Have you ever said to yourself:
“We can’t go in with that price, it’s too high”
“I can’t charge that large of a fee”
“They’ll slam the door if I put that number in front of them”
If so, you have experienced what I will call
mononegotiatis [mon-oh-ni-goh-shee-eyt-is]: The art of negotiating against yourself on behalf of another (i.e. a prospective client) to the detriment of your bottom line.
Ok, so it’s obviously not a real word, but it does represent a condition that I often see (and have faced myself).
Here is how you combat this condition:
- Take a negotiating course (along with any of your staff that deal with customers in the areas of sales, account management, billing, collections, etc.). If applied, the skills learned will quickly pay for the time and expense.
- Put your fee in perspective. Take the time up front to understand clearly the benefit (ROI) that your client will receive from your product or service. In addition to more revenue and/or reduced costs, be sure to include “intrinsic” ROI such as lower stress, better staff morale, happier family life, etc. In that light, their investment in your fee is worth it right? (If the answer is no, that’s another topic…)
- Recognize that once you establish your ‘value’ with your new client, that ‘perception’ will stay with you – and will be difficult to change if you aim low. That perception of value will also extend to any referrals that your new client might provide.
- Consider this. If you propose your full price and your prospective client slams the door without talking to you, isn’t it likely that they would have done the same if you led with a discount of 5, 10 or even 20%? If they are not willing to have a conversation (i.e. negotiate) within a reasonable range of your true value, is that business you really want in the long term?
- Resist temptation. If you lead with a stated discount (other than payment terms), that typically tells your prospective client that your ‘standard’ fee is not real and they will expect to begin negotiating from the discounted price. You want to keep your full value as the frame-of-reference.
- Recall that timeless truth: “if you don’t ask for it, you won’t get it”.
- And, don’t forget that it is much easier to negotiate down than up…
When you do negotiate a discount for your product or service, here are a few suggestions:
- Be sure that your proposal clearly states your full (real) price, rate, fee, etc., before the discount. This provides a reference for future projects
- Show any discount as a separate line item
- Avoid associating a discount on any pricing that might impact ongoing or re-occurring revenues (i.e. hourly rates, renewal fees, maintenance, support contracts, etc.)
- Make it clear that the discount applies to the current project and that future projects will be evaluated independently.
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