It is a simple truth that most, if not all, humans crave money. In spite of their passions, their dedication or interest in their work, the goal of each and every profession is in part to earn remuneration for the effort put in the work and maximize the profits. Be it designing or any other creative profession involving direct interaction with clients, for example project based work, maximizing profits depend a lot on the negotiation phase. The negotiation part of this business model is far from perfect and involves some serious skills.
First and foremost, money earned in such work is dependent largely on the number of billable hours as well as the rate charged. Since billable hours cannot be increased when they reach a certain limit, the focus needs to remain on the rate charged.
It is therefore essential to focus on effective strategies to achieve the highest rates from all of your clients. An integral part of this strategy is better negotiation with clients. So without further ado, let’s get to some tips that will make positive changes to your negotiating style and will bring increased earnings!
How Should You Negotiate Better Prices For Your Projects?
Any change, be it positive or negative, first comes from within. The same is the case with price negotiation. Nobody can be persuasive without first convincing themselves, and the simple act of establishing to yourself why you need and deserve to raise your rates will be a big step in the right direction. After identifying a concrete reason for your increased rates, it is easier to frame your case for why they should actually go up. This may seem like a simple step but it one of the most important part of a negotiation, and one that many people seem to skip.
Dive into Specific Details
Many people find it easy to describe their failures yet tough to nail down their accomplishments. But the same may be the difference between low rates and well-deserved high rates for the same work. To better frame your achievements to the clients, it is always good to have a few key examples nailed down and then get detailed about your specific achievements. Instead of selling some generic success story, it is always better to count out your specific big wins.
Avoid Setting Upper Limits
One mistake people often make in negotiations is quoting a rock-solid price which sets an upper limit for the client. The client in turn might have even been prepared to go higher but by setting the ceiling you may be undercutting yourself, albeit unknowingly. So it is always good to resist the temptation of setting a flat price although it may seem easier to you.
Stop Underselling and Start Selling
Most professionals seem to forget the fact that their clients hired them for a reason and that reason is your continuing good work. Often the same professionals undersell themselves and ask for better rates in terms of them needing more money. It is entirely the wrong strategy and very likely to backfire since is shows the professional’s desperation. A better alternative is to make it all about the client, the consistent good work they are getting, the quality of work they are likely to lose if you were to move on to better things.
Win-Win not Win-Lose
This may seem like the obvious, but it is sad how many times people seem to forget that the deal should offer value to both the clients and the professionals. If both parties do not walk away from the business table feeling victorious, the business will never be for a long term. Except for a few bad eggs, most clients out there do want to pay fairly for the services rendered, but only if they are getting a good deal as well. It is therefore essential to make sure that the deal is a win for both yourself and the client!
Confidence in Stating and Countering
A large part of price negotiations depend on how it is stated and professionals who are timid during this part often get walked on. Being decisive in arguments and having conviction is as important as keeping your arrogance at the door. At the same time you need to be ready to block & counter their likely objections. This requires some homework to avoid getting tripped up on likely issues that should have easy responses.
When nothing works, the last tool in your repertoire must be silence. Even in general situations in life, constant chatter shows nervousness while a calm and silent disposition will likely trip the other party. It is important at this point to remember that you’ve already done your part and have done all that you could have to make your rates seem like a deal. Talking too much at this point just exposes your weakness, so it is essential to remain silent and put the ball in their court!
Price negotiation is a tricky thing and keeping your poise is a must. But the most important thing to remember here is that whatever happens, be it success or failure, this is just professional and even in adverse situations things should never get personal!