Tea with the Queen

Client Wants a Discount Mid-Contract: What’s the Best Move?

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A client wants a discount mid-contract. They’ve asked you and you immediately feel on edge.

You can feel the story forming in your head before you have even replied. Are they unhappy? Did I do something wrong? Are they about to leave? Do they not see the value?

When a client wants to decrease their investment, it is easy to take it personally. But most of the time, that reaction will cost you money and it will cost you the relationship.

Don’t panic first

Here is a real example.

One of my clients runs a digital marketing agency. She signed a new client on for a three-month engagement. His previous provider had been cheap and inexperienced, and his marketing was a mess. From day one, everyone knew this was not a quick fix. It would take the full three months to turn things around.

She got stuck in and for the first six weeks she delivered exactly what she promised, plus a little extra because that is who she is.

Then the client called.

Six weeks in, he wanted to lower his monthly investment by two-thirds.

Now if you have ever had that call, you know the feeling. Your heart sinks and your brain starts scrambling for meaning.

But here is what mattered.

He was not unhappy. The results were not bad. She had not done anything wrong.

The real issue was cash flow.

When a client asks for a discount, get curious

Do not automatically assume a client is questioning your value. Ask what is actually driving the request.

In this case, the client had started to panic. Lowering the monthly payment felt like the quickest way to relieve pressure.

That is human.

But lowering the price by two-thirds while expecting the same level of work is not realistic. You do not get to drop price and not drop scope.

So instead of reacting emotionally, we explored options.

The three options you actually have

When a client asks for a discount, you usually have three paths:

  1. Release them from the contract, even if your terms are solid.
  2. Hold them to the original agreement and risk damaging the relationship or chasing unpaid invoices.
  3. Keep the scope the same, but restructure the payments so it feels manageable.

When we stepped back, option three was the obvious choice.

The problem was not the price. The problem was how the price was being paid.

Business owner to business owner

My client went back to her client and had a second conversation.

Not supplier to customer. Business owner to business owner.

She acknowledged that business can be tough. She listened. She got practical. She explained what was required to get the results he wanted.

Together, they agreed to split the payments across the month while keeping the original scope intact.

Everyone won.

The client got the service he needed. She protected the integrity of her work. The relationship stayed strong, and honestly, it probably strengthened.

Protect revenue and protect relationships

When a client asks for a discount or to lower their investment, the fastest way to lose is to get defensive.

Yes, it can take a little longer to talk it through, but sometimes the problem is not price. It is timing. It is cash flow. It is the way the payment is structured.

The best business owners do not just protect their revenue. They protect their relationships.

And when you approach the conversation as one business owner helping another, you often find solutions that neither of you could see at the start.

Read The Full Transcript

[00:00:00] EMMA: You have a client who wants to reduce their investment with you. Immediately you feel attacked and you take it personally. Today, I wanna help you switch that thinking and offer an alternative perspective. One of my clients runs a digital marketing agency. She had signed a new client on for a three-month engagement.
[00:00:17] Yippee. The client needed the work. His previous provider had been inexpensive and, as we often find, inexperienced, and unfortunately had left his marketing and digital strategy in a real mess. From the very beginning, everyone understood that this wasn't going to be a quick fix. It would take the full three months to turn things around.
[00:00:38] So my client, as she does, got stuck straight in, and for the first six weeks she went all in, delivering exactly what she had promised. Plus, I guess a little bit more, because that's who she is. Then the phone rang. We're six weeks into this engagement. Her client wanted to reduce his monthly investment by [00:01:00] two thirds.
[00:01:01] Now, if you've ever had a conversation like that, you'll know your heart can sink pretty quickly. We have all been there. Was he unhappy? No. Were the results not there? No. Had she done something wrong? No. All of these things go through your head. My client did what I wish more business owners would do. She didn't panic.
[00:01:26] That was the first step. The second step was she picked up the phone and called her friendly business coach. PS, I'm the friendly business coach. Anyway, sometimes you just need the sounding board, don't you? You just need to talk it through. And together, we unpacked what was actually happening for him and what was happening for her.
[00:01:45] The client wasn't unhappy with her. In fact, they were ecstatic. He hadn't been promised overnight results, and he knew that. It was very clear. The work was progressing exactly as everyone had [00:02:00] expected and as she had promised. The real issue was cash flow. Like many businesses right now, he'd started to panic.
[00:02:07] Reducing the monthly payment felt like the quickest way to relieve the pressure. We've all been there. But reducing the payment by two-thirds while expecting the same level of work simply wasn't realistic. You don't get to drop price and not drop scope. So instead of reacting emotionally, we explored all the options.
[00:02:30] We came up with three. Option one, release him from the contract altogether, even though the terms and conditions were solid. PS, if you don't have solid terms and conditions, may I humbly suggest that you get that sorted. Option two, hold him to the original agreement and risk damaging the relationship or ending up chasing unpaid invoices.
[00:02:51] Option three, keep the scope exactly the same, but restructure the payments so they feel more manageable. They were our three [00:03:00] options, and when we stepped back, option three became the obvious choice, right? The problem wasn't the investment. The problem was how the investment was being paid. It was too much in one hit.
[00:03:18] So after discussing this with her, she went back to her client and had another conversation. She got curious. She got practical. She didn't go back supplier to customer. She went back and talked to him business owner to business owner, because we've all been there. She acknowledged that business is tough at times.
[00:03:37] She listened. She got curious. They spoke openly, and she explained what was required to achieve the results that he actually wanted. And together, they agreed to split the payments across the month while keeping the original scope of work intact. I feel like this is like a win-win-win, right? The client received the service that he needed and needed to grow his [00:04:00] business, she protected the integrity of her work, and the relationship stayed really strong.
[00:04:06] Actually, it probably strengthened the relationship. Everybody won. Everybody wins when we have transparent conversations. The lesson in all of this? When a client asks to reduce their investment, don't automatically assume they're questioning your value. And ladies, I know how this feels. We need to get curious before we get defensive, and ask what's really driving the request, what's happening for them in the moment.
[00:04:35] Yes, it takes a little bit longer, but sometimes the problem isn't actually the price or the investment or the cost. Sometimes it's timing. In this case, it was definitely timing. Sometimes it's cash flow. In this case, again, cash flow. Sometimes people simply need a different way to get to the same destination, and if she had just given up and thrown her hands in the air, they would never have got there.
[00:04:58] The best business owners don't [00:05:00] just protect their revenue, they protect their relationships. The relationships mean something to them. When you approach these conversations as one business owner helping another, rather than a supplier versus customer, you often find solutions that neither of you could see at the start.
[00:05:18] And that, that, my friends, is why I love working closely with my one-on-one clients. We come up with some cool options, which mean it's a win-win for everyone. Thank you for joining us today. Tell me, what would you have done differently to this? I'm so curious to know. Would you have suggested option one, two, or three, or would you have suggested option four?
[00:05:39] We would love to hear from you if you've got an alternative. Thanks for listening to Tea with the Queen. If you've enjoyed this podcast, please leave a rating and review on Apple Podcasts. It really does help to get the word out. For more about me, please visit emmamcqueen.com.au, and I look forward to your company next [00:06:00] episode.