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Have you ever been frustrated or even offended when clients repeatedly ask you for a discount on your service or product?

Don’t worry. I’m not about to start a rant about why I should be paid more money than I already am. 

This is about PERCEIVED VALUE & whether you’re a service provider who is always asked to discount your service or a consumer who is always asking for a discount. 

I’d like to share a really quick conversation with you. 

It wasn’t my conversation but I found it interesting and it’s sure to highlight a great point or two I’ll bet many of you haven’t ever thought of or considered. 

A customer asked a contractor friend of mine how much it would cost to do this project. 

My friend gave a quote of $4500. Customer said: That’s seems really high. 

My friend asked: What do you think is reasonable for this job?  Customer said: $2500.

My friend said:  Ok, then I invite you to do it yourself.

Customer said: I don’t know how.

My friend said:  Alright, then how about for $2500 I’ll teach you how to. So besides saving you $2000, you’ll learn valuable skills that will benefit you in the future.

Customer said: Sounds good! Let’s do it! 

My friend said: Great! To get started, you are going to need some tools. You will need a chop saw, table saw, cordless drill, bit set, router, skill saw, jig saw, tool belt, hammer, etc..

Customer answered: But I don’t have any of those tools and I can’t justify buying all of these for one job.

My friend said: Ok. Well then for an additional $300 I can rent my tools to you to use for this project. 

Customer answered: Okay. That’s fair.  My friend said: Great! We will start the project on Monday. 

Customer answered: I work Monday through Friday. I’m only available weekends. 

My friend said: If you want to learn from me then you will need to work when I work. 

This project will take 3 days so you will need to take 3 days off work. 

Customer said: That means I’m going to have to sacrifice my pay for 3 days or use my vacation time! 

My friend responded: That’s true. Remember, when you do a job yourself you need to account for unproductive factors. 

Customer ASKED: What do you mean by that? 

My friend said: Doing a job completely from start to finish includes time spent to plan the project, pick up materials, travel time, gas, set up time, clean up, and waste disposal amongst other things. 

That’s all in addition to the actual project itself.  

My friend said: “speaking of materials, that’s where we will start on Monday so I need you to meet me at the lumber store at 6:00am. 

Customer said: At 6am?!!  My work day doesn’t usually start until 8am! 

My friend said: Well then you’re in luck!  My plan is to start on the deck build by 8am.  But to do so we have to start at 6am to get materials picked up, loaded and delivered to your job site.

Customer answered: You know, I’m realizing that a lot more goes in to a job than what a customer sees in the finished project. Your proposal of $4500 is very reasonable. I would like you to handle the project.

THE CONCLUSION:

When you pay for a job, (whether it’s a physical project or digital project), whether you are hiring a Lawyer, Accountant, Contractor, Coach, Therapist, and yes … a Realtor …  you not only pay for the material, and the actual time spent doing the physical labour or interacting with the client (as the case may be). 

You also pay for: Knowledge, Experience, Custom Skills, Tools, Time to plan, Time to Prepare, Professionalism, Work Ethic, Excellence, Discipline, Commitment, Integrity, Licenses, Sacrifices,  Liabilities Insurance, IF you’ve in fact hired the right person for the job!

Many years ago when I first started in Real Estate my first client asked me for a discount. 

The agent who was mentoring me was beside me in the meeting and replied to the client:

“Do you like to work for free?”  Client said “Of course not”.

“Do you like to discount your work for someone who doesn’t see your value that you otherwise get paid in full by a customer who does see your value?”  Client said “No”

and finally this agent asked: “If you have a boss and work for a company how would you feel if your boss came to you on Friday and said “We’d like you to keep working the same number of hours and do the same great work but we are going to pay you less this month?” 

Client said “I’d be pissed”. 

The agent said: “Then why do you expect that from us?”

Now, just to be clear. While that other agent made some very good points, I didn’t quite agree with his harsh style. 

I would never like to make a client feel bad or become confrontational with them. 

I like my clients to feel safe, valued, and respected, so my style is nothing like that original mentor I had. 

But it doesn’t mean everyone wouldn’t agree with those last questions if it happened to them (or perhaps you). 

If their proposal exceeds your budget, there’s nothing wrong with getting other proposals. 

Just remember.. you get what you pay for. 

Sometimes people need to ask for a discount because everyone asks them for a discount. 

Just imagine, if everyone paid each other full price then everyone would appreciate each other’s value, and nobody would feel bad or demotivated to work hard. And nobody would feel the need to get a discount because they’re always giving their service away. 

Oh and when it comes to real estate commissions, I actually did a dedicated post on how saving on real estate commissions can actually cost you much much more than you think you saved. 

Be sure to check out my video post called: “Realtor Commissions & The Big Dilemma For Sellers”

Whether you’re planning to leave your property to your loved ones, or you expect to inherit property in the future, if you’d like more information on how you can save probate fees please don’t hesitate to ask me.