6 Reasons Why Not-For-Profit Pricing Lowers YOUR Profit
“Do you have a special rate for not-for-profits?” This is the question that boils my red-hot blood!
I know that we all have a good heart; I know that we all want to do the right thing; but, sometimes the cause that pulls our heartstrings stings our bank account. In short, changing your pricing for not-for-profits means you’ll too soon be a not-for-profit!
Why Discount Pricing for Not-for-Profits Doesn’t Work:
Lower-fee pricing doesn’t work because it:
- Undermines Your Brand – Pricing is part of your brand positioning; you can’t price a Tesla like a Yugo and expect to preserve your luxury status. By the same token, H&M shirts priced like Prada alienate loyal customers and drive down sales. Have you now become the Wal-Mart of your industry?
- Creates A Pattern Of Negotiating Your Fees – If you client migrates to another job (highly likely), they’ll continue to ask for a discounted fee.
- Undermines Pricing Flexibility In The Future – How do you charge $10 k for coaching when you just offered it to someone else for $3k?
- Lowers Your Profitability – Let’s be clear: taking on 10 reduced fee projects, lowers your revenue. And, if your goal is to make more money in 2016, you’re now on the wrong road.
- Instills Resentment – If you feel that you’re not being paid what you’re worth, there’s a good chance the lower fee work might build resentment. And that resentment could lead to you creating less than stellar work leading you to a new baseline of mediocrity. Ouch!
- Takes Away Time & Opportunity from Higher-Paying Work – Opportunity knocks often just once and if you’re too busy to take on a new project because you’re swamped with lower fee work, you might have missed out on the opportunity of a lifetime.
Please understand that I’m not ruthless. I do work with non-profits, but I often find it easier to just pick one charity and donate my work. I had the pleasure of changing the name of The Child Abuse Prevention Foundation to Promises 2 Kids.
What’s your point of view? Let me know below or over at my blog.