Do you ever find yourself in tension with a prospective client over what your fees will be?
I’ve seen consultants make the mistake of viewing negotiation over fees as a win/lose, adversarial process.
In an illuminating blog post, small business advisor Andy Rockwood pointed out that the objective of a price negotiation is agreement:
“A negotiation is a fact-finding mission aimed at uncovering what the other side is trying to accomplish. To do that, a skilled negotiator not only needs to ask smart, insightful questions, but also needs to listen intently to the answers.
“It’s important to understand what the other side is trying to do without getting hung up on how they’re trying to do it. The “how” question is where the negotiating comes in. If you clearly understand where they are trying to go, you can offer alternative ways for them to get there . . . ways that work for both of you. For instance, let’s say you’re a supplier to a manufacturing company and they’re trying to get you to lower your price by 10%. But through your clever questioning, you know their broader goal is to lower their manufacturing cost. Beating you up over your price is simply the tactic they’re using to do that. So you counter their demand for a reduced price by saying, “What if we can prove to you that by using our product, your equipment will be able to run faster, with less waste, and save you 15%?” The trick is to keep everyone flexible and avoid letting anyone take a hard position.”
I’ve come to think of discussions about scope and fees as Fee Discovery—finding a combination of these that will work for both you and your client.
How to do that is central to my Rainwerks educational program, Pricing to Prosper. I encourage you to view my free video series, The Right Price. You can gain access by visiting https://rainwerks.com/pricing-to-prosper-opt-in, or call us at (866) 204-0432 to learn more.