I need to negotiate smarter. Any ideas, hive mind?
October 5, 2011 8:18 AM   Subscribe

Freelance consultant: Any ideas on how I can change my negotiating strategy to land more projects?

I am a self employed consultant providing a highly technical service to organizations all over North America. I have been independent full time for 20 years. I've been a one-man band pretty much the whole time, so besides providing the service that brings in the income, I also do the marketing.

I am expert at what I do. What I am not so expert at is the selling part of it. I have no problem getting leads, inquiries, etc. Where I fall short is in the negotiation process.

The average project runs into the low five figures in most cases. So most prospects get competing quotes. Virtually 100% of the time, it's a single stage bid (i.e., prospects don't come back to find out if I'm willing to negotiate). Very often, I know for a fact, prospects don't even check the references I provide. Probably 80% or more of the time, price is king; other aspects / benefits of my services (which I explain very articulately, verbally and in print), don't seem to pertain all that much.

And in the majority of cases, the work goes to a competitor, not to me. I very seldom am able to find out where I fell short. Was my price too high? Or was the problem something else? When I ask, the prospect generally won't say. (Actually, since most of the discussion is via email and phone, they usually disappear and I am unable to reconnect with them even to ask the questions.)

If I could learn from these experiences what's really going on at the prospect end–why they decided the way they did–I could adjust and, hopefully, land more work. But it's hard to do this when a) I can't find out what the 'winning' bid was, and b) determine what I have to do to be more competitive.

Any ideas on how I can change my approach / strategy in the bid / quote / negotiation process, to make the process more transparent and myself more successful?
posted by reacheround to Work & Money (5 answers total) 4 users marked this as a favorite
I found that I had more success in getting freelance contracts when I opened with asking what their budget was for the project. Starting with a script that says, "There are a lot of moving parts to this project. What's your budget? I'd like to build you a proposal that respects your budget but doesn't compromise my quality of work."
posted by juniperesque at 9:00 AM on October 5, 2011

Sometimes, I tell a prospective client that my day rate is $650, but for this project, I'd be glad to discount it to $450 (not that I get many takers at the higher number) or that we can discuss a flat-rate deal. Most people leap at the idea of a discount. And I always ask what the budget is for my part of the project, as most don't want to give me a total dollar figure.
posted by Ideefixe at 9:04 AM on October 5, 2011

They are calling you to solve their problems. Focus on solutions. Do not focus on what you do or how you do it. They mostly don't care as long as they are reassured that the problem is being fixed and will soon go away.

Do not ever make them draw the line between the two. If you've been at this 20 years, you'll probably need to reframe your entire way of thinking and talking about your business.

If you do it right you'll lose the negotiation phase entirely and they'll pay whatever your rate is because you have shown that you understand their problems as intimately as they do and you have the know-how to fix it.
posted by troubadour at 9:31 AM on October 5, 2011 [1 favorite]

"I very seldom am able to find out where I fell short."
"...[M]ost prospects get competing quotes. ...prospects don't come back to find out if I'm willing to negotiate. ...prospects don't even check the references I provide. Probably 80% or more of the time, price is king."

It sounds like you are losing out on price. They're not even calling references. So it's not that your negotiation strategy isn't working, it's that you're pricing yourself out of ever getting to it. And apparently there's nothing else differentiating you from competitors. If it were me I'd attack this on two fronts: call around and get quotes from your competitors, and articulate what you deliver--for a similar price--that they don't.

It could be that there are simply more people doing what you do, more people out of work and willing to lower rates, or that what you provide isn't valued as much as it was 20 years ago. Have you simply tried lowering your rates? Or at least lowering them in some venues where you advertise? You might get some useful data then. Also, things like introductory offers, retainer discounts, etc. can soften the blow for both you and potential clients. But initially you may simply need to lower your rates, wow your clients, and then raise the rates eventually once you're sure they want and need, specifically, you.
posted by cocoagirl at 11:29 AM on October 5, 2011

It sounds like your buyers are making their decision based on price, which sounds like you haven't differentiated yourself enough.

So you might look at your approach to branding. Your site, your blog, your presentations at conferences--whatever you use, they should show your unique ideas or edge. Your appeal should be strong enough that people say, "We want reacheround" and not "We want the cheapest person."

To identify the angle that you want to emphasize, you might ask past clients or prospects to describe the common problems they run into with other providers. For example, in my semi-technical niche, one of the big complaints is that the provider doesn't listen to the client and just imposes their pet solution, or the provider is hard to work with. If that's true in your niche, you could make clear that you listen closely and consult, and show that you're a good communicator and easygoing person.
posted by ceiba at 4:38 PM on October 5, 2011 [1 favorite]

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