Negotiations always give me the jitters.
Am I proposing a fair deal? Am I about to get swindled? Should I look elsewhere? Am I going to lose this project? Is this client going to be more stress than they’re worth?
I think partly that’s because I’ve never been good at reading people; maybe I’m too honest, naive, or just plain oblivious.
But I also believe it’s because the art of negotiation is rarely taught in school (no matter what degree you pursue), and few are willing to share their precious secrets lest you get the best of them or realize just how long they’ve been masterfully playing you.
As an solopreneur, though, negotiation is a BIG part of our livelihood. Whether we’re buying or selling, the ability to get a good deal can make or break our business.
As Bianca put it, “Negotiate your little toosh off.”
And she’s right.
So how do you negotiate with clients like a pro when your insides are squirming? Here are a few big ways to be confident and collected…and more importantly, come out with a good deal.
Don’t forget! No matter your final terms, they belong in your contract. Make sure you’ve got everything in writing and agreed upon with signatures and dates.
#1: Know your boundaries
That’s right: know where your boundaries are before you enter the negotiation.
- Ideally, what do you want to make/get out of this deal?
- What’s the absolute least you’ll accept for this project (or most you’ll pay)?
- What does this project look like stripped down to the bare bones version (and how much does it cost?)
- What compromises are you willing to present or make?
- Would you be willing to accept a trade instead of money?
- At what point are you going to walk away from the deal?
Good negotiators know people in general dislike negotiating.
That’s why they always try to negotiate – and nail down terms – with you in real-time (on the phone, in person, or via video chat) because they know they’re far more likely to get what they want.
Don’t believe me? Try walking off the lot once a car salesman starts talking to you.
It’s also why you can’t cancel a TV or cell phone package without the hassle of talking to a real person while nearly everything else is done via the annoying automated call service.
That’s because it’s hard for human beings to handle the logistics and emotion of negotiation simultaneously.
So when you go in armed with boundaries clearly defined in your mind, you take the wind right out of their sails (sales?).
Now it’s not a matter of you making difficult choices on the spot (you’ve already gone through that emotional mess beforehand). You know what’s acceptable; it’s just a matter of matching their requests to your pre-defined boundaries and finding something that fits.
Pro tip! It’s just a matter of time until you find yourself in a situation you didn’t anticipate and therefore don’t have boundaries for. In those instances, explain politely but firmly that you’ll have to go over the numbers and get back to them.
(You’re probably going to have to repeat yourself more than once, but stick to your guns.)
“Jim, this option has real possibilities, but I’m going to have to go over these new parameters to estimate my time accurately before I can commit to this price.”
“We really need to make a decision. We want to get this project underway.”
“I understand we’re under a tight deadline here, but I don’t want to have to tack on extra charges later because I didn’t do my homework on this up front.”
“We might have to go with someone else if you can’t give us an answer now.”
“If I have to commit to this now, the answer is no. But if you can give me just a few hours to go over what we’ve discussed, we might have ourselves a deal today.”
#2: Do your research
Essentially, you want to arm yourself with proof that the offer you made (or are about to make) is realistic and fair.
- Ask a peer what they’d estimate for the project
- Contact your competition and get a quote from them
- Compare what you’ve charged for similar projects
- View pricing/reviews/testimonials online for similar services
If you find that your offer is significantly different from others you receive, see if there’s a good explanation.
“This big design agency charges double for the same product because they’ve got a lot of overhead to pay for.”
Or, “Sure, you can get a hefty discount from a cheap online service, but will you get a quality product and long-term support?”
“I can purchase X for $Y online, but I’d prefer to support a local business. Can you toss in Z and we’ll call it a deal?”
Or, “If we pay for the year up front, can we get a discount?”
Pro tip! When you start to feel weird about asking for a discount, remember this mantra:
The answer is always “no” until you ask.
#3: Negotiate up, not down
The best negotiators work furiously not to lose ground; that is, they never want to bring the price point down. After all, a sale for $600 almost always beats a sale for $200.
Try these four methods to negotiate your clients up:
The Freebie Deal
Instead of entertaining the idea of lowering the price, throw something in for free to sweeten the deal.
“Selma, I know you’re worried about the cost of a logo redesign. It’s a big expense for your business. What if I threw in the business cards – redesign and printing of up to 500 cards – for free?”
Obviously, the freebie has to be worth it from your vantage point and theirs, but if it can prevent you from stripping a project down, you still come out ahead.
The Package Deal
Offer a package deal on services that typically go together, such as a website and SEO, a logo and business collateral, or posters and handouts. Then discount the package.
“You definitely need SEO to rank in the search engines. I can package a website and SEO together. Instead of $1200 for a website now and $600 for SEO optimization in 6 months, you can get a website with SEO now for just $1600. That’s a $200 savings.”
In this deal, you’re offering a discount in exchange for their promise to do a series of work over a duration of time. This works particularly well for repeat projects.
Example: Let’s say your client rotates themes and needs posters, table tents, fliers, and banners created for each new theme, and last year they ordered a new theme quarterly.
If they commit to 6 themes this year, for example, offer a good discount.
The trick with this one is what to do if they don’t meet their quota. You certainly don’t want to offer a great rate for nothing.
My favorite option is to offer a heavy discount for the final project in the commitment. This ensures that you actually get to the final project.
In our example above, instead of charging less for each project, I’d heavily discount the 6th and final project (or offer the design for free, depending on the client/deal).
The other option, especially if they’re cash-strapped at the beginning, is to create the stipulation that they will be charged the discounted amount at the end of the year if they don’t uphold their end of the bargain.
Be careful, though…you’re more likely to find grumpy clients (or ones that simply can’t afford to pay) via this method. Be sure to periodically remind clients that get behind before surprising them with an extra bill at the end.
The Cash Up Front Discount
With services or repeat payments, always offer a discount for paying annually (or whatever makes sense) up front. This provides a measure of job security for you – they’re likely committed for the duration of their payment – and you don’t have to go chasing them down each month for payment.
Ideally, we’d always negotiate up. But some clients just don’t have the money regardless of what you throw at them. In these cases, check out this post, identify your boundaries, and stick to them.
#4: Understand the barrier
You can’t negotiate with clients effectively without this knowledge. Find out what’s preventing your client from accepting the deal.
- Do they feel they’re not getting (or going to get) their money’s worth?
- Are they unsure they need your product/service?
- Do they simply not have enough money to purchase your product/service?
- Are they afraid to commit to spending that much money?
- Do they not trust you, or are you making them uncomfortable in the deal? (e.g. Are you being a pushy, slimy used car salesman?)
Once you know what their reservations are, you can assuage their fears, or, if it’s truly not a good fit, point them in the right direction.
#5: Be fair (don’t get greedy)
Most importantly in all negotiations, be fair. If both you and your client (or vendor) walk away satisfied, be happy – you’ve negotiated a good deal.
Sure, it’s okay to get a really good deal and feel that you’ve come out on top, but don’t get greedy.
Even if you know you can totally pwn someone, give them a decent deal. After all, there’s someone out there that can swindle you, too, and when that person realizes they’ve been had, your reputation is in danger of taking a big hit.
I’m no negotiations expert; what have I missed? Share your best tips in the comments.
PS – Yes, I did say pwn, and no, it’s not a typo. This girl is a gamer. 🙂
Keep the conversation going...
Over 10,000 of us are having daily conversations over in our free Facebook group and we'd love to see you there. Join us!