You've done the necessary research, and you've worked up a proposal for a prospective client. You've been careful not to undercut yourself, but you haven't padded it ridiculously either. After all, you know from experience that what seems like a generous estimate usually turns out to cut things pretty close. All in all, the proposal seems fair. By the time you submit the proposal, you're already looking forward to getting started on the project.
"Thanks, but no thanks," the prospect tells you. "We really weren't prepared to invest that much into it."
Back in my early days as a consultant, I would tuck my tail between my legs and slink away. After all, I couldn't really take less, and they won't pay that much. End of story. But that's linear thinking. The only variable being considered is price, when there may be many other factors that could be tweaked to come to an agreement.
Think from the client's point of view. If they're not going to accept your proposal, what are they going to do instead? Perhaps you immediately conclude that they'll find somebody who'll do the same job for less. If your fees are appropriate, it's unlikely that they'll get the same quality of work for the dollar. Maybe they're thinking of abandoning the project altogether.
But they probably haven't even gotten that far yet. They're still in shock because they expected to build castles in the sky, and you just took the fluff out of their clouds. They don't know what to do next. Behind that "no" was a question: "Can you offer anything else?" They might not even be conscious of that question, but it's waiting to be heard by the consultant who thinks from the client's perspective.
Constructing a Plan B
Perhaps the best first step towards generating an alternative is to voice the question, "Well, what will you do instead?"
After giving it some thought, the prospect responds with, "We'll just have Austin do it." Austin is their resident underpaid college geek. There's no doubt in anyone's mind that Austin is worth twice what they pay him — the trouble is, they pay him next to nothing. You have to be careful about challenging Austin's abilities (he is considered the company's Messiah-in-training), even though everybody knows he's still a little rough around the edges.
"Perhaps Austin could use some help with this," you suggest. "How about if I work up a proposal for Austin and me to work together on the design, and then I could take on an advisory role during the implementation?"
Everyone is visibly relieved — especially Austin. Your contract ends up being a fraction of what you initially anticipated, but you didn't compromise on your rate just to get a "yes" for yes's sake. You now have more hours available to dedicate to other projects. Plus, you have the opportunity to mentor Austin. If you do that well, then you'll build a wealth of trust and goodwill that will pay dividends well into the future.
Breaking down the blocks in the agreement
Whenever I get a "no," I visualize each side of the non-agreement as two big blocks that can't get past one another. To get to a "yes," you have to figure out how to break one or both of those blocks down in a manner that is acceptable to both parties. If you can't figure out how to take the whole deal without undervaluing yourself, then look for a way to do part of it instead. Besides sharing the workload with the client as in the story above, some other alternatives include:
- See if the client can trim the project down. Maybe leave part of it for later, and just do the part they need right now. It's amazing how many "must-have" features can be dropped when push comes to shove.
- Offer to subcontract part of it out to someone who charges less, while retaining control of the design.
- Reassess the goals of the project and come up with a different way to achieve 90% of those goals.
Notice that I didn't include any tactic for reducing your rate; I don't believe in devaluing your contribution. But if you must lower your rate, make sure you get something in return such as: payment up front, a more flexible schedule (so you can do other, better paying work first), or some sort of exchange (equipment, services, marketing, etc.). Don't let your soft heart lead you into working for peanuts — unless it's a really short project, in which case doing them a favor may more than pay for itself in goodwill. Just don't let it become a habit.
(This post was developed from thoughts I had after reading Rick Freedman's "Use these tactics to establish trust in client negotiations".)Get weekly consulting tips in your inbox TechRepublic's IT Consultant newsletter, delivered each Monday, offers tips on how to attract customers, build your business, and increase your technical skills in order to get the job done. Automatically sign up today!
Chip Camden has been programming since 1978, and he's still not done. An independent consultant since 1991, Chip specializes in software development tools, languages, and migration to new technology. Besides writing for TechRepublic's IT Consultant blog, he also contributes to [Geeks Are Sexy] Technology News and his two personal blogs, Chip's Quips and Chip's Tips for Developers.