Lessons from Maurie: Fee Negotiation
Maurie Fulton, a rainmaker who gave me my first job in consulting, knew his field cold and, just as important, knew his clients. Through years of negotiating fees, he was familiar with every ploy that clients would use to get our fees down and had effective counter ploys for all of them. Whenever a prospective client would try a ploy, he would real off his standard response with such grace and confidence that the clients would usually move on to another subject without further comment. Here are a few client ploys and Maurie’s counters:
Client Ploy: Someone Else is Cheaper
Counter Ploy: The Butter Story
On hearing our fee, the client would say that they were talking with one of our competitors who would do the work for less. “So, why don’t you use them?” Maurie would ask, sensing this was just a ploy. Not expecting this question, the client would say that the competitor couldn’t start as quickly or didn’t have quite as much experience as we did, and Maurie would respond with his butter story. “It reminds me of the woman who told the grocer that the store down the street sold butter for half his price. ‘So, why not by it from them?’ countered the grocer. ‘Because he’s out of butter,’ said the woman. To which the grocer responded, ‘Lady, when I’m out of butter I sell it for half off, too.’”
Client Ploy: This Could be the Beginning of a Long Relationship
Counter Ploy: That’s What I’m Afraid Of
The client would suggest that this would be the first of many projects he would give us, if we just gave him a break on our price. And with a twinkle in his eye, Maurie would respond, “You mean that this could be the beginning of a long relationship? Yes, a long and unprofitable one.”
Client Ploy: Existing Data Makes You Cheap
Counter: Let Me Help You Find Someone Else
On seeing our impressive array of proprietary information, the client would say that with all that data on file, the cost of our service would be low. Maurie would smile and respond, “If you wish I can introduce you to several people who are much less expensive than we are, who don’t have any of this data.”
These kinds of statements by clients should be taken for what they are, offhanded attempts to wheedle your prices down. Remain calm and try one of Maurie’s responses. They almost always work.
Readers,do any of you have effective responses to common negotiating ploys by clients. If so, would you share one?
