Client acquisition is always a challenging (and changing!) element of running a business or law practice. You must constantly toe the line of charging enough to fairly compensate for the level of work performed while also offering rates that are affordable to your target demographic.
For loyal and repeat clients, pricing should be fairly straight-forward after you have already built a relationship and set the right expectations. With new clients, however, you may be considering offering a special or agreeing to a discount they have requested to get them in the door. We will examine the pros and cons of client discounts in this week’s post.
The Pros of Client Discounts
1. A Competitive Edge
Offering new client discounts may give you a slight advantage over similar law firms in the area if the prospect is particularly price conscious. If you and your rival are neck and neck in the fight for this client, coming in at a lower cost may be what you need.
2. Easy Marketing Material
Running specials or discounts provides prime fodder for marketing campaigns because it makes a prospective client feel like they are getting something that others did not. It is also pretty simple to build a campaign around a feature that is added to your regular offerings. You can mail postcards, test an email marketing strategy, and reach a large audience via social media and paid advertising.
The Cons of Discounts
1. A Compromised Value
There is one glaring drawback of agreeing to discount your rates for a specific client and that is letting them set the expectations for the relationship. You are essentially telling them that they get to call the shots and that you agree that perhaps your prices are too high if you agree to the discount. This is hardly the perception we want our new clients to have of us. Even if you knock the case out of the ballpark, they may always feel that they have a “bargain attorney” and are less likely to become loyal clients.
2. Wrong Clientele
Another con of agreeing to discount your rate is that you will attract the lowest paying clients in the market. If they are seeking a lawyer based on cost alone, they clearly do not understand that not all attorneys are all-stars. They are willing to compromise quality for price, which does not bode well for their quality as a client.
3. Emotionally Challenging
Another risk of submitting to a plea for a discount is what can happen to you, the attorney, as a result. If you feel you are not being paid fairly for the work you are doing for your client, it can be easy to prioritize other cases. After all, those other clients accepted your normal rate! Just as your client’s perception of your value may diminish, it is also highly likely that your perception of them as a client will suffer, too.
Strategy is Paramount
Based on the advantages and disadvantages outlined above, we believe there is a happy medium. As a general rule, it is best to decline a prospective client a discount if they ask for it without your having planned to extend one. That said, creating an intentional and researched marketing campaign around a limited-time special can be done tactfully and effectively. One approach puts the client in the driver’s seat, whereas the other keeps you in control. It is up to you to decide where you want to meet your clients.