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Amanda Winters
Nutrition and Style Consultant
NYC / Westchester, New York
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Should I Lower My Prices in this Recession?

I keep hearing how people are lowering their prices in order to survive in this recession. I just don't think this is the answer! Are your services or products worth less just because other people think theirs are?
Written Oct 08, 2009, read 2359 times since then.
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The more people I talk to, the more I hear how people are lowering their prices in order to survive in this recession. I just don't think this is the answer! Are your services or products worth less just because other people think theirs are? Take the lead and do what's right for YOUR business.

People say their businesses are in a "maintenance" phase, and lowering their prices has helped this. I say I'd rather maintain my worth and keep my prices fair all of the time. High prices don't make sense to me at any time, recession or no recession, and low prices mean cheapening yourself and the worth of your services and/or product(s). 

Fair prices also seem to push the uncertain out and the people who are ready to attain their goals in, and that's the way I like it! That means better services that I can provide and more loyal and successful clients. That's a "YAY!" for everyone! 

Would you rather have a larger quantity of clients, each at a lower price, or have few fewer clients, each at a higher price? There are many ways of thinking about it, and it really does depend on YOUR WANTS and NEEDS.

More clients/customers means a higher chance for word-of-mouth advertising. But it could also mean a lower quality of service if you are too busy with so many clients/customers or unhappy with having to work so many hours for the same amount of money you used to make with fewer clients/customers.

And what happens after the recession is over? Will you then raise your prices again to match what you used to charge? How will that look to clients? Or will you keep your prices low and never make the money you were hoping to earn by this time in your life. 

With so many options, how do you know what is right for you? There may not be an answer, and that's okay. Either way, you'll be okay. Each route will just take you on a different path, and I've always said, whatever happens is what is supposed to happen. Whatever decision you make is the one that your instincts are telling you to make. 

If you choose you have fewer clients/customers right now and keep your prices stable, you may not have as many clients/customers as you would hope for, but you can use this time as "opportunity time." You can use this time to seek new opportunities, to work on improving existing products and services, to really focus on your clients/customers. Just make sure you're comfortable, financially and emotionally, with making the same earnings or less than you were a couple years ago. You may be able to raise your prices in the near future, or attain more clients/customers, but for now, you need to be okay with the maintenance phase.

As I said earlier, there are many ways of looking at the situation and no one way is "right." The most important thing is to feel good about the prices that you set your services and products, during any financial time. Good luck!

Amanda Winters

Learn more about the author, Amanda Winters.

Comment on this article

  • integrative health care consultant, Reiki master 
New York, New York 
Pamela Miles
    Posted by Pamela Miles, New York, New York | Oct 08, 2009

    I agree with what you point to when you caution that lowering prices to get more clients, if successful, might lead to not having the time we like to spend with each client. It seems to be a matter of recognizing how we like to work and being willing to commit to that structure. The way we like to work is probably also the structure in which we work best, and the one that will lead to clients who are as grateful to have us as we are grateful to have them.

  • Nutrition and Style Consultant 
NYC / Westchester, New York 
Amanda Winters
    Posted by Amanda Winters, NYC / Westchester, New York | Oct 08, 2009

    Great point! Thanks for reading the post and commenting!

  • graphic designer 
Woodinville, Washington 
Brian Trendler
    Posted by Brian Trendler, Woodinville, Washington | Oct 08, 2009

    I've always thought that lowering one'd prices is a risky venture that rarely pays off. Often I'll have package rates/discounts for mixed services and offerings that are commonly viewed as "valuable" to the consumer versus my 'a la carte pricing.

    Another point is taking into consideration the value of one's own time when determining pricing. For example, my design work/effort/hours spent isn't effected by a recession or downturn. It remains the same. The focus needs to be on WHY one's prices are where they are, and what value does one bring to the table to justify the cost structure/pricing?

    Some more food for thought! Great article, btw! thank you!

    !~ B

  • Nutrition and Style Consultant 
NYC / Westchester, New York 
Amanda Winters
    Posted by Amanda Winters, NYC / Westchester, New York | Oct 09, 2009

    I have package rates/discounts as well, and have found this to be extremely valuable to my clients and potential clients. I agree that the prices should be determined by the amount of time and effort that goes into the work, but I also think it is determined by the TYPE of work done and the ORIGINALITY of the business as well. If you offer clients and customers something extra or different than others in your field, you are worth more. Don't you agree? You're very welcome! Glad you enjoyed! Amanda

  • Personal fitness trainer 
San Marcos, California 
Aaron Harris
    Posted by Aaron Harris, San Marcos, California | Oct 09, 2009

    I think the biggest concern for anyone lowering their rates/prices should be how it affects their current clients/customers. If you offer new clients a lower rate it would be only fair to offer that to existing customers which is not beneficial to your business since there is no guarantee that existing customers can or will use more of your services to make up for the reduced income from lowering your rates. What I have done is offer my services for a smaller period at a lower cost. Instead of paying a higher rate for one hour of my time I offer thirty minutes for a lower price but it works out to more than half of my normal hourly rate. That's one way of offering an affordable option without reducing the value of my service.

  • Nutrition and Style Consultant 
NYC / Westchester, New York 
Amanda Winters
    Posted by Amanda Winters, NYC / Westchester, New York | Oct 09, 2009

    I love your idea, Aaron! That could bring in much more business for so many people.

    I am also a huge believer that your past and present clients/customers are the foundation of your business and they deserve just as much, if not more, of your time and effort.

  • CPA, Accountant 
Irvine, California 
Shaun Lawrence
    Posted by Shaun Lawrence, Irvine, California | Oct 29, 2009

    This is a constant issue with my new business as I try to win new clients. Still unsure how to approach. Thanks for informative article. Shaun Lawrence, Huntington Beach CPA

  • Licensed Real Estate Broker 
Renton, Washington 
Anthony Giannette
    Posted by Anthony Giannette, Renton, Washington | Mar 24, 2010

    As a bookkeeper, I see a wide range of hourly schedules out there. Anything from $12.00 through $30 per hour.

    How much would you trust the work of a $12 bookkeeper?

    Pricing is also a function of responsibility level, ability to finish the work, and leftover headaches after the deadline. If a client sites problems in paying the invoices and wants a lower price, how much service is s/he willing to give up?

    Remember your responsibility to the community. Earning profits is part of you that is the cash flow of your neighbors.

  • Nutrition and Style Consultant 
NYC / Westchester, New York 
Amanda Winters
    Posted by Amanda Winters, NYC / Westchester, New York | Mar 24, 2010

    Thank you so much for your comment, Anthony! I completely agree with your point that lower prices don't always get viewed in a positive light. this is with regard to services and products offered. Take a pair of jeans. In the fashion world and with the masses of our youth, $12 jeans are definitely not as "cool" as expensive ones that are considered more luxurious and desired.

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