Defending Your Prices 2.0

There is a lot to like about the Freelance life, but recurring paycheck anxiety isn’t one of them.  If we’re not waiting to get paid by a client who should have mailed the check 10 days ago, then we’re fretting that the check is rather too small anyway for the amount and quality of work that was done.  But how can one be choosy when the possibility of being replaced is so real? No matter how you earn your living, by 1099 or W2, the employer is in the driver’s seat.

Nevertheless, we Freelance consultants do have some leverage.  While there are thousands of Freelancers willing to accept small hourly rates and project fees, hiring managers in the know realize that the quality of their work is often less than ideal.  As always, you get what you pay for and pay for what you get. Below is a list of selling points that in your next pricing negotiation can help you to justify and defend the premium price I know you are worth:

Expertise

Shopping for B2B services is not like shopping at the old (and sorely missed) Filene’s Basement, where frugal fashionistas could find premier designer label clothing for a fraction of the retail cost.  The caveat was, one had to expect certain shortcomings, like maybe a  missing button or two because one of the infamous button thieves got to the item first (there were apparently several such individuals over the decades).

Inexperienced or less skilled Freelancers may request lower prices for any number of reasons, including perhaps the inability or unwillingness to perform complex assignments.  Some people like to compete on price and there will always be those who respond for whatever reason and that sometimes includes an antipathy toward paying people.  Those who like the low-ball figure should be advised that they are vulnerable to receiving only the bare minimum of work because they’re only paying the bare minimum price.

Make it clear to your prospect that you produce the highest quality work. The prospect can totally hand the project over and trust that you and your team will successfully complete the job as specified, on time and within budget. There will be no need for the client to perform after-the-fact do-overs of your work.  Your base price may be higher, but in the end you save clients time, money and aggravation.  You make them look smart for hiring you.

Dependability

In sum, you will produce what has been asked of you and if there appears to be an obstacle to doing so, you will alert the client as soon as that is recognized and suggest collaborate on making adjustments or creating a Plan B, especially for time-sensitive projects.  You meet deadlines and respect budgets.

Follow-up

One of the biggest mistakes a Freelancer can make when negotiating project or hourly rate pricing is to limit the scope of what you offer solely to the project work as described in the specs.  Make it known to prospects that you are selling an entire service package that includes not only the project spec work, but also includes responsiveness and prompt follow-up; good communication and feedback; efficiency with logistics; and the willingness to ensure that deadlines will be met, even if that means working outside of the 9:00 AM – 5:00 PM, Monday to Friday paradigm.

Showcase your value-added services by ensuring that your project proposal answers all of the standard or required questions and is sent to the client on time.  Respond to client follow-up inquiries quickly, efficiently and cheerfully.

Testimonials

While any confidentiality requests must be respected, revealing selected names on your client list, newsletter or blog statistics, links to published articles and webinars hosted and publicity listings for your noteworthy speaking engagements will provide tangible proof of your reputation and expertise and in that way, justify your pricing.  Depending on your specialty, an online or hard copy portfolio of your work to show to prospective clients is yet another effective way to demonstrate the quality and sophistication of your work and help to explain why you do not price your services at the bargain basement level.

Don’t be shy! Prospective clients want to see what you can do, so that an informed decision can be made.  Build your case, present it well and show them what you are worth.

Thanks for reading,

Kim

Shoppers at Filene’s Basement  (1974)  Photograph courtesy of Nick DeWolf

 

Negotiating 2.0: Taming Hardball Tactics

Freelance consultants are always the little guy.  We possess agile talent and experience that bring value-added to so many mission-critical projects,  but we never control the process.  We value our savvy and survival skills,  but we are alone and vulnerable, truth be told. We navigate and negotiate our way through work assignments and do whatever we can to obtain billable hours.

As we enter into negotiations in pursuit of contract assignments,  prospective clients will sometimes seek to take advantage of us. Passive aggressive withholding is the usual weapon. Prospects are known to play ugly games,  sometimes to bargain down our already quite reasonable fee,  other times to sneak more work into the agreed-upon scope of  project work (mission creep) without paying a supplement for the extra duties.

Negotiation skills are a crucial defensive mechanism that help us to protect our integrity and our income and maintain good client relations as we do. Deepak Malhotra, author of Negotiating the Impossible (2016) and professor of business administration at the Harvard Business School, has a few suggestions that will help us to respond when a prospect or client decides to become an adversary.

Tactic:  “We will never…”

This is an ultimatum. Malhotra recommends that one should simply ignore ultimatums because he’s found that they are usually NOT deal breakers. Ultimatums are frequently issued in the heat of emotion, or as a tactic to intimidate or control.

Avoid acknowledging the ultimatum and you allow the person who put it out there to slide away from it down the road,  because you never started a discussion about it. The other party will not lose face should they contemplate surrendering their tough position.

