A Highly Scientific Method

We oftentimes talk and write about making business decisions, and about how they are not always easy -- quite the contrary. Your succcess in this industry, and in any other, depends (to a large extent) on the decisions you make. Much of this has to do with the clients you choose to do business with, and we will focus on that important aspect in this brief blog post.

Sometimes, it's all Greek. Athens, 2013.

As we all know, when you do business with someone you don't know and agree to invoice them after the project has been completed, you are essentially extending credit to them, which is a scary thing. We only work with direct clients, but if you work with agencies, you are in luck: the fabulous (small fee-based) database Payment Practices, run by our lovely colleage Ted Wozniak, lets you consult a database to see if your potential client has had a good payment history. This is an invaluable tool, but no similar tool exists for direct clients (there are a few tools, such as the Better Business Bureau, but they are usually limited to a certain geographic area). So how do you decide if your client is trustworthy? How do you decide if you should extend credit to your client? We have a few rules, but our main approach is highly scientific. Yes, it's called gut feeling. And yes, we have been wrong, but not that often.

• Since we get a lot of referral business, we usually know a little something about companies that approach us looking for price quotes. We feel quite comfortable extending credit to established companies, especially if they are in our geographic areas (Vegas and Vienna, Austria).
• For translations requested by private parties, we ask for payment ahead of time in full, as we would have no way of tracking down ootential non-payers. No one has ever objected to this, as it's quite common to pre-pay for some services, even some as small as drycleaning.
• For interpreting assignments for private parties (for instance, those who retain Judy to interpret for civil matters in the courts), we usually ask for a deposit. Depending on our gut feeling, that deposit ranges from 50%-100%. If someone refuses to pay a deposit, we respect that decision, but take it as a bad sign and decline the project.
• Of course, there are many, many gray areas, and we don't have all the answers and don't always make the right decisions. Sometimes you just have no idea if a client will pay or won't. However, we've been in business many years and have generally been quite successful with this approach.

What about you, dear colleague? Do you have any specific tips to share or general comments on this topic? We would love to hear them.

Just Do It: Price Discrimination

Yes, we collect bills from around the world. Photo by Judy.

It was a tough winter here in the US, and some companies made a handsome profit because of it. The revolutionary car-on-demand service Uber is one of them. In the middle of the Washington  and New York winter, Uber decided to charge customers three and four times the regular rate. This earned the company a lot of bad press, but the company’s CEO defended his pricing policies saying that he needed to use this pricing model to entice more drivers to come out and work, which was a good point. While we don’t agree with Uber’s decision to essentially price-gouge their customers, we do think all of us, as small business owners, should take advantage of price discrimination strategies. Essentially, price discrimination is a strategy that charges customers different prices for a product or service – and even though we love talking about economics, we promise we won’t get into the hard-core economics of it.

When we tell friends and colleagues that all our rates are public on our website, many are surprised. We go on to explain that we think price transparency is a good thing and that we want to save ourselves and our potential customers some time by telling them what to expect. Many colleagues do agree that having rates publically available is a good idea, but they are worried about having different price points for say, translation agencies and direct clients, but it’s perfectly fine to have different rates. In fact, almost every business has them. Let’s look at some other businesses to see how they handle price discrimination. Remember that we are not lawyers (although Judy is married to one), and that this is not legal advice, but rather our experienced-based opinion. Now, let's finally have a look at some examples:

• ·   Lawyers oftentimes offer lower rates for non-profits, local resident discounts, firefighters (or whichever group they support), etc. We recently hired a lawyer who told us he had a regular rate, a rate for people he considers “total jerks” (he used another term that’s not fit for this blog) and a rate for people he likes. He charged us the latter – at least as far as we know.
• ·   Restaurants charge you half the price for a glass of Sauvignon Blanc if you drink it at the bar during happy hour. However, if you order the same glass of wine a few feet away at an actual table, it will cost twice as much. Is it fair? Probably not. Is it legal? Absolutely. One of our favorite high-end Vegas steakhouses now offers a Sunday special, which gets you $60 steak for $30 on Sundays. We are happy to report that the steak is exactly the same and just as tasty!
•     Travel-related expenses can vary depending on age and even nationality. When we take a train from Salzburg to Vienna with our dad, his fare is half of ours. When Dagy enter Argentina on her Austrian passport, she doen't have to pay for a “visa.” However, if Judy uses her American passport, it’s $150. Flights to Europe are cheaper in March (low season) than July (high season). 
•     The price of recreational activities can vary widely. Judy recently wanted to play the same round of golf that she played with our dad in February for $65, but the rate had increased to $110 because the weather was nicer. Skiing is always cheaper on Wednesday than on Saturday. These businesses engage in price discrimination to stimulate demand during slower periods.
•      Many businesses offer a certain discount to customers who saw their ad on say, a billboard, a magazine or a flyer. They will tell you to bring in the flyer to get 10% off the final bill.  Others, such as gyms, have lower prices for women, although they have gotten into some legal trouble because of this practice, as it can be construed as gender discrimination. Our take: men should be happy to have more women at the gym (they usually do put the weights away), but we digress.

So, dear friends and colleagues: while we know this can be a controversial topic, we think you shouldn't be afraid of price discrimination. You get to set your own prices and you can offer different price points for different clients. You wouldn’t be the first business to do so. We would love to hear your thoughts on this!

35 Million Free Images

Thank you to Rose Newell, who tweeted about Getty Images' decision to make 35 million images available for free use for bloggers! This is good news for those of us who have blogs, but, as the BBC correctly points out, it essentially means that Getty Images, the world's largest photo agency, has given up, as it's just too challenging to patrol the internet for stolen images. 

We think it's essential to respect others' copyright, and on this blog, we have long used only purchased images, royalty-free images, or images we have taken ourselves with our very unsophisticated phones. We are delighted that we now have millions of professional images to choose from to make this blog even better.. We just created an account on Getty Images and downloaded the image you see on this page. The process was free and quick, and once you find the image you like, you click on "</>" (embed code) right underneath the image to copy and paste the image code into your blog or website. You will have to agree to the site's terms (=no commercial use), and you are on your way! Unfortunately, we could not align the image left without having to work in the code, so there are some drawbacks to sizing/positioning, but free images are great! Here's the BBC article about Getty Images' decision, and here is the link to get started.