I get lots of questions from beginning and experienced translators about volume discounts (charging a lower per-word or hourly rate for larger projects). I actually think that after “how much should I charge?”, “should I offer a volume discount” might be the second most frequently-asked question that I see. Here are a few thoughts, and feel free to add your own.
When I first started translating, I enthusiastically offered volume discounts. During my first year as a freelancer I worked about 10 hours a week and made $9,000. Seriously- there’s no zero missing! Out of that $9,000, $2,000 came from just one project on which I gave a substantial volume discount. Why? Because I didn’t have much work, and working for less than my standard rate was a lot more appealing than not working at all. Flash forward nine years, and I recently realized that not only do I not offer a volume discount any more, but sometimes I actually impose what might be considered a volume surcharge. Why? Because I have enough work at my standard rates and a volume discount would put me in the position of turning down other projects at my standard rate. However, I will sometimes do a small project at a lower rate as a favor to one of my regular clients. It helps them out, it doesn’t tie up too much of my time at a lower rate and it shows the client that I’m willing to show some flexibility within reasonable limits.
Volume discounts have their place. I think that the principle of volume discounts is fair: if a client guarantees you a week or two of work, you get to spend all of that time on the clock. Your administrative overhead is a lot lower, because you’re dealing with one client and one invoice rather than 10 clients and 10 invoices. You will probably work faster as you “ramp up” on the project rather than switching gears twice a day. You don’t have to stress out about juggling multiple projects because you’re just plugging away on The Big One. But when your client base grows, you have less of an incentive to offer a volume discount: you’re not desperate for the work, you’re busy most or all of the time anyway, and if you’re too busy, it’s time to raise your rates!
Very well-written and considered post. I wholeheartedly agree – large projects usually make me nervous precisely because of the reason you’ve stated, whereas I used to think of them as the Holy Grail of freelance translating.
A friend of mine deals with large jobs like this:
She works out how many days it will take her and quotes a slightly lower than usual rate. However, she asks for 25% more time than it would take if she actually devoted all her time to it. That way, she enjoys the security of a large chunk of income whilst still leaving room for smaller jobs too.
I haven’t tried this approach myself but I think it’s quite an interesting one!
Big Jobs that keep you completely busy for several weeks will tend to cause equally big gaps, and if they are also from one or two Big Customers then they make you very exposed to losses if one of them decides to stop using you. For me, one of the reasons for becoming self-employed was to spread risk. If a company regularly needs half my time, they should hire me – end of story. My ideal client is someone who has realized that I’m good for the high-end stuff that comes regularly but in limited volumes. Mainly advertising.
Economies of scale is the key to discounts, I believe.
In essence, if there are economies of scale, then a volume discount is legitimate. Apart from the admin side as you mentioned, I’m not sure I sure I see any real economies of scale from doing 1 x 50k words versus 10 x 5k. Speaking personally, the admin saving would only be about an hour or two in that case (I don’t do much admin!). I might round down to the nearest 50 euros as a gesture, but otherwise, I don’t see the need for discounts.
Judging from a Twitter conversation this week, not everyone gets more efficient with fewer, larger projets. Some lose interest and actually work less well, it seems. Personally, I do like to have the option of another project to switch to when interest flags, as it inevitably does, so I can see the point those tweeters were making. Hence as a matter of course, I never calculate the lead time for more than 10k words on a simple 2k/day basis as I do for smaller jobs. I always add time for other jobs to intersperse to keep interest up. And to keep other customers happy, natch. And since I don’t actually set aside working time for stressing about juggling jobs, I don’t save any time by having one large project 🙂
And I will leave aside the argument that volume discounts could tend to add to the impression that translation is just a bunch of words as a commodity, not a skilled service. That cuts both ways. If you find it takes you less time to do 20k words for one job than 4 x 5k words for four jobs, then maybe a discount works. I’m not sure that’s the case for everyone.
In conclusion, therefore, sorry, but I beg to differ.
But as I always say, we are all free to make our own business decisions on the basis of what works best for us & our clients. Horses for courses, and all that.
Translation does not carry with it the economies of scale that, for example, the production of plastic bottles in a factory does.
Even technical texts in so-called standard formats can create difficulties for the translator which are not experienced in shorter texts. The greater the volume, the greater the number of translation difficulties. Discounts for volume seldom mean less work for the translator. The trade-off is this: the translator works just as hard as ever; the client gets a percentage of this work for nothing!
Key point.
