A few days ago, we saw some very insightful posts on Twitter about a translation-related presentation. The speaker mentioned (unfortunately, we did not write down his or her name) that if your clients are accepting all your price quotes, it might mean that your quotes are too low. We think the speaker put it in these terms: if your customers don't decline at least 25% of your price quotes, then your rates might be too low. We could not agree more and would like to shed some light on our own experiences when it comes to pricing. Please keep in mind that we work exclusively with direct clients, and we know that language service providers (LSPs) work quite differently. Update: we just heard from some fabulous colleagues that the quote we had seen actually came from the The Freelancery, which is always full of good advice (some is tongue-in-cheek).
|Cute, huh? And yes, we paid for this image.|
It's a pretty well-known fact that we are not the cheapest provider around -- quite the contrary. We have worked hard to be in the lucky position to have many repeat customers, who make up at least 70% of our business. Our repeat customers feel very comfortable with our prices and the quality that they are getting, so they never haggle. Most of them don't even want a price quote, and we are happy to waive this formality for clients who have a stellar payment record, which includes all our repeat customers.
For new clients, we get about 50% of the business we bid on, and we are very happy with that. Let us elaborate: right off the bat, we know that there is a segment of the market that will never purchase services from us, because they are looking for the cheapest rate and we are not it. That's perfectly fine. We try to develop a good radar for who these people are and usually send them our rate sheet (which is also easily available online) to see if they agree with our rates before spending the 10 minutes it usually takes to make a formal price quote (we use TranslationOffice 3000 to do this). Many times, clients are surprised by our rates, and we thank them for their interest, recommend a colleague if possible, and move on. You know the story: many clients think that translation should be priced at the same rate of say, housecleaning services.
Other customers initially feel comfortable with the rate, perhaps because a per-word rate is a bit of an abstract. However, once they see how many words need to be translated and they see the total of what it is going to cost, they back down and might say: "I thought it was going to cost $200 or so!" when we sent a quote for $2,000. Obviously, that's too far of a gap to start negotiating, so we wrap things up.
Of course it is always disappointing when you don't get a project for which you have submitted a quote. We all like getting business, but we are quite content with our 50% success rate for new clients. On the other hand, it can be a hassle and quite time-consuming to draft complicated quotes (say, for multi-day interpreting assignments) only to have the client choose another provider. A few months ago, we spent more than three weeks going back and forth with a potential client ( a conference organizer who always had to confer with her client) about a large-scale interpreting assignment for several languages. We probably put at least 10 hours of work into this, only to have the client decide that "their international delegates would translate" -- yes, they meant "interpret." Of course, that was a bit disappointing, but that's the way business sometimes works.
We realize that our rates are set at a professional (read: relatively high) standard, and we don't need to get all of the business we quote on to make a good living. Ideally, 100% of new clients would accept our quotes, but then we wouldn't get any sleep!
What about you, dear colleagues? Do you always get all the work that you bid on?