9 Ways to Negotiate Better Business Opportunities
Russell Pearson CSP
Hall of Fame Inductee | Follow for Consulting Business Tips | Host of the Your Consulting Business Podcast – Supporting Topic Experts to Forge Successful Consulting Businesses.
If you want to make client engagement easier and more profitable, here are 9 tactics when negotiating your consulting services.
1. Design Together
Whether you’re closing a deal or designing the scope, if you design the price, product, outcomes, roadmap, or any number of elements without client involvement, you’re designing on a flawed foundation.
The Successful consultant will always look for ways to design WITH the client rather than without them. Collaboration creates ownership and removes barriers. Stop trying to be the smartest person in the room and realise that two heads (especially if they have approval power) are always better than one.?
2. Know Your Options?
What are the different areas of negotiation and compromise on your deal? Well, just about everything. From how a project gets delivered to how you get paid, there are an infinite number of things that you can negotiate when you’re at the table. The key is knowing as many as possible before you are in the negotiation.
Here are some to get you started. The length of time to deliver, added value & bonuses, how they will pay, the structure of the offer (who gets what), the delivery method, knowing what you are willing to give away, Can you build in referrals and testimonials, length of the contract, result based fees and any number of other things that are not just monetary. Make a list and understand the common areas for your sector. Know your options before you hit the negotiation table.
3. Don’t Tell ‘em How
Often during a design conversation, there is an urge from the consultant to define the details of HOW they will deliver. It’s actually rarely initiated by the client. Much of the time the HOW causes headaches down the track. Lack of flexibility, like the ability to complete the project faster without any penalties to the fee is one of these.
Most consultants can engage at a high level and get paid for the design, scoping, and strategy. If you go into too much detail at the engagement you can often design yourself out of these opportunities or lose the gig altogether.
4. Don’t Send Lonely Proposals
Sending a proposal out into the world alone is a kind to abuse. Why would you send that poor fragile little proposal out, unchaperoned, to a group of strangers who are going to treat it like trash?!!! WHY?!!!!??
Never do this again. Always go with the proposal even if it’s online. Walk prospective clients through the proposal. Address any concerns there WITH the proposal and make any changes there WITH the client.
I’ve been in those rooms with a bunch of lonely proposals. Some are dismissed because of formatting?Others because the reader read it wrong and other readers will just go to the pricing page, expecting that each proposal is pretty much the same as the last.?
For some businesses, it’s a numbers game and procurement is what it’s all about. But for the Consultant who requires a position of Trusted Advisor to do effective work…This is not the way. Do not send lonely proposals.
5. Don’t drop the Price - Redesign the Offer
If you give discounts to get projects across the line without gaining something in return you are creating a precedent for future work. Clients will stop believing your first price. The next time you arrive at the negotiation table this client knows your starting price is actually 20% lower than the asking price.
If the client wants 20% less then the process is to redesign the project or service so that it makes sense that it’s 20% less. Sometimes that’s removing something from the scope. At other times it’s so that you can engage more favourable delivery terms. Son’t drop the price. Redesign the offer.?
6. Square Pegs Don’t Fit in Round Holes
This is really a lesson for life. Square pegs don’t fit in round holes…it’s painful. Now that we’ve got that out of the way…this point is about trying to offer productised service as effective solutions to every problem.
Stop trying to offer products and services that do not fit. At best, people won’t say YES. At worst, they will say YES and the result will be a poor outcome. This comes back to my original point of design together. Design with the client to ensure you’re designing the best solution for the problem at hand, rather than the best solution that you currently have.
7. Anchor the Opportunity
Understand what your opportunity is comparable to. Are you saving the client time? how much time? What is the value of that time? What else can you compare it to? Will adding your solution save them 3 team members…what is the cost of this saving? Or will this service prevent something bad from happening? What is that worth?
You can also compare against your own past projects. We’ve done similar projects to this that were about $150,000 but we may be able to get this under $100,000. A big anchor discussed first makes anything smaller more affordable and reasonable. Anchors show value and are an important step for others to recognise that value too.
8. What Your Value is Not Necessarily What They Value?
You may believe that consultants charge like a bull, but in my experience, most consultants undervalue their advice. Usually, because they sell on hours rather than the value of the specific outcome. What’s the outcome worth? Also, what is time worth? Value is not always measured in dollars.
At other times I see some consultants over estimating the value of the model, program or service they have created. The value to the client is what matters, so understanding their view on value is crucial. The simple solution here is to stop guessing at the value you’re providing and start asking. A conversation that can be summed up in the words “What is the value of solving this problem?” will reveal a lot about how you should be pricing.?
9. No is an Option
As a successful consultant, you have choices. One of those choices is who you work with and the other is how you work. If the terms of your client’s project do not meet the requirements of you as a business operator, you can always so NO.
In fact, saying no to opportunities can be one of the most freeing things you can do as a business owner. Just make sure you’re saying No for the right reasons and that your ego is not getting in the way of you doing some great work. Either way, remember, No is always an option.
These are just some of the elements that go into a successful consulting engagement. Negotiation is a conversation. We do it every day in multiple areas of our life. The better you get at conversational design the better you become at running your business, activating your teams, and dare I say it…the dirty S word…Sales. If you want to engage with more clients doing work you love. The art of conversation is the key to your success.
Now if you made it this far...Thank you for reading. I often wonder who reads and who gets value...not always the same person, I know.
But if you did reach this point, I would love you to leave a comment. Let me know which point was most useful or relevant to you. Or leave a comment about anything really...it could be the name of your cat or what you ate for lunch. Leaving a comment tells me you were here. And that's good to know.
?? Stay Passionate!
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Russell Pearson?is the founder of the FORGE. A Business Program for Solo Consultants, Advisors, and Specialist Service Providers who want Better Clients & Higher Fees.
You can contact him directly here:?https://www.dhirubhai.net/in/russell-pearson/?