Adventures in Pricing

A few weeks ago, a dear friend who is also an entrepreneur in another line of business referred a new direct client to us.

The client, who had never worked with a translator, contacted us and asked for more information, which we gladly provided. Then they mentioned that the rate that they had in mind for translators was roughly seven times lower than our rate. We took the opportunity to do some gentle client education, explained the process, how time-intensive it is, how much in-depth knowledge is required, etc. We also added that unfortunately our rates were simply not in line with what they were willing to pay, and that we understood if they did not want to move forward. We carefully pointed out that high-quality services are usually not available at very low prices, and mentioned that we'd be happy to recommend qualified colleagues who charge slightly less than we do.

A few days later, the client got back to us and accepted our original rate, which was seven times higher than what they were originally willing to pay. They said that they appreciated the fact that we took the time to explain the process and that they would prefer to work with us than with a colleague because we came highly recommended. We are still quite stunned at this outcome, as we didn't think we could reach an agreement with this particular client: we thought their ideas of pricing simply differed too much from ours. The lesson: take the time to educate your client, stand your ground, and good things might happen. 


8 comments:

Curri on November 30, 2010 at 1:59 AM said...

Good call!! I always try to explain those things to the people that offer me low rates, even though most of the times they can't do anything to pay more. Those are mostly translation agencies who have their rates set and don't want to change them. It's up to us to educate them to understand that a good translation can't be rushed AND badly paid. If all translators did this, it would be a different story :)

But I have also had examples of direct clients who, as yours, had no idea of how the industry works. They requested a budget and I gave them my best (as in highest) rates, and they found it cheap!! Not only that, they didn't pressure me as in when to send the translations back. I was in charge to get the whole text translated into English, German and Chinese (obviously, I wasn't translating into those languages) and I had a problem with the Chinese translator, who seemed not to have time to finish the translation, so every time I apologize to them, they said it wasn't a problem, as they thought it was normal to take time as translations aren't easy.
At the end, they paid me more than the agreed rate because they still thought it was too cheap :)

Anonymous said...

I am glad it worked for you. So far it has never worked for me, even with all the explanations in the world...

Álvaro Degives-Más on November 30, 2010 at 1:22 PM said...

NO.

That's one of the hardest words to master. Yet as your shared experience illustrates, it is also among the most rewarding. Kudos for emphasizing the educating aspect; that's also among the sagest of investments. Clients can come back to you from very unexpected corners that way.

Anonymous said...

I share your views, but it doesn't work for me as a rule, i.e., I don't even get the chance to "educate" the client. They ask for a quote, I quote and they don't even say "thank you", they just disappear. And I just "know" that it was not a low but indeed a reasonable price. Conclusion: they found someone who quoted lower, and the prospective client simply did not care about quality. What do you do when they do not even object to your price but vanish into thin air?

Sara on December 1, 2010 at 2:07 AM said...

We are constantly struggling with this. We get a lot of requests for quotes and have to decide each time whether or not to spend valuable minutes of our day educating clients we have a feeling are not on the same wavelength as we are...but as you point out, sometimes you are pleasantly surprised!

Thomas Gruber on December 1, 2010 at 2:11 AM said...

@Anonymous: you have to set a price and you should not willing to work for peanuts. If they vanish and find a colleague with a lower price so be it. But if you're willing on competing on price (at a lower quality) you end up competing with Google Translate and that's a free service you can't beat.

Agencies search for the lowest rate but direct clients pay for the customer service (friendly voice on phone, fast email replay, asks questions about the topic etc. etc.) and the ease of handling translations with you way more than for quality (they can't judge anyway).

Agencies only come back to you if you're the only one left for them and in this case you should add a extra fee because the most of them don't value good work and only search for maximum profit.

Judy Jenner and Dagmar Jenner on December 1, 2010 at 9:39 AM said...

Thanks for the insight, everyone!

@Curri: that is a great, very rare story indeed! We have heard that once in a while from clients -- that they'd gladly pay more, but they are few of those. We completely agree with you in terms of sticking together as a profession and not accepting badly paid rush jobs. And we can't believe your client gave you an unexpected bonus/tip -- that's great. They seem to highly value your services, and we are sure it's well-deserved.

@Anonymous: it doesn't always work for us, either. We bid on many more jobs than we actually get. It's just the nature of doing business: you get some contracts, and you don't get others. There will always be customers who are extremely price-sensitive, and we thank them for their interest and tell them that we are not the best vendor for them.

@ADM: Yes, that is a very powerful word, isn't it? We need to use "no" more effectively. And we agree: educating clients benefits the entire industry, and you never know...

@Anonymous: We encounter those clients, too -- quite frequently. Many times you don't even get to the client education phase, and while that's unfortunate, that's just part of business life. What to do? You move on to the next client. It's difficult, but we try not to take it personally -- if a client is not concerned about the quality of a service, there's nothing we can do about that.

@Sara: Yes, it's a tough call, and unfortunately, we don't have a crystal ball that would tell us if the client education will have a positive outcome. We just go with our gut feeling, and you are of course right on target: time is the only resource we have, and it must be used effectively.

@Thomas: Yes! Setting adequate, professional rates and sticking to them really is key. There are clients out there who value quality, and they are willing to pay for it. Competing on price is not the solution, although it is disheartening to see when colleagues don't follow suit and underbid -- but we resist the temptation to do so. Lowering rates destroys the market for all of us. And just for the record: we get underbid all the time, but our rates are what they are.

Rose on December 2, 2010 at 7:31 PM said...

I once had a case exactly like this, when I was a lot less experienced. I saw an ad for a translator, and I duly sent my CV and line-based prices. They wanted me to do a trial, of 400 words... of a specific document... Some way in, after sending the first part, they then said they wanted to pay a ridiculously low rate that was, similarly, around 1/5th my normal hourly rate. I also explained the way of a translator, and that if they wanted a cheaper translator, they could easily find a non-native for the job. They then cancelled.

Since they had already gotten me to do most of the document, I wouldn't be surprised if they simply waited for another translator to do the second half on a 'trial' basis. Perhaps this was the entire scheme?

The lesson learned: Never accept a trial that is longer than 200 words as a matter of course, only up to 400-500 if there is a specific reason, or this is an especially important client. I have found some similar clients today have agreed to take samples of past work, instead.

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