We receive numerous calls and emails regarding bargaining. Consultants ask us to help with strategies and methods to bargain and strike a deal with a client. One thing they fail to understand is that once they give in to bargaining and settle for a lesser price than their original consulting fees, they’ve given the client access to a diamond mine. The clients won’t stop with this and in order to protect your deal, you’ll keep on doing them favors which you could’ve avoided in the first place.
SMEs, Startups and mid-level organizations are generally prone to this problem. They have limited number of clients and they go beyond their limits to satisfy them even if that means to reduce their consulting price (which is massively detrimental in the long run). These clients are mostly small companies who have a tendency to haggle with price almost everywhere. They just cannot agree to the price that you have set and would try to reduce it to as much as possible (best is to give to them for free).
Now, how to NOT give in to bargaining and decrease your price point? Here are a few tips that will be helpful to you.
- Don’t offer discounts without a quid pro quo. Once you lower your price, they’ll literally start asking for concessions for future projects. Don’t let that happen.
- Have the guts to say, “No”. There’s no harm in walking out of a deal. You have set a price. You also need to pay your employees and we’re assuming that’s quite a hefty cost to the company. So, don’t budge out on your fees.
- Focus should be on ROI. If your client’s a bit conservative on the price, show them what ROI they can get for that cost. Provide them with case studies and evidences of previous successful projects.
- Put the ball in their court. Ask them whether they concede their price on necessities like insurances, refrigerators, vehicles, commissions, etc. If they do, what and how much do they gain from that: advance payments, bulk business, referring more clients? Ask them if you two could work out a deal like the ones they mention.
- Sometimes, it so happens that the client wants a mental satisfaction of getting more for less. What you can do is that, you can offer them something for free like a book that one of your company leaders has written a free subscription to your VIP newsletter or may be a complimentary 3 month access to your online course. These non-monetary concessions often help you to stick to your price and yet strike a deal.
- Always have multiple options. If your client says, “I love the premium package but the price is high”, reply them with, “That’s why we have the Medium package for your convenience.”
- Discontinue if you’re not paid. Clients often to delay payments or try to squeeze out as much work as possible on paying a small fee. Either get advance payments or give them a window to complete the payment and after that stop working until the payment is being made.
- If you’re working for an established firm, always communicate with the decision maker. Don’t negotiate with a subordinate who’s trying to renegotiate the terms of the deal or may be bring down the fees. In these cases, just inform the decision maker and inform him/her that you had a deal and all terms of it are final and unchangeable. Never get into an argument or a debate with that subordinate. It might potentially hamper the relationship with your client.