Help! I was asked to discount my rate and I need the work. What do I do?

Q: Could you please give some advice on how to deal with the pressure to lower rates? This is an issue that I have been faced with just recently. An agency with whom I was working regularly for almost 4 years asked me out of the blue to lower my standard rates by almost 25%. I declined the proposition. Instead, I offered the possibility of a volume discount if a project exceeds a certain number of words. As a result, the agency has cut me out completely and I am not receiving any work from them since months. This did hurt my budget as they made up almost 1/4 of my total income. Nevertheless, I feel that I did the right thing by disagreeing to lower the rates that were already rather on the low end.

– Anonymous

A: Great question and I think it’s one that’s on many of our minds as freelancers. I know I’ve received similar requests to lower my rate over the course of my career and I know we are not alone! I’d love to have seen the actual e-mail, but without it I’ll just assume it was something like “in order to remain competitive with your colleagues, we need you to reduce your rate by 25%” and that’s about it (that’s usually the way it’s been worded to me).

First, I think your offer of a volume discount shows that you’re trying to work with them somewhat and that’s great, but it can be a bit of a slippery slope. You mention it’s been a few months and I’m assuming they did not technically “fire” you but rather you just saw a dramatic decrease in work offers. I’m really sorry to hear that, and I empathize with you on this front as well, as it has happened to me.

Agencies will often do this when they 1) get downward pressure from their own clients (who are essentially doing the same thing to the agency in some form of “hey your competitor is offering us X, can you match or beat it?”) and/or 2) they feel that they are in a position of power and that perhaps their translators might be more numerous than the jobs they have available. This allows them to increase their profit margin somewhat and might offset the decline in work, if there is one. To be honest, from my contacts, it’s usually No. 1 that’s the general root of this.

Now let’s talk about some actions you can take now and in the future. The short version is you made the right decision by not accepting a blanket reduction in your rate as this too would result in a decrease in your income but while still doing the same amount of work, which is definitely not the best direction for us as business owners. However, I think that there were some more options you might have missed at the time, but the great news is that it’s not too late!

When this happens, and the client is a significant portion of your income, it can sting to just decline and lose the client, but you don’t have to choose between decreasing your rate forever and losing the client. One option is to tell them that you’re willing to accept a slightly lower rate (perhaps something between your rate and their request) on a case-by-case basis. When doing this, it’s important to be extremely clear that you’re offering a discount but not changing your rate. The reason this part is so important is because once you do the next step, you can go back and let them know that discount is no longer valid, thereby returning to your original rate. This will allow you to at least mitigate the damage to your income in the short term.

Next, you need to replace this client. If you haven’t already done so, make sure you have a solid brand and branding strategy. Make sure you are EVERYWHERE online, and I do mean EVERYWHERE. Engage in both inbound marketing and outbound marketing strategies. If you have other clients that are a smaller percentage of your income, reach out to them and let them know that you’d like a closer relationship with them (this alone might result in more work, or they might inform you that if only you had a certain CAT tool, they’d be inundating you with work).

Since it has been months, I would STILL reach out to any project managers you worked closely with and say something like:

“Hi [name], it looks like it has been some time since we’ve worked together and I have some upcoming availability starting next week [or tomorrow/whenever] so please feel free to contact me if you have any [source language] > [target language] projects as I’d be happy to take them on!”

This might result in a simple “oh that’s great” or “we’ll let our team know” or it might result in “thanks for contacting us but it looks like you’re out of our budget since you declined the rate decrease,” which will set you up for the opportunity to work for them at a slightly reduced rate on a case-by-case discount basis and not a permanent basis if that’s something you want to do. If you’d prefer not to offer them a discount in the short term, you could say something like “No problem. Feel free to reach out if you have a project budget that can accommodate my rate.” This continues to show your willingness to work with them, without compromising your business.

Here are some other resources to help you:

Need More Work? It’s Not Them, It’s You… and That’s the Best News You’ve Heard All Day

Success by Rx members: How to Win at Negotiation Course

Readers — what are your thoughts? How do you handle this?

Best of luck and hang in there!

Jenae

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