BDS News

Negotiate Your Advantage in the New Year

One of the most powerful yet overlooked tools a businesswoman has in her arsenal is the ability to negotiate. If you want to improve your negotiating skills in the new year, here are some key points to remember.

Become a subject matter specialist. This applies whether you’re buying a new car or pitching a prospective client. Research, strategize and prepare. Understand their business goals and objectives before you begin the process.

Create desire for your product or service in less than two minutes. Once you have done your homework and you have an idea of what your prospective client hopes to achieve, give them a small taste of what you would do for them to either solve their problem, increase their revenues or save them money.

Use examples of what you’ve done for past clients who faced similar issues. The ultimate goal is to dangle the carrot and leave them wanting to know more about your company and its services.

Don’t tip your hand too early. Quoting rates or fees right off the bat (even if you’re asked) puts you at a disadvantage. It’s much better to say, “Before I can give you an estimate of what this will cost, I first need to ask you some questions.” Then use your extensive research to help them frame the parameters of the project, articulate the desired outcome and identify potential roadblocks.

Engage the opposition. Although you should be working directly with the buyer of your services, there may be someone on the corporate team who isn’t convinced you can help the company.

Drill down and find out what the reservations are, then devise a strategy to overcome the expressed concerns. Perhaps a bad experience with another consultant left them less than enthusiastic, or maybe they simply don’t understand the value of your services and how your work will make a difference to the company’s bottom line.

Put on your detective hat and dig deep to find out what the objections are and make sure they are addressed before moving forward.

Recognize your value and price yourself accordingly. Make sure you are not shortchanging yourself when quoting a project fee or retainer. Once you have a particular fee structure in mind for the job, increase it by 25 to 30 percent. This covers the inevitable “project scope creep” that isn’t always apparent at the outset, and also gives you the ability to up your service level if something unexpected arises without feeling like you’re losing money.

Quoting a slightly higher price for your service also gives you negotiating room, enabling you to lower the price if the client’s budget is tight. That way, you can still arrive at your original figure without feeling that you’ve lost something.

Let your passion show. Chances are, if you own your own business, you are passionate about what you do. Make sure to present background on you and your company that includes the unique value that your firm provides along with your company’s track record to help achieve their goals.

Learning to negotiate effectively takes practice and patience. Make a New Year’s resolution to brush up on your skills in this area to grow your business, gain more respect from potential clients and leave the table satisfied that you’ve set a solid foundation for a long and profitable business relationship.

Lynn Tokarczyk is president of Business Development Strategies Inc., a government incentives consulting firm in Medway.