How is the Gig Economy Affecting Your Clients Perception of Price?
Posted March 13th, 2018
The gig economy has affected the business world in a number of ways. While access to highly skilled professionals who are especially interested in short-term opportunities has been a boon on the hiring front, it has also shifted how clients view the pricing for various goods and services.
Certain gig-oriented platforms have allowed companies to acquire goods and services for less, providing access to workers who are willing to quote rock-bottom prices as a means of securing work. If you’re a business operating in ones of those areas, such as the web development and programming fields, you may be encountering clients who question your prices based on a single point: they can find a freelancer willing to do the work for less.
Low-Cost Freelancing Platforms
While not every freelancing platform is based on a low-cost model, sites like Fiverr and FiverUp promote their sites as a way to find professionals willing to perform specific tasks for less. In some cases, this is because they tap into foreign labor where a dollar goes farther or freelancers starting their careers are willing to undercut competitors to secure jobs.
However, these platforms have the ability to sway the entire market, giving clients the impression that these lower prices aren’t anomalies, but a reflection of the going rate.
Managing Client Expectations
Not every client assumes that these low-cost platforms represent an accurate picture of the going rate for specific kinds of work, but some do. And that means you’ll need to manage their expectations if there is a question about your pricing.
First and foremost, it’s important to remember that you don’t have to adjust your pricing, especially if you are actually within the industry standard for that specific good or service. Instead, you need to be prepared to educate your client regarding the value your business provides, including the skill of your staff and the quality of the final product.
Yes, they may be able to find someone through a gig-oriented site that is willing to do the work for less, but that arrangement comes with an inherent level of risk, particularly if the freelancer isn’t able to offer any guarantees (and you are) or can’t provide examples of their work (and you can).
Typically, you’ll need to provide clear justification for your pricing, as that will help the client see why your company is worth the extra money.
However, if everyone doesn’t see eye to eye on the matter after a reasonable discussion, it’s possible that avoiding the arrangement entirely is the way to go. Otherwise, you risk devaluing your goods or services over the long-term, especially if word gets out about the price you provided the client.
In the end, the gig economy is here to stay. But many clients understand that the prices offered on low-cost platforms aren’t necessarily an accurate reflection of industry standards. Be prepared to stand your ground, when needed, and don’t be afraid to walk away from a potential client if they won’t accept a reasonable price.
If you are interested in learning more, the professionals at Bayside Solutions can help. Contact us to speak with one of our knowledgeable team members today.
