[Q&A] Should Referred Clients Pay Full?

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Today’s question comes from a Millo Mastermind member, Tamra.

She says. “If you’ve given a discount to a client before, and then they refer someone to you, how do you charge the referred client a fair price since they probably talked to the person you originally worked with, and that person told them what they paid?”

Key Takeaways from this Episode:


  • Don’t volunteer the information that you gave a discount to the first client. If the referred client asks about the first client’s price, simply say that your prices are based on the specific project and client’s needs.
  • Consider the circumstances of the first discount. Was it a one-time promotion? Did the first client need to work with you quickly? Was the first client a long-time customer? These factors may affect whether you give the same discount to the referred client.
  • Be clear about your pricing policy. Let both clients know your regular pricing upfront, so there are no surprises later. You can also offer a referral bonus to the first client if they bring you new business.

Episode Transcript

This transcript was auto-generated and may have grammatical errors.

00:05.22
Preston Lee
All right today’s question comes from Tamara, she says if you’re given if you’ve given someone a discount before a client a discount before and then they refer someone to you? How do you charge. Referred client a fair price since they probably talked to the person you originally worked with and that person told them what they paid so this is I have a lot of thoughts about this question Clay I’m sure you do too. We’re gonna be right back after this quick message from our sponsors and we’re gonna hopefully answer um taras. Question as well. We can. We’ll be right back all right clay what comes to mind if you if you have a client ah who you’ve given a discount to that client then refers someone to you should you be giving them the discount as well. Should you.

00:53.71
Clay Mosley
Um, I mean there so I wish I had some more context behind this like how long ago did the first client sign up and all that you know because I I think about I think about like my first website clients that I only charged $500 for but

00:53.82
Preston Lee
Ah, drive said it all like what should happen.

00:59.61
Preston Lee
Yeah.

01:10.67
Clay Mosley
You know if I were to do website today. Be you know 10 $12000 or more um I would never go back and be like or if a client said well you only georges person $500 I would be like bro not like yeah um I don’t know my initial.

01:13.92
Preston Lee
So yeah.

01:20.29
Preston Lee
Ah, like fifteen years ago so

01:27.94
Clay Mosley
Reaction here is just to the response say well this is my current fee. You know I don’t know I What are your thoughts because that’s my response.

01:32.60
Preston Lee
So yeah. Yeah I think I think that was my initial thought to was just to say like well first of all I wouldn’t I wouldn’t bring it up right? like I yeah.

01:44.44
Clay Mosley
Right? Don’t don’t volunteer the information.

01:50.37
Preston Lee
Yeah, So first of all, don’t say like hey I know I only charged your friend you know this much but I’m going to have to charge you more like don’t do any of that. That’s just foolishness but I assuming that you’ve got at least that sort of street smarts to not do that I’d say if they bring it up. Yeah, you say like yeah we were running we were running a special. Ah but we have so much work now and so many clients now we’re just we’re charging our regular fees now. Um, you know if if time doesn’t matter to you if deadlines.

02:16.54
Clay Mosley
The.

02:21.97
Preston Lee
You know aren’t aren’t an issue for your project I Could let you know next time we run a special like that. But we only do it every few years. Um, and then they’ll probably just say like no, it’s fine. You know I’m ready to move forward with the project now. But.

02:32.20
Clay Mosley
Yeah, it could also be like you know again, Context Context would be great but it could also be you could also respond and say well every project’s different. Every client’s different. You know, um you could do that.

02:41.89
Preston Lee
Yeah, yep.

02:48.39
Clay Mosley
Um, yeah I don’t know much else to say about it other than just those what we’ve already mentioned.

02:55.19
Preston Lee
So I want to add a question then so if if there’s a client who you gave a discount to let’s say you gave a client a discount. You’re not on a recurring basis with them. Maybe you take a year off and they come back to you I’ve had this happen right? and and they want a discount again on their next thing.

03:14.76
Clay Mosley
Ah.

03:14.82
Preston Lee
Um, have you ever had that happen have you had a client come back and say like well you only charged me five hundred bucks last time. Why are you trying to charge me $1000 this time.

03:20.11
Clay Mosley
Yeah I usually grandfather them in that’s what I do Yeah I never I have and I’m not saying this is the only way to do it I’m just saying this is the way I’ve done it in the past like whatever.

03:24.99
Preston Lee
Yeah, so you just keep them at this whatever price you did previously.

03:39.51
Clay Mosley
Whatever I charged a client. Um, well let me take this back. You’re talking about a project right? Not not a subscription.

