I am writing this more out of curiosity than for the purpose to persuade you to think my way. Do you negotiate your rates or do you take a hard stance on being non-negotiable with your rates. The reason I ask is because it has become a topic of conversation with several of our mentorship clients recently. To be honest I think it is a personal choice and I would like to layout the pro’s and con’s of each side as I see it, but would also love to hear from you: negotiable or non-negotiable?
Taking a Firm Stand – Non Negotiable
Pro’s – I think the biggest pro to not being willing to negotiate your rates is simply that you have a firm boundary around what you will and will not do for a certain dollar amount. This allows you the security of knowing that you feel good about your compensation and essentially not leaving yourself in a place of feeling undervalued. For many this is a deal breaker, period. Especially in our virtual support community. One of the main complaints I receive from virtual support professionals is that they feel undervalued in their role with the businesses they serve. Many times this stems simply from the agreement they have around their rate, not even from the way the client treats them. I have heard time and time again ‘I really love this client by the only pay X and my current rate is Y, and they are not willing to change the rate, so I will have to let them go.’ This is not a good experience for anyone but happens very often.
Often times using the retainer or dollar per hour amount is a bit of a qualifier to the success or stability of the business that is looking to hire us.. ie: if they can’t pay XX they are not ready to work with someone at your level of support. I totally get this. As an OBM I am firm believer in requiring a client to be at a certain level of success before they are ready to work an Online Business Manager. When you are not willing to negotiate rates you take a stand for your expertise and for the level of expectation you have for your current clients.
Personally, I feel any seasoned virtual support professional should feel confident in not being willing to negotiate. You bring a level of expertise through your experience and or results. With this level of confidence you should feel good about your rates and being an asset to the businesses growth.
Con’s – well simply put, some folks simply wont work with you if they feel you are out of their price range. Many prospective clients are interested in seeing if they can get your rates down and truth be told, some have this mindset even if they are perfectly capable of paying what your going rate is. The biggest con I see in not negotiating is simply the loss of potential clients. The good news is that most of us work with very selective clienteles and replacing one or two prospects is not that difficult.
Let’s Make a Deal – Negotiation Time
Pro’s – There is no secret that negotiations is a standard practice in business. In most industries I would even say it’s an expectation that negotiations would be part of the contractual process. So when you are working with seasoned business owners who negotiations is simply a part of doing business, you need to be certain you know how to play the game. And if you do it effectively it will not leave you feeling like you got the raw end of the deal. Folks who are willing to negotiate need to have a very clear grasp on 2 things in my opinion:
1. What is your bottom line to ensure you are making a profit and feel great about the arrangement
2. What is exactly are you willing to negotiate, dollar amount, services, both, etc… there is often more room to play to get a win/win then what simply meets the eye.
Being will to negotiate allows you give the feeling that your prospective client is getting a ‘deal’, which is a real embedded mindset in today’s consumers… so if your prospect doesn’t feel he is getting the best pricing you could loose the contract. Again, not because they couldn’t pay, but because you didn’t play into the psychology of the sale. This might give you a higher close rate and have a bit of a more appreciative attitude from your client.
Con’s – You can under sell yourself and end up in a not so great contract. To be honest I really think that negotiations are better handled by folks who quite love the process. If you don’t love the process it is likely this would not be a good option for your business model or sales process. If you are not a strong sales person with great confidence to what you bring to the table, you could find yourself on the loosing end of a negotiated contract that your committed to for a certain time period… so think about seriously before you consider going this route.
That’s my take.. I would love to hear yours and find out what is happening in these conversation industry wide! Go ahead and pop me a note below, feel free to share your experience or ask any questions you may have.