Knowing how to negotiate with high-value clients is vital to the growth of your business. You simply can’t afford to lose those accounts, and they know their value and the power they have over you as well.
By Nick Rojas
Clients that know their value often ask to change the relationship through lower cost services. And your high-value clients possess negotiation power difficult to ignore.
The Richardson’s 2016 Selling Challenges Study involved over 400 professionals in the sales realm with 85 percent accounting for B2B sales. The study noted the similarities in negotiation difficulties.
High-value clients that want lower prices for services can hurt your bottom line. You may need to increase your own pricing, but resist since you can’t afford to lose business.
In fact, 29.2 percent of the 2016 study’s participants said that negotiating higher prices was the challenge of the year. How do you negotiate with clients you can’t afford to lose?
Let’s examine a few strategies you can employ at the negotiation table in 2017.
Change Your State of Mind When Negotiating with High-Value Clients
Your high-value clients are certainly important, and chances are they know their importance. Losing them would be disastrous to your profits, but giving into their cost saving requests simply will not do either.
Richardson’s 2016 study found that 48 percent of participants worried about competing with low-cost providers in their industry. However, changing your state of mind can turn the negotiation back in your favour.
Your strategic accounts hired you for a reason. You develop projects that surpass client vision, you meet deadlines, and you have nurtured a business relationship built on rapport.
You are most certainly the “preferred” vendor for your client.
“Smart sellers identify when they are in the preferred supplier position and don’t give in to customer demands for discounts by cutting their prices,” according to Harvard Business Review. “After all, price concessions just train the customer to expect more price concessions in the future.”
Revisit the Value Your Services Provide in the Negotiation
Instead of spending sleepless nights worrying about clients you can’t afford to lose, revisit the value you provide. The value of your services is exactly the reason your high-value client chose you in the first place. Giving in with discounts or lowering cost is a counter-intuitive strategy at the negotiation table. You may not think you have leverage, but you certainly do. Clients will try to get you to act in the heat of the negotiation
Giving in with discounts or lowering cost is a counter-intuitive strategy at the negotiation table. You may not think you have leverage, but you certainly do. Clients will try to get you to act in the heat of the negotiation moment but hold your ground.
“The strategy of a low-cost leader is a rough-and-tumble position,” according to Entrepreneur contributor and pricing expert, Mark Stiving. Know the value of your services and remind your client of the positive past you’ve shared.
Know the value of your services and remind your client of the positive past you’ve shared. Low-cost providers are low cost for a reason. Introduce “give-get” scenarios to highlight this. The high-value clients normally don’t have the time or energy to start up a new relationship – so, call their bluff.
Silence in Negotiations is Often Good
You held your ground against your high-value client, highlighted the value your services provide and employed savvy negotiation techniques, but now what? Why hasn’t my client responded?
Silence in negotiation is often a good thing, according to Forbes. “Instead of rushing to fill the silence, leave a thoughtful pause at strategic points in the discussion (for example, when things get tense or heated).”
If your client fails to return your calls and emails, let the situation stand. After all, if you discount your services every year, you will lose profit anyway, and still need to tend to client needs, but at a far lower cost.
Silence is invaluable. High-value clients are considering the cost of switching providers and thinking about the value you provide during these moments of silence. Chances are, it simply isn’t worth the hassle for them to make a change, low cost or not. And silence in the negotiation gives them a chance to realise just that.
In order to negotiate with clients you can’t afford to lose, you need to know your worth, showcase the value you provide, and hone those negotiation skills. Communicating, influencing, and persuading are powerful tools at the negotiation table. If you offer quality services and nurture strong relationships, cost is a mere afterthought.