by Julie Knight
Do you always reduce your rate when clients say they have a limited budget? Do you accept every client’s boilerplate contract without question?
Those of us not particularly skilled in this area appreciated hearing tips from contract and negotiations expert Sandy Shepard, Esq., who recently spoke at our SF IABC Independent Communicators’ Roundtable meeting.
Here are just a few of the helpful tips offered by Sandy, president and founder of legal and business consulting firm Good Solutions, Inc.:
* Discuss your services before discussing your rate. You want your client to be clear about your valuable services first…and why another contractor just won’t do. Remember, “Think of yourself as premium Himalayan pink salt, not ordinary table salt.”
* Emphasize how your services will benefit the client. Demonstrate how you can immediately positively affect the client’s bottom line, make that person look great, increase productivity, eliminate stress-related work or some other key value.
* Name drop. Be sure to mention any recommendations you’ve received from the client’s colleagues or other industry professionals. Share testimonials, mention repeat business, and reference recommendations from the client’s trade group.
* Ask, then “shut up.” When it is time for rate negotiations, lead with the question, “What ballpark budget do you have in mind?” Then, let them name the range.
* Pad your initial offer. Some folks just like to haggle. This way you have something to give up.
* Tie a price decrease to a services decrease. Be clear that your proposal is tied to the rate indicated. Ask what part of the services they want to delete if they want a lower rate. This often will help them look to other budgets to get all you have to offer. And be sure you know what you will excise from the proposal for specific price decreases. What’s worth what?
* If you are asked to give something up, make sure you get something in return. If the client is paying for your travel, reduce that before lowering your fee. Offer to give services later, at a discount, for full price now (be sure that next set of services is time-ended.) For non-profits, you can ask to have a table at their next big charity gala. You might be allowed to hand out your collateral to participants, if you work with individuals.
* State that you must review an offer, proposal or contract with your lawyer. This not only gives you time to think of other options, but it also signals that you won’t be a pushover in this negotiation.
* Show the discount. If you give a discount to a client, be sure to indicate both the original and discounted rate in your invoice, so your customer is reminded about the savings. And be sure to “tie” the discount to something important to you in your contract (for example, that they pay within a certain amount of time) – if they don’t perform, the original price is reinstated.
* Make the offer time-ended. If you offer a rate or pricing today, make sure it has a reasonable end date; otherwise, the client can contact you out of the blue years from now and “accept” your open-ended offer.
* Offer a guarantee whenever possible.
* Always be willing to walk away. Per Sandy, the No. 1 obstacle to receiving the price you know is fair is fear of rejection. Sell your strengths. Believe in yourself.
Sandy’s experience includes working with the business affairs department at LucasArts Entertainment; as legal counsel for Mindscape / Broderbund; and legal director for The Learning Company during its $3.5 billion acquisition by Mattel.
She’s negotiated small to multi-million dollar deals worldwide, including securing licenses from Tom Clancy, Stephen King, Beatrix Potter and a company you may have heard of: Google. Check out Sandy’s contract negotiation tips in SF IABC’s blog: Contracts and Negotiation: What You Don’t Know Can Hurt You.
For more information, contact Sandy Shepard, Esq., at email@example.com or reach out to her on LinkedIn.
Julie Knight is an award-winning, accredited business communicator and writer. Her clients have included The Walt Disney Corp., Starbucks, Cisco Systems, McKesson Corporation and Hewlett-Packard, to name a few. Connect with Julie on LinkedIn.