Topic: Negotiating With a Client You Can't Afford to Lose?

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i am helma, new member to this forum.  i wish to share an article:

“I like your product, but your price is way out of line. We’re used to paying half that much!”

“Acme’s going to throw in the service contract for nothing. If you can’t match that, you’re not even in the running.”

“Frankly, I think we’ve worked out a pretty good deal here, but now you’ve got to meet my boss. If you thought I was tough...”

“Tell you what: If you can drop the price by 20%, I’ll give you the business. Once you’re in our division, you know, you’ll have a lock on the whole company. The volume will be huge!”

“I can’t even talk to you about payment schedule. Company policy is ironclad on that point.”

“Look here, at that price, you’re just wasting my time! I thought this was a serious bid! Who do you think you’re talking to, some green kid?”

This wasn’t supposed to happen. You’ve invested a lot of time earning a customer’s trust and goodwill. You’ve done needs-satisfaction selling, relationship selling, consultative selling, customer-oriented selling; you’ve been persuasive and good-humored. But as you approach the close, your good friend the customer suddenly turns into Attila the Hun, demanding a better deal, eager to plunder your company’s margin and ride away with the profits. You’re left with a lousy choice: do the business unprofitably or don’t do the business at all.

This kind of dilemma is nothing new, of course. Deals fall through every day. But businesses that depend on long-term customer relationships have a particular need to avoid win-lose situations, since backing out of a bad deal can cost a lot of future deals as well. Some buyers resort to hardball tactics even when the salesperson has done a consummate job of selling. The premise is that it costs nothing to ask for a concession. Sellers can always say no. They will still do the deal. But many sellers—especially inexperienced ones—say yes to even the most outrageous customer demands. Shrewd buyers can lure even seasoned salespeople into deals based on emotion rather than on solid business sense. So how do you protect your own interests, save the sale, and preserve the relationship when the customer is trying to eat your lunch?

Re: Negotiating With a Client You Can't Afford to Lose?

All too often as a professional within a professional services firm you find yourselves negotiating. More often than not it will be with a client you can't afford to lose, or perhaps you are agreeing the all important fees and terms of engagement at the start of a contract. Read on for 7 top tips which will help you achieve more with your next negotiation...

1. Explore other options before negotiating

Negotiating costs time and money. Think about it...When negotiating you have to give stuff away in return for concessions from the other side. In addition, if you negotiate too hard, you risk damaging relationships. If you can positively influence or problem-solve together you can often avoid the need to negotiate and preserve (perhaps even build) the relationship. As you are aware the world of professional services is a small place and you can't afford to get tagged as 'unreasonable'.

2. Know from the outset what is your 'walk-away-position' and the consequences of walking away.

Having clarity about your 'best alternative to negotiated agreement' gives you the ability to know when to walk away from a negotiation. That way, you stop yourself, in the heat of the moment, from giving away too much.

3. Look to preserve the relationship

You never know when you may need a favour (or a referral) from the other side in a negotiation. It may not be this week or next week, but my experience, professional paths tend to cross frequently. It goes without saying that if you are negotiation with an existing client, it is of paramount importance to preserve the relationship. It costs 7-14 times as much to find a new client, than to get more work from an existing client.

4. Explore your opponent's agenda and needs

This is really best summed up by the phrase 'seek first to understand'. If you understand the other side's agenda and needs, you can put together a proposal that is most likely to be accepted early into the negotiation process.

5. Think creatively

Most people think negotiation is all about money. Actually, you can negotiate about anything - I found myself this weekend negotiating about 'order of service' booklets and what my daughter was going to eat for breakfast. Before going into a negotiation, think about what you can offer to the other side, which wouldn't cost you much, but will be of a high value to the other side. Plus, think about what the other side could offer which would help sweeten the deal for you. Some ideas for you... payment terms, free advertising, referrals & introductions, invitations to events, delivery time...

6. Hold your nerve

Negotiations can be very tense affairs. If you are not sure what you are agreeing to, ask the other side for a summary of their proposal OR take a 'natural break' to give you much needed thinking time. If your negotiating opponent is playing hardball, you have two choices - play hardball back or give the other side feedback on the impact they are making with you.

7. Don't give away concessions without getting something in return

Remember how the Ducks at the park never seem to understand that they are only going to get one piece of your sandwich. Well, it is the same in negotiations. If you give away a concession without asking for something in return, the other side will carry on asking for concessions until you say no...

Do you wonder if you give away too much in a negotiation? Or do you avoid having to negotiate? Perhaps you are intimidated by the prospect of negotiations. Perhaps you find it difficult to break a deadlock in a negotiation? Here are the Efficiency Coach we are trained negotiators, who will make sure you achieve more for your negotiating time and effort. If you are about to enter a difficult negotiation OR think that you could achieve more for your time, money and effort in negotiations - give me a call on 01234 48 0123, drop me a line on heather@theefficiencycoach.co.uk or take a look at our website: