Recently, a customer asked if I would reduce my hourly rate after six months of working with them on an organizational transformation. What struck me was that there was no specific reason given for this request.

At first, I was uncertain about how to respond. I knew what I didn’t want to do: justify why my work was worth the pricing.

My assumption was that the customer wanted to save some money, which seemed unrelated to the quality of the work I had done thus far.

This made me consider the message it would send if I lowered my rate. Wouldn’t it affect my credibility? If I reduced, it by 10% it’s still insignificant peanuts. Furthermore, a larger reduction might lead clients to think, “That was easy – I asked, and he dropped the prices by 30%. Was he overcharging me before?” I firmly believe that my work is worth the price I charge, and it aligns with market standards. Additionally, considering the savings generated through increased productivity and lean methodologies, the value I provide equates to a return of “spend a dollar on me, and you get between 5-8 dollars back.” However, proving this quantitatively is challenging.

Based on my assumptions, I believed the customer was satisfied with my work, and the request was primarily about saving costs. They likely realized that transformative changes take time, and my expertise was indispensable for a more extended period than initially anticipated.

I had prepared the following dialogue in my mind (C = customer, Me = me):

C: Did you reconsider your hourly rate?
Me: Yes, I did. But before we proceed, could you share your intentions? Is it solely about cost-saving?
C: Yes.
Me: Alright, what if I propose a more effective way to save money, one that goes beyond just reducing my rate?
C: I’m listening. Go on!
Me: The most significant impact on savings lies in the pace of your company’s adaptation. I would be doing a disservice as a consultant if I signaled that it’s acceptable to slow down by lowering my rate. Imagine if my work could save 50 employees approximately 2 days a month (and considering your company’s size, this is a conservative estimate). We both understand the concept of investment: you spend a dollar, and if you get more than a dollar in return, it’s a wise investment, isn’t it?
I am just as invested in the success of this transformation as you are. Let’s focus on addressing the factors that hinder our progress. If you aim to move on from my services as quickly as possible, it signifies that I’ve done my job effectively.

The day came and I did exactly as described. The negotiation concluded at this point. My customer understood that the power to save money was in their hands, and my hourly rate was not the focal point. I was relieved that the customer grasped this perspective. Moreover, I was glad that I didn’t have to justify or defend my work, as I might have done in the past. … and of course, I kept my rate.