Many companies do not know how to deal with clients who constantly want to bargain. This is because consultants don't understand that once you make a single concession on price, you've enabled a behaviour which will inevitably cost you money and probably drive you crazy.
Requests for price concessions generally emanate from the owners of small companies who are accustomed to haggling with everyone from the coffee vendor to the hourly employees (and who, themselves, are constantly asked to lower their price from their customers). There are several keys here:
- Never offer a concession without a quid pro-quo - Once you lower fees, no matter how slightly - or delay the client's payment dates - you have opened Pandora's Box. The client, like Archimedes, will stick a lever in that slightly open door and rip it off the hinges.
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Be prepared to deny the request and walk away - If you don't call the customer's bluff, then you don't belong in the card game. Many buyers ask for a concession because they believe it's good business, and are shocked at how often they are granted one without any resistance, despite the fact that they're seldom prepared to press the issue if they're told 'No'.
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Focus on the value proposition and the return on investment (ROI) - When buyers are especially resistant to the price, but indicate they would go ahead with a price reduction, they're really saying that they believe you can help them, but they're not sure how much (so they want to hedge their bets). Demonstrate that even a conservative return will provide dramatic ROI.
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Turn the tables - Ask the customer if they concede prices on the company's refrigerators, or computers, or insurance policies, or real estate commissions whenever a customer asks. If they indicate that they sometimes do, ask what they get in return: volume business, payment in advance, introduction to more clients? If so, negotiate the same quid pro-quo for yourself.
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Offer non-monetary "concessions" - Some people just need the ego fulfillment of having received something for free or at a reduced price. Offer anything from a free book, to complimentary quarterly updates, to free newsletter subscriptions. Provide something to salve their ego so it's not a "win/lose" proposition.
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If you're in a larger firm, go back to the economic buyer - Never allow a support person to re-open negotiations on any topic, let alone fees. Tell your buyer that you had a deal and that an underling is trying to undo it, as if they are smarter than the buyer. That should put an end to it. Never enter into a debate with a subordinate or non-buyer, which is the equivalent of conceding a little bit on fees. If they find they can engage you, then they'll take you on with a myriad of trivialities.
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Always provide options - Even to small businesses. If the buyer says, "I love option 3, but the fee seems a bit high", reply, "That's why we have an option 2".
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Stop work if you're not paid on time - "Deal-seekers" are famous for delaying payments to squeeze out extra work. If you're not paid in advance, and a payment date has passed, allow ten day and then stop working. Otherwise, you'll be in permanent debt to the company store.