FAQs: Do you know or even care what your competitors are charging?
February 1, 2011
I have gotten so many anonymous requests from vendors trying to find out our prices. In fact, I even had a fake couple come into my office with a make-believe wedding just so we would give them our proposal (I found this out later).
As we talk about budgets this week, I think it is extremely essential to have a general idea of your competitors’ pricing. I keep reading over and over in your comments that others are bidding you out for a lower price in order to fit the client’s budget.
I have managed to find out what a few of my peers are charging by…
- A client giving me someone else’s price and asking me to match that price or do better. (Not in the least bit cool.)
- More than a few freelancers working in my company who offered this information. (Mostly unrequested. Word of advice for all of you with employees, have them sign a confidentiality agreement.)
- I am friendly with a few folks in the industry and we simply exchanged this information.
By the way, for all those who are interested in knowing what my prices are, it’s simple. We try to make a 50% margin on every job we do. The same margin I suggest you all try to make.
If you have an idea of what your competitors are charging, you’ll be better prepared to explain your value to your potential clients.
I just wish that most clients understood the old saying, “You get what you pay for.” They are either going to get less for less or a gift from a vendor, when the vendor does not make their profit.
How would you deal with a potential client who gives you a competitor’s proposal and asks you to match it or do better if you want the job? Do you think it is important to find out what your competitors are charging and how do you go about doing it?