And where there is actually the opposite of an economy of scale is where a job is too big for an individual translator. Then it needs a professional project manager coordinating the work; and this coordination and quality assurance, if it’s done well, requires very high skills and is certainly not worth less than the work of one of the translators. So let’s say one manager/checker/editor can manage 5 translators, then the big job of this type should actually cost maybe 15% more per word.
(The missing 5% I assign to proofreading expenses which get transferred from the individual translator to the project manager)
Like you, Corinne, I tend not to offer volume discounts. The one exception is on occasion for my best client: they are a direct client, we have worked together for over 6 years now, they happily pay my best rate and checks arrive within two weeks. The occasional discount is a sign of goodwill to them, that I appreciate their business. They never ask for any discount and whenever I give one, I make it very clear in the quote and/or invoice so that they are aware. They always appreciate it and that’s good for business.
How about discounts for fuzzy matches and repetitions when you use CAT-tools? I tend to give that when asked to, but a lot of these projects are software related and actually do go a lot faster if there is a lot of repetitions or fuzzy matches. I am curious to know if this is a common thing to do.
Very true. Good blog post.
Let me just add that i do what I call “client pricing”, not “job pricing”. What does that mean ? It means I figure out what the right price should be per client, and then my rate is always the same. If you price based on job, the client gets the impression that your price is constantly fluctuating, like a commodity. I like the stability of one price per client. Sure, I might lose out on a job that is a bit more complex, but the image the client gets is that I am easy to deal with.
Literary translating is an example of a genre that is more or less automatically volume discounted. I’d never normally work for less than 1 Euro per line (in fact I hardly ever work for less than 1.50), but I was contacted for a book translation which would have worked out at about 75 cents. That would have been fine, though, because the total was around 15,000 Euros and it would have been spread over a year or so. And the subject and author were very interesting for me. It didn’t work out, for other reasons, but it’s a format of job I’d be happy enough with.
Anything that generates a monthly or quarterly check around the level of my subsistence expenses and leaves time for other work is not evil.
Imho, the biggest mistake many translators make is to feel insulted when someone treats them like a businessperson. They seem to think “How do you dare asking me for a discount? Don’t you know I have bills to pay?”
Yes, of course, we have bills to pay, but so does every businessperson out there.
I can negotiate the price of a new car; I get a free bottle of wine if I order a lot of pizza; and there a tons of stores/businesses out there that offer free goodies to returning customers – and this includes businesses that offer services rather than goods/products.
Same with translations. Don’t focus on the single word as a commodity. Focus on your time and on the amount of money you need to make. And then translate this (no pun intended) into your price per word/line/hour/breath/whatever.
If a translator gets angry/worried/enraged about requests for discount, s/he is doing something wrong. They’re part of the business. Deal with them!
If you feel you might be losing clients if you don’t give any discount, then adjust your business so that you’ll be able to give in to these requests.
And if you can afford to say no to each and every one of these requests without losing clients, then that’s even better. Just make sure they won’t replace you with someone giving discounts some day. 🙂
JB scripsit:
If you price based on job, the client gets the impression that your price is constantly fluctuating, like a commodity.
Not sure where you get that idea, John. If the logic behind your quotation is fairly clear to the client, differences in the piece rate will be understood and usually accepted. I’m sure you wouldn’t charge the same rate for a large overnight rush job or 20 pages of nearly illegible fax as you would for an uncomplicated document with nice, clean text in it. At least I hope you would not.
Like Corinne, I find that economies of scale seldom apply to large jobs. In fact, in a large job involving milestone deliveries of parts of it, things can get interesting when information found after 20,000 words or so makes it clear that a change of terminology is called for; I’ve had this happen to me even in projects where there has been considerable effort put into terminology research and agreement at the outset.
There are so many little ways in which a large project can indeed be far more effort than a series of smaller ones with the same total volume. So you’re right to add an appropriate surcharge!
Simone said: ”
Imho, the biggest mistake many translators make is to feel insulted when someone treats them like a businessperson. …
I can negotiate the price of a new car; I get a free bottle of wine if I order a lot of pizza…”.
I agree. What translators need to realise is that they have to behave like businesspeople too. The car dealership has already factored in the likelihood of buyers wanting discounts, so they calculate the starting price, and have predetermined limits as to the amount of discount they are able to offer.
A nice phrase to remember is: “For this type of work I normally charge X cents per word (where X = normal rate + say, 20%)”. If the client wants a 5% -10% discount, you are in a position to give the discount, knowing you still have managed to secure the “surcharge fee” for the high volume job.
It is a (serious) game, and we have to play it; if not, then we are really doing a percentage of the total job for nothing.
(Coming in late on this: I’ve been on the road).
