How to negotiate

All good negotiations start by agreeing on the common goals. After that, it’s just a question of figuring out the most acceptable route to those goals. If negotiations get stuck at any point, it’s often a good idea to go back and make sure that everyone is still aligned with the original objectives. Negotiations are about finding a mutual balance, they shouldn’t be about one party trying to screw another party into the ground, so begin them with a flexible, reciprocal attitude.

Fixing the fee is top of most agendas, but there’s more to negotiating than simply settling on a number, especially when it comes to creative product. For example, you may need to consider:

With a list of things to agree to, it’s common to give up a little territory on one point to gain extra on another. Being aware of everything that must be agreed, and which points may be conceded, will assist the negotiation of a fair price.

As stated elsewhere on this site, the value of something is what people are prepared to pay for it, but that doesn’t mean you have to agree to a fee below your bottom line. But how do you know what that bottom line is? Your cashflow forecasts will give you a lot of clues. If you’re offered a job that will take six weeks and only bring you enough money to pay the overheads for three weeks then you have three options. You can 1) decline, 2) take it on and look for more work (if you have the time), 3) go broke. Is the work or client worth the financial squeeze?

“Negotiation is the art of finding, or creating, common ground.”

When this awareness underscores your negotiations, agreeing a price can be very simple. Work out how much you need to cover your costs (all of them), then add a healthy margin to cover the percentage of time you have to go without a paying client while you’re doing ‘research’, then try to figure out what value you might be adding to your client and add something for that too. Always ask for as much as you can reasonably justify – but don’t try to justify it. You are defining value so you can state what you think the work is worth without having to apologise for your opinion. Expect to haggle over fees. The worst thing is to quote a fee and just have the client agree to it – that means they probably valued the work higher than you did and expected to pay more.

If you can’t find a balance, be prepared to walk away from the negotiation – politely explaining that you can’t agree with the client’s estimate of your value. The work you take on for poor fees will eat up the time you could have been spending on finding better paying clients or doing speculative work which will attract better paying clients.

There are many tips you can pick up from books about selling and negotiating but here’s one that is invaluable: When you’ve agreed what you are going to do and stated your fee, SHUT UP! Wait for an answer in silence. You’ve said your price. Don’t blurt all over the client’s thinking time with more and more justifications for the estimate, or why it’s going to be really worth it and what a great job you’re going to do; just keep quiet, be calm and give your client a chance to say ‘yes’.

Finally, be aware of something that most of us suffer from: buyer’s remorse. It’s the regret people feel immediately after agreeing to buy something, and you counter it with composure and confidence. Don’t leap up the second they say ‘OK, go ahead’, shake their hands enthusiastically and rush out screaming ‘We got it!’ You may be negotiating with people whose jobs are on the line and might just be worried about your company’s potential to mess it all up. Be calm, reassure your client and ask them if they have any concerns you can answer now. Then thank them for their business, go back home and confirm it all in writing.

Bookmark this article with:· Digg· Technorati· Ma.gnolia