03:46.65
Preston Lee
Yeah, this is more like a one off. Yeah, they call you up. They need a project done. So.

03:52.79
Clay Mosley
Okay, um, no projects I do at the current rate. But I always make sure that they know again expectations that project work is where you know where you charge a single fee um is always done at the.

03:55.10
Preston Lee
So okay.

04:10.39
Clay Mosley
The current real time rate. Um, but all of my subscription clients I have never increased their fee even though I might increase my fee for new clients.

04:10.83
Preston Lee
Yeah, yeah.

04:23.93
Preston Lee
Actually love that because that’s further incentive for people to sign on sooner. Um, we we do that with our subscription as well. Like once you sign up your your fee will never change your monthly cost will never change. Um, it just feels like the right thing to do honestly you reward people for signing up earlier.

04:28.31
Clay Mosley
Um, yeah, yeah.

04:38.45
Clay Mosley
I think it is yeah I think it is yeah no shit I dude I remember my first son in Netflix was like $7 a month and that’s what $18 or something. Um, yeah, but yeah, it’s that’s just.

04:41.47
Preston Lee
Talking to you Netflix calling you out.

04:49.14
Preston Lee
Yep I don’t even know yeah too much.

04:56.23
Clay Mosley
Yeah, that’s how I do business. It’s not to say that it’s the right way or the wrong way. Um, but project work. You know it I I think about it as if you know if a client signed up with to do a project with me five years ago and then they come back today i.

05:15.15
Preston Lee
Yeah, yeah, most definitely and they shouldn’t they shouldn’t expect that over that long of ah of period I’ve had clients who it’s like I we do a project I bill them maybe 6 to 12 months they’re back and they want the same rate and.

05:15.32
Clay Mosley
I wouldn’t charge the same right? So same same thing.

05:26.94
Clay Mosley
H.

05:31.24
Preston Lee
And I don’t want to do it for discounted or I don’t want to do it at the lower rate that I had previously. Maybe I gave them a discount because at the time I was like more hungry needed more work in the door. Um, they’ll they’ll come back and then I’m I’m in higher Demand I’m not as hungry I’m not as in need of work and so I’ll say sorry the rate is this and they’ll say but last time we did it for this much.

05:40.89
Clay Mosley
Um, yeah.

05:50.29
Preston Lee
Sometimes depending on the client depending on the situation. Sometimes I’ll say I see that we did that last time I’ll tell you what we can do with that price one one more time. But after this one just so you know the price is you know right? We’re going to have to do it at the current price right now that’s data. It could be different six months from now and just really lay it out in.

06:03.80
Clay Mosley
Ah.

06:09.69
Preston Lee
With a lot of I think clarity is really the the key here to just make sure that everyone understands what’s going on.

06:13.40
Clay Mosley
Yeah, and you need to think about this too about the intent like why somebody came to you because if they came to you a year ago and it was discounted. Did they come to you for the discount because if you.

06:26.98
Preston Lee
Yeah, or because you did good work.

06:30.83
Clay Mosley
Yeah, yeah, and if they’re coming back to you are they coming back to you for the discount because the work was actually good and if the work was actually good. They should not have a problem paying a higher fee because they know they already know that the work is going to be good so they should be able to. They should be fine paying a premium.

06:35.46
Preston Lee
Yeah, yeah.

06:50.51
Clay Mosley
Um, but if they came to you because 100% because you were discounted and they got you for a cheap rate and and they come back and complain about you know the discount like they’re looking for a discount they they’re not looking for value. You know value work.

07:04.44
Preston Lee
Um, yeah, yeah, yeah, actually you could actually spin that around on them and say like you know how did the last project. Go. Do you feel like it was it was worthwhile when they say Yes, you’re like well. Charge full price for that kind of thing you know I was able to give you a discount before but we just I can’t do that again. Um, able to give you discount to kind of try out our services now that you know that they work and that you get quality product out of it here’s here’s what it costs I think there’s some options there So all right.

07:25.86
Clay Mosley
Here.

07:32.25
Clay Mosley
Um, yep for sure.

07:36.81
Preston Lee
Well hopefully um Tamra hopefully that’s been helpful. Ah, thanks so much for for writing in and thanks so much for your question Clay Mosley from gitripify.com and I’ve been Preston Leewimio Dot Co we will chat with you guys next time see ya.

07:49.70
Clay Mosley
See ah.

 

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Written by Preston Lee

Editor at Millo.co

Preston Lee is the founder of Millo where he and his team have been helping freelancers thrive for over a decade. His advice has been featured by Entrepreneur, Inc, Forbes, Adobe, and many more.

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