Clients are the lifeblood of a business, but at some point you’re going to need more of that blood. You need your existing clients to start paying you more and you need new clients to offer you more money for the job you do. This is where strong negotiation skills are a must. Let’s take a look at some of the key tips to negotiating with clients old and new.
Establish the ‘Why’
Everyone wants more money, but you need to think about why you want to raise your rates and why that should matter to your clients. No client will pay you more for no reason. They want to know what gives you the right to try to charge them more. What do you offer that no other company offers?
Think of it like this. If a competitor can do exactly the same job to exactly the same standard, why should a client pay you more? There’s nothing to stop them going elsewhere and getting what they’re getting now at a lower price. In other words, raise your rates, but you better have a damn good reason for doing so.
Specificity in Your Pitch
During your pitch, you need to give some accurate examples to the client. Explain to them what value you’ve added to their business. An example of a time where you’ve added real value to a business is a mention of a big traffic day, or a vast increase in the number of newsletter subscribers a client got. You need to make it obvious that you have added value that nobody else can.
What Will You Do Differently?
Now you’ve focused on the past you need to focus on the future again. It’s out of the question that you can bump up your prices and suddenly start doing exactly the same things as before. This is not acceptable for any client. In their minds, they’re now paying more, but they’re not getting more. You can’t make them see it in any other way.
You need to make it clear to the client that they’re going to get something better by parting with more of their money. Tell them what you’re going to do differently. This can be as simple as saying you’re going to send more regular reports and make them more of a priority.
Keys to Doing this Right
- Never ask for higher rates out of the blue. Give your client a grace period where you say you will consider altering your rates in a few months. Don’t spring it on them.
- Approach the issue after a project not after one has begun.
- Do it at a time that suits them in a professional manner.
Be Willing to Walk Away
In an ideal world, your client will accept the changes and you’ll continue to strengthen your business relationship. Sadly, we don’t live in an ideal world and this isn’t always going to happen. No, instead, you’re going to have to accept the fact you don’t always get what you want. If things aren’t going right, walk away. Tell the client the rates will rise and if they can’t accept them they must find someone else.
It may mean a loss of revenue in the short-term, but it will give you a better quality of client in the long-term who will pay you what you want. Remember, this is a course of action you must take for your future. Ignore the immediate implications, even if they’re negative.
Many businesses find they don’t reap the rewards of higher rates for a full financial year. It may require some rebuilding, but all companies must go through painful growth periods.