“What’s your best price?”
“That’s too expensive, we can’t budget that amount.”
“Last year I hired one of your competitors to do the same thing for half your price.”
Freelancers, business owners and of course salespeople are confronted with the above statements on a regular basis. Customers are always angling to get the goodies on the cheap. We need the sale, we need the work because we need to get paid and that puts us in a vulnerable position. How can we command what we consider to be a fair sum for the top-drawer services that we deliver? To get what we feel is our due, it’s imperative that we sharpen our negotiation skills.
Many people are afraid to negotiate. But all of life is negotiation, if you think about it. All relationships involve give and take, do they not? Life is all about the exchange of what is valuable: time, love, expertise, friendship, products and services, money. To frame the process of negotiation in that light is to de-mystify it, take away the fear and encourage one to learn to become more adept. The tactics listed here will help:
The cards you hold
First, understand the value of what you bring to the table. Do your homework and investigate your competitive advantages. How urgent is the need for what you’re selling? Who else can match or possibly exceed you in quality, expertise, price and/or timing?
The person with the best data often triumphs, so learn as much as you can about the prospect and any competitors. If possible, figure out if the prospect has the ability to do the project in-house. Ask whether this project been done before and if so, who did the work? While you’re gathering intelligence, try to figure out whether they might be inclined to cancel the job if they can’t get what they want for cheap money.
Identify what the prospect wants, why they want it and what they gain by having it, or lose by not having it. If a lot is on the line, that strengthens your hand and vastly improves your chance of getting paid what you want, depending on who you’re competing against.
Re: competitors, find out who they are and if a prior relationship exists and why the prospect didn’t call that company/Freelancer in again? Are they in search of something else, or is it required that a certain number of vendors be interviewed and that’s why you’ve been invited to bid? A vendor who’s done business with the prospect previously has a huge advantage, but if you can make a good case, it’s possible to scoop the business. Maybe the administrative assistant can fill you in on a few things, so be friendly and diplomatically ask a couple of questions.
Hone your abilities and your confidence by incorporating negotiation into your everyday life. You’re liable to be pleasantly surprised by the receipt of a few unexpected benefits. When making large purchases, bring your checkbook. Ask the store clerk (who will have to consult the manager) what the discount is when you pay by check rather than by credit card (merchant credit card processing fees cost more money).
If you visit a flea market or antiques store, ask for 20% off the marked price. Again, bring your checkbook and sweeten the deal by allowing the merchant to avoid the credit card processing fee and pass the savings onto you. Even when you’re paying by credit card, requesting a 10% – 20% discount on original art, furs and high-end jewelry allows the merchant to move product that might otherwise languish and saves you money. You’ll be so proud of yourself!
Be confident and pleasant when you ask for your discount. Ask for a little more than what you expect to receive (your prospect will do that as well, when squeezing you for a lower fee) and expect to wind up somewhere in the middle. Get comfortable with silence when negotiating. Make an offer or respond to the client with a counter-offer and then shut up and wait for the response. You may go back and forth a bit, but hang in there and don’t be afraid to do a little horse trading.
When entering a sales negotiation, always have your minimum standards in mind and adhere to them. Be prepared to leave the business on the table if you feel the prospect is out to exploit you. It won’t help your cash flow, but you’ll be able to hold your head high and become even more savvy as you successfully sell to the next prospect.
Thanks for reading,