OK, Simone and Allison — but all this assumes that you also react in business mode to *raise your prices* in other situations, taking advantage (or should I say “advantage”? :-)) of the fact that scarcity = higher price when clients don’t give lead time, need work overnight, etc. etc.
The higher-price-this-time reaction is neither evil nor sneaky (as some translators imply). We work in a market economy, and it is in our interest to know how to use it to our advantage, not simply suffer the disadvantages through discounts, etc.
My two eurocents.
You make an excellent point, Christine. I must confess, however, that I have not specifically negotiated an “urgent rate” for some time now. One reason for this is that I “moved away from my cheese” to borrow and mangle a popular, if outdated, image. I changed countries of residence, and essentially have had to start from scratch again. I feel I have made some inroads into my new piece of cheese, and have become a little better acquainted with it. I now have a better idea of a workable approach to a certain segment of my (growing) client base which I would like to develop. I find these new relationships fascinating! I aim to make them worth the effort on my part.
Whilst appropriate and fair pricing is an art, I do believe we must not lose sight of the product itself, which as we all know, has to be of excellent quality.
By the way, I am delighted to have stumbled upon you again. I last read something from Fire Ant & Worker Bee in about 2004. Congratulations on the publication of your new book. The graphics on the cover are amazing, and I am certain we could all benefit from taking its contents seriously. I am itching to read it!
My 1,8 eurocents (10% discount for sheer pleasure factor) 🙂
Well-written post, Corrine. I have customers who ask me for discounts “just because”. That is, they have no specific reason to make the request, other than they want to pay less money. I always caution people to never simply discount the price. If the client doesn’t want to pay what you are charging, then the specifics of the project need to be renegotiated. What is the client wiling to live without? What parts of the project are not necessary?
If you simply lower your price, they will never trust a price you give them in the future.
Unfortunately, I have also seen this methodology backfire. If a customer doesn’t want to pay the rate your are charging, and you negotiate for less work, it doesn’t mean that the customer’s expectations have changed. I have had situations where I negotiated to do less work, but the client didn’t want less work. They just wanted to pay less for it. The client ended up unhappy, I ended up crediting them back almost the entire amount, and we both walked away knowing we’d never do business together again.
While I am all for doing good business (my company is about to celebrate 17 years of profitable business next week), I find that it is very difficult to work with a customer who doesn’t see the value they are getting in the work that we provide. If we charge a reasonable amount for a reasonable job, everyone “should” be happy. Luckily, this is the case most of the time. But every now and then…
We’re not car salespeople. We don’t have large margins to play with and we are never sitting on pre-produced goods that we have to shift before the new model comes in. But most of all, we are faced with a huge amount of ultracheap competition, so that if we sell on price, there’s an endless slippery slope waiting for us. That’s not true at least for new cars, because in any particular market the manufacturer’s trade price is there in the background.
So I don’t think having a different attitude to discounts than car salespeople makes us unbusinesslike; we’re in a different kind of business, that’s all.
I’m not dogmatically opposed to discounts, but I don’t calculate a margin for haggling into my offers. I make an honest assessment and that is basically that. What I do do is explain the calculation and if I see things that could be done this way or that, I build options into the offer so that the client can choose. Prices are likely to be more negotiable on writing jobs, where the amount of work really is more elastic, than on translations.
Also, if I know the person I’m dealing with is convinced I’m the best person for the job (and has a good idea why) then I’ll be happy to help them justify the choice up the line in their company. Since they may not have anyone else with comparable skills to make a counteroffer, I can give them the appearance of having negotiated a slightly better deal. But never below what I honestly consider to be a fair price.
I think giving people the feeling that we are consistent and fair in our pricing, rather than making inflated demands when we think we can get away with it, is also a good way of retaining customers; but it’s obviously a different method than is usual in the car trade.
Not sure if this was intented as a reply to my post, but just in case, let me clarify.
You’re right, we’re not car salespeople. But we are salespeople. And we do have a “margin”, except that our “margin” is a bit different from the one the car salespeople use (just like our business and product is different from theirs).
While the car salespeople have to calculate their margins during the production stage and then make sure they actually get their products sold, we calculate our “margin” before even producing anything. It’s difficult to explain this in general terms, since each translator is different and has different needs/preferences.
But to give you an example: the sort of clients I mostly work with have short deadlines. Newsletters, website updates, product updates – stuff with short turn-around times. 3 weeks for 1,000 words? No way! It’s more like 3,000 words in 1 day. If this happens a few days in a row, I’ll inevitably have to take a day off in order to prevent brain overflow. 😉
Now, a new client tells me, “ok, you get more time to do the job, but can you lower your rate a bit?” Then I will obviously be able to do that. More time means I can skip my anti-brain-overflow day and earn the same amount of money even though my rate is slightly lower. I don’t consider this haggling – it’s simply negotiating a deal that keeps both parties happy.
