Day 10/21 - Stop Negotiating

So recently, I was having a conversation with a fellow entrepreneur about how frustrating it can get sometimes with some clients when it comes to negotiating our fees.

I’m certain all entrepreneurs out there have at some point endured this struggle.

Where a prospective client upon recommendation asks you to quote for your work.

You send in a quote. They revert with a request for a 50% discount. You offer a 5% discount.

And then for a day or two or weeks. proceed to haggle like you’re at Marikiti auctioning tomatoes. By the time you come to an agreement, you’re exhausted with the back and forth and concede to a hefty 30% discount. Maybe, because, you need the money, or the client or both.

Or…you’re just a poor negotiator.

In my post yesterday, I said I’d write about this another day. That day is today.

This is a topic that has weighed heavy, the last couple of weeks.

For starters, entrepreneurship (not always) can be rough and tough. Therefore, many entrepreneurs depending on what stage of development there are in, will take on jobs and contracts that they have no business taking on in the first place.

To be fair. I do understand that this is easier said than done, even for me with some skin in the game.

I too have discovered too late, that I failed to effectively communicate to a client, what my quote on a particular job actually represented, which is usually:

• My time (actual man hours to complete the work),
• My project overheads (actual costs to do specific tasks, inclusive fees for tools to complete tasks or if working with a team what I pay them to help get the job done
• My consulting experience (17 years' worth). Whatever that is for you. Your years of experience, skills, level of expertise, all those 1,000 hours you spent learning to do what they can’t do on their own, etc.
• My unique wisdom in my field and elevated perspective and professionalism drawn from - you guessed it - my experience.

Hence, I am not posturing.

I’ve just learnt the hard way that if you are a poor negotiator in your entrepreneurial career, you will either stagnate or start delivering sloppy work due to lack of motivation and the associated stresses of doing work that doesn’t make financial business sense.

My two cents (sense).

Avoid negotiating with clients. If you can’t avoid, reduce it to a minimum and never go below your cost of production. Instead, always communicate VALUE.

If they can’t see your value, they are not your client.

A story is told of the famous artist Pablo Picasso.

One day he is seated at his favourite cafe having coffee or something. A lady sees him, walks up to him and politely asks: “Monsieur, pouvez-vous me dessiner?”

In English, “Sir, could you draw me?”

Picasso kindly obliges, takes a piece of paper and pencil and in effortless style, produces a perfect sketch.

It takes him exactly 3 minutes; after which, he hands it to her, shares the value of the drawing, and charges her an exorbitant price for the masterpiece.

The lady is appalled by the price (similar to how your clients are appalled or pretend to be appalled when they see your initial fee notes. Sound familiar?)

“Mais Monsieur, vous n'avez pris que trois minutes pour dessiner ?a!”

Which translates to, “But Sir, you only took 3 minutes to draw this!”

Picasso calmly and unblinking responds: “Ah! But no Madam! It took me 40 years to learn how to get to the point I could create this kind of artwork in 3 minutes!”

If you get it, say: “I get it Lilian!”.

People, who are masters of their craft don’t have to negotiate; sportsmen like Eliud Kipchoge, or Lewis Hamilton. Artists like Beyoncé, who started singing at 9 years. They learnt to collapse time into value over decades by honing their craft so well that they could one day command exorbitant fees.

It would be bizarre to not expect to pay premium to watch them ‘perform’.

I mean some Nairobians I know, in June paid Ksh 30,000 ($250) to watch an hour-long concert performed by Boyz II Men under a run-of-the-mill tent, with mediocre sound:)

I don’t recall hearing anyone negotiate fees.

So, the next time you meet a client who doesn’t (want to) SEE your value and suggests abysmal discounts; be like Picasso.

With French flair, remind them that your fee note is not just about your output, or the quality of work anticipated, but the numerous lessons gathered in the past however many years, that disintermediates them from the same struggle today.

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