are going to shop around and so they will know what the going rate is.
  3. If you are asking a reasonable rate, ask them to explain their position -- why are they offering such a low rate? If they are just cheapskates, you should decline. Working with cheapskates is difficult on many levels, not just the low rate.
  4. If they have some reason for requesting a lower rate, work with them to find some common ground where you can both "win". You are new in business, you need more customers. As another answer said, make it clear that you are not permanently lowering your rate, but you are willing to trade a lower rate for: a testimonial, referrals, a longer term job for them (at your normal rate or at least a smaller discount on your normal rate), better payment terms (i.e. they promise to pay at completion of the job instead of +30d or whatever is customary for your industry).
answered Sep 26 '10 at 09:45
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Bstpierre
422 points

0

You have to ask yourself the following questions:

  • Will I be able to survive on the income generated by the low counteroffers?
  • Are the customers likely to talk to eachother? If they are then going very low in the beginning, means that you have to struggle to get a higher price in the future. If the customers are not likely to talk to eachother, then you can take whatever price you would like.
  • If you are under huge financial pressure, who then cares about what your friends might think? I believe that in general people worry too much about what their friends might think. I believe that not caring about this is the essence of being an entrepreneur.

You also have to realize that if the customers do not know you and you do not have a brand, they are less likely to pay a high price. You could say that the price is X on the first task, but X + 30% on the second.

answered Aug 12 '10 at 18:55
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David
1,567 points

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