I’m not a fan of Mates Rates. The concept just doesn't sit right with me. Even just hearing the two words gives me a horrible feeling in the pit of my stomach.
I'm sure you're all familiar with the concept Mates Rates. It’s when friends or family expect a cheaper price just because they know you. Now, I'm sure we all know that often friends and family are the last people to support you in your business. They'll quite happily pay full price for a celebrity's product, such as a perfume, without question but they expect you to do a discount for them even though your profit margins are slimmer.
The whole reason why I don't like this concept is because of the effect that it has on some business owner’s mindsets. As a money awareness coach fighting to help people overcome their money blocks, I don’t want any business owner subconsciously hearing the message that their products or services are not worth paying full price for.
It’s like your friend or family member saying;
I don't value your products.
I don't value your knowledge.
I don't value your experience.
I don't value your time.
This can have a knock-on effect because you then start to doubt your prices. Your confidence is knocked, and you start discounting for other people as well because you don't think that you should be charging the prices that you do. That means that you won't be making the profit that you want, which then in turn makes you feel crap.
Downward spiral.
I would say there's only three times that this sort of discounting is acceptable.
Number one
If they are giving you an equally discounted rate for their products or services in return. It's kind of ‘You scratch my back, I'll scratch yours’. However, this comes with a caveat. It can be problematic if one side of the transaction is more generous than the other, leaving one party feeling resentful.
Number two
If they're struggling a bit and you know that they can't afford to pay full price but you know, in future, they'll come back they'll buy your products or services again and they will pay full price. They just happen to be struggling a bit at the moment. By all means, give them a little discount. It'll make them feel better, and probably make you feel better.
Number Three
As long as you are not discounting to a point where you're making no profit or even worse, you're out of pocket.
So remember your worth and make sure that you are only discounting if it makes you feel good and if it works for your business. If you get a funny feeling in the pit of your stomach when somebody asks you for a ‘deal’, that is your intuition telling you not to do it. Go with that feeling. We all have bills to pay, and giving someone a discount when you can’t afford to do so is like giving away your oxygen mask on a plane!
And for anybody reading this, who asks for ‘Mate’s Rates’ from their friends. Please don't do it. It's like you saying to them ‘I don't value you’. If they offer you a discount, that’s different, but putting them on the spot is not on.
Let me know your thoughts in the comments. Agree or disagree, I’d love to hear all points of view.
Claire Jones 31 w
Exactly! It especially riles me when the person asking for a discount can actually afford to pay full price. We have to support our small businesses.