Scott Butcher‘s recent Engineering News-Record blog post — Work without pay: Good for architects, engineers and contractors — addresses the challenging question: Should you discount heavily your services, or even give them away for free, to win new clients?
Most of the authorities cited by Butcher provide an emphatic “no” , but there are exceptions. Modest “quick hit” conceptual designs (without complete drawings) may be okay to demonstrate capacity and vision, and in some cases, bidding low or offering free services may provide the way to break into a new market where you don’t have the recent credentials or experiences. And there is at least one observation about the plight of an architectural practice during a recession:
Although there are certainly firms out there employing the loss leader strategy, some have had more success than others. In the height of the Great Recession, firms were using this approach as a stopgap just to “keep people busy” and trying to mitigate their losses – losing $20,000 on a project seemed like the better course of action than losing $120,000 from having staff sitting around, totally unbillable.