Client Negotiations

I'm in the process of beginning to tender/negotiate for a corporate coaching contract with a client. The deal could be very small or if things go well end up being worth several thousand pounds a year to me.

Having entered into dozens of complex price and propositional discussions over the years I still find this an exciting but bewildering process. As a business person I build everything I offer to clients around my personal integrity and work very much on the thesis that if something goes wrong it will be me that carries the can ultimately.

However, when you're discussing pricing for example with a new client you have to partially put that integrity to one side to obtain a piece of business at a level that you know you can make a decent profit. This can be even harder when the service you offer is a time resource (i.e. mine) and the temptation is often to undervalue the time and effort involved.

So you put on the table a price where you know you could do the work for a bit less but feel you have to both make a decent margin but also leave some wiggle room for 'negotiation'. The client in turn - if they're serious about moving forward - asks for a rate which is below that which they've budgeted to spend in the first place and so the merry dance begins.

When I'm talking to clients or business acquaintances about business negotiations I often point out two things, firstly that whilst it's important to be flexible (that is to do and say things you think the client WANTS to hear) it is also equally important to cover your costs and say things the client NEEDS to hear.

In the final analysis, business is about making a profit and if in the process of client acquisition you price so low that you cannot really justify doing the work (or worst case scenario, give less than your best because you're cutting corners) then that client really isn't worth picking it up. So the message has to be to keep flexible but charge what you're worth and remember that any business relationship is a two way street.

Phil