The Consequences of Grandfathering Your Prices
In a saturated market, it’s harder than ever for Black creators to break through and stand out from the crowd. Even though there’s so much content being produced every day, Black creatives are still struggling to make money from their work.
With such low representation in media and tech, the number of Black people earning a living from creative work is even smaller than it seems. These challenges don’t just stem from the lack of financial opportunities available to Black creatives–they also have to do with how we as creators approach our craft. If you want your art to be taken seriously, you need to invest time and money into developing your skill set before releasing new content.
Otherwise, if you release something as a hobby instead of as a business, that “piece of art” will never be able to sustain itself financially. Grandfathering prices is one way creatives can try and increase their revenue stream without having to compromise on quality.
Grandfathering is a practice where businesses reduce their prices once they have been in operation for a certain amount of time. Because grandfathered pricing is often one-size-fits-all, there’s often little incentive for businesses to keep up with the latest trends in pricing.
As a freelancer or small business owner, you can be tempted to grandfather prices for clients. However, there are plenty of reasons why grandfathered pricing isn’t always the best idea for black content creators.
People Don’t Always Know What They Want
Many people believe that if you offer a lower price for your services, you must be eager to take the client’s money at any cost. While you should try to make your business profitable, the bottom line is that you need to know your client’s needs and expectations.
If you’re an accountant or a lawyer who has been offering your services at a certain price for years and years, you can probably assume that your clients prefer this price. However, as a black-owned business owner, you have a duty to your community to make sure you’re pricing your services appropriately.
Grandfathering Could Be Disrespectful and Harm Your Reputation
A reputation is hard to build and even harder to maintain. You have to earn people’s respect if you want them to remain loyal to your business. Granted, you don’t have to be perfect, and in some cases, discounts might be the best way to build new business.
However, you have to be careful that you don’t alienate your existing clients and damage your reputation. If you have clients who are loyal to you because of your pricing and service quality, a grandfathered discount might disrespect them and make them less likely to purchase from you again.
People Are More Diverse Now Than When You Started Your Business
Grandfathered pricing might be more common in the corporate world, but you don’t want to do the same thing with your business if you’re a black entrepreneur. When you start a new business, it’s natural that you want to grow it and offer more services to clients.
However, with each additional service, you could unintentionally lower your prices. During this phase, your prices can’t be grandfathered and should be based on current market rates.
You also want to make sure you’re investing in your business to grow it further. If you’re investing in increasing your team and expanding your offer, but you’re also slashing your prices, you’re doing more harm than good.
Black Content Creators Need to Build Trust With New Customers
When you’re a new business, it’s natural to feel vulnerable and unsure. You might be worried that your early days are going to be rocky, and you decide to cut your prices in order to save money.
As a black-owned business, you have an extra responsibility to make sure you’re building trust and value in your clients. No matter what your industry is, the best way to do this is to offer high-quality content.
This doesn’t mean that you have to be perfect, but you need to make sure that what you’re offering is at a certain standard. If you have clients who are happy to pay a certain price because of your reputation and service quality, keep this in mind when pricing your services.
While grandfathering prices might seem like a good idea at the time, you could end up alienating your current clients. By slashing your prices, you might cause them to lose trust in your business. This can make it harder for them to recommend you to friends and family. As a result, it could make it harder for you to build an audience and get referrals from satisfied customers.
Instead of making these kinds of decisions based on price alone, consider what kind of person would benefit from working with you. If you focus on building long-term relationships with your clients, they will be more likely to recommend you to their friends and family.
Grandfathered Pricing is Risky for New Businesses
Grandfathered pricing is risky for many reasons that we’ve outlined above. If you’re a new business and you decide to slash your prices, you might damage your reputation and alienate your current clients.
In addition, if they know that you’re committed to providing high-quality work, they’ll be more likely to continue working with you in the future.
The Bottom Line
Grandfathered pricing is popular in the corporate world, but it’s not the best idea for black-owned businesses.
Ultimately, the best way to succeed in this industry is to keep learning, grow as a creator, and push yourself to create higher-quality content. Don’t undervalue the content you’re making and make sure your prices reflect your value.
Always In Your Corner,
The Content Queens