If ignoring the ultimatum is impossible, then try to reframe the statement in less harsh language that gives the other party an out. “It may be difficult,  I understand…” or “It could be costly (or time consuming or put you into unfamiliar territory)…”.

Tactic “Oh, and we also will want…”

The other party may have a laundry list of add-ons and conditions that delay agreement. Malhotra observes that there are a couple of likely motivations for this behavior. One, they sense that doing the deal is important to you and they aim to exploit that.  Alternatively, the conditions might possibly be meaningful to them in terms of obtaining satisfactory ROI.

Malhotra recommends that you put a cap on the demands by stating that if something is truly important,  you would like to understand why and that you will work with them to accommodate any legitimate concerns or objectives. However, you are not willing to negotiate an individual element so late in the negotiation process.

If adjustments are critical, he says, then tactfully make it known that it will be necessary to propose and discuss concessions that they would be willing to make in exchange. The other party must be willing to give some easement and flexibility on issues of value to you as well.

Tactic “Great– I’ll confirm this with my boss.”

Malhotra advises that first of all, make sure you are negotiating with the person who can really approve and set into motion the terms of the negotiated agreement. Sometimes, unfortunately, the other party will not be transparent.  Negotiations can be handed off to a gatekeeper while the real authority remains behind the scenes.

To head off this possibility,  ask clarifying questions of the other party  before you get too far along into the negotiations.  Inquire about who will need to sign off on or otherwise sanction the deal that is struck. Ask what factors might speed up or slow down the process. Learning the process of the one across the table shows you are someone who respects the organization and allows you to set expectations for the outcome you can achieve. Do you want to invest time talking to these people, or should you walk away and find a potentially better prospect?

Thanks for reading

Kim

Negotiating Tips

“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.

Practice

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.

Walk away

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,

Kim

Because I Said So

Oh good,  you’re back.  I guess that means you’re still in business.  After last week’s posting about the shrinking numbers and dismal prospects for Freelancers,  I thought you might have decided to cash in your chips and interview for a job at Kinko’s…

Well,  since we’re still in the game,  let’s make the best of it.  Making the best of it definitely entails getting people to do what we want them to do,  maybe even when we want them to do it.  Wouldn’t that be fantastic?  I daydream about this kind of stuff all the time–especially when I am patiently waiting for a client to pay me what is owed.  Even more so when I am patiently waiting for two clients to pay me what is owed (like now).

Getting others to do what we want is all about the art of persuasion.  If we could get even one quarter of our clients and prospects to do what we want,  we’d all be driving Jaguars!

While browsing in a bookstore recently,  I happened upon an interesting book by Chris St. Hilaire,  who is a jury selection consultant and author of  “27 Powers of Persuasion:  Simple Strategies to Seduce Audiences & Win Allies” (2010).

In his book,  St. Hilaire points out that true persuasion is not about arm-twisting or even outmaneuvering your opponent.  Rather,  true persuasion is about creating consensus and unity of purpose.  The author recommends four key strategies that will improve your powers of persuasion,  applicable to both your business and personal life:

Emphasize the goal to bring all parties to agreement

When we go into a client meeting,  we tend to assume that all parties are on the same page.  Not so,  says St. Hilaire.  It is common for people to talk past one another,  wrapped in their inaccurate assumptions,  failing to hear what the other side has said,  failing to grasp important meanings and significance.

Negotiation failure that leads to a deal-breaker can result from incomplete or sloppy communication.  It could even appear that the other party has an entirely different goal for the project at hand.  This is a Level One misunderstanding that nevertheless has the power to derail you.  Avoid disappointment by briefly summarizing your goals upfront.  Ensure that the other party knows why you are there and you will move closer to getting what you want.

Use numbers to make talking points more powerful

Americans love to quantify things.  Numbers help people to define and measure both success and failure.  Judiciously inject a statistic or two (don’t overload) into your presentation and help your client or prospect to put your goal into perspective,  help him/her to visualize and compare your features and benefits to other available options and lay the groundwork for the acceptance of your proposal,  i.e.,  your goal.

Third party validation can bring others to your way of thinking

Presenting the expert opinion of a trusted and respected source who is presumed to be neutral and objective can make your proposal  look like the gold standard.  People are often reluctant to contradict the practices and opinions of those who are known to be smart and influential.  Do what you can to make it appear that your goals are on the side of the angels.

Silence can be your most effective technique

Learn to get comfortable with silence in a negotiating/selling situation.  According to St. Hilaire,  silence allows you to control a room without seeming aggressive.  The other party will almost always become uncomfortable and nervous and blurt out what they really think,  fear,  want,  or plan to do. 

Even if you don’t receive the ideal answer,  hidden objections will come to light,  giving you an opportunity to acknowledge and resolve them.  That greatly improves the odds for your success.

Thanks for reading,

Kim