It seems we’re on the same page though, since you mention that you give your clients different options to choose from. That’s basically what I do, too, except that I have these options in my mind rather than presenting them to the client right away. If a client asks for a discount, I offer them one of my alternatives (most of the time, this simply includes a different timeframe or less formatting or different payment terms..) and they can take it or leave it.
And if a client asks for a discount but isn’t willing to make any adjustments to the job’s details at all, then I’ll obviously say no. A discount always involves both parties.
So, to me, the whole discount issue isn’t about saying no to such requests or trying to get away with ridiculously high rates – it’s about taking the client’s needs into account without losing sight of my own.
Just wanted to clear this up. 🙂
Your second post makes a lot more sense to me, precisely because you introduce decent reasons for a bit of price flexibility.
I think what bothered me in your first post were the following details:
1) the comparison to car salesmen. one often asks a car salesman for a few percent off just like that, for no particular reason, because that’s the way car sales work; and you know you’re getting the same product from one dealer as from the other, so you might as well try your luck.
2) the comparison to the cheap plonk one might get free with a pizza order
3) the suggestion that when translator 1 loses business to translator 2 because translator 2 offered a discount, it’s translator 1 who made a mistake. in fact, knowingly undercutting a colleague is regarded in the professional code of conduct of my nearest translators’ association (Universitas, Austria) as a breach of professional ethics. i’m not a member, but i agree with that point.
Ah ok, I figured it might have come across as misleading. By the way, the wine I got from my pizza guy was a good one.. maybe I’m ordering pizza too often.. 😉
But joke aside, regarding 3): This would only work if there were fixed prices. Or, as you said, if the translator actually knows the price of the other translator for a particular project. But this is rarely the case (and I agree that this would be unethical). Most of the time, the client goes to translator A, asks for a quote, then goes to translator B and asks for a quote (in the worst case even lying about the quote from translator A or mentioning the quote of a supposedly super-cheap but non-existent translator C).
So, what I was refering to is a very likely scenario in which a translator quotes a (ridiculously) high rate and refuses discounts on principle. Then another translator comes in and does the job with the same quality but for a lower price because s/he is more flexible, works more effectively, etc. I think this shouldn’t be underestimated nowadays. There are tons of productivity-enhancing options out there (not just referring to CATs). And because of globalization, clients tend to look for cheaper services. Imho, if you’re unable or unwilling to use the former in order to deliver the latter, times will get tough for you.
Unless you’re sitting in a niche, of course, where there’s little competition and your clients have no choice. In that case, you’re lucky. 🙂
Yeah, I kind of prefer doing the kind of jobs where productivity-enhancing things aren’t terribly relevant. If I had to worry about productivity the first thing I’d need to do would be learn to type properly, and I’m afraid I might be a bit old for that 😉 I translate from German into English, and I’m a natural scientist, so I’m often/mostly dealing with people who can produce fairly decent English for more everyday purposes. What I supply is the difference between that and talented writing in English, often for things with an advertising function. The key is taking the time to get inside the message, and to work over the text till it clicks. This means I’m way more expensive than some of the possible options out there. Even if I cut my prices by 50% they’d still have no trouble finding a cheaper way to get “a translation”.
So competition is in the eye of the beholder. For the clients who have understood what I’m trying to do for them, I’m fairly irreplaceable. For the ones who haven’t gotten it yet, I’m expensive. Either way my marketing task is explaining to people why they need certain qualities of English for certain functions. Sometimes I think that’s my main job, and I just happen to get paid for its byproduct, the actual translations.
Since I always give a choice between a rush rate and a non-rush rate to direct clients, my non-rush price already contains a discount. At least that is what I say when I am asked about a discount.
Some of my clients are in a hurry and they will gladly pay for surcharge for that provided that it is a reasonable amount.
But on many projects there is a plenty of time. I like those too because I can start working on them only after I run out of the rush.
For example, today (May 26) I received a translation order, only about 1,500 words, which is due on July 22. A long deadline like this is not common, but a deadline a couple of weeks for 2 or 3 thousand words is not that unusual.
I would estimate that about 30% of my translations are on the rush and about 70% on the non-rush basis.
But this works only with direct customers, of course, mostly patent law firms.
in my point of view. Its all depend on translators himself/herself. What i feel if a translator from a rare language pair or costly language pair like Danish/Swedish. i don’t think client will mind to pay what you charge because of low supply of translators.