Articles - Cut your fees by 30% now!

How will you respond if your client demands this scale of reduction or more? Many businesses are facing unprecedented pressure to drop prices and fees by their clients. Clients are cutting budgets, squeezing every cost and delaying discretionary expenditure. As a result the profitability of many of their suppliers is under immense pressure, survival is threatened and business confidence is sliding downhill. Many companies are STRUGGLING.

Having run negotiation and sales training workshops for many years clients often ask my advice how to respond when clients have demanded substantial cuts in their fees ranging from 10-50%! This is very challenging for any business. Here are 7 examples of the key strategies I recommend.

1. Don't panic, remain calm. Ask questions. Plan and prepare high quality powerful questions. Understand what they are trying to achieve.

2. Buy time & manage expectations. Do not agree to any reductions in the meeting. Manage their expectations by explaining that 'this is very difficult, if not impossible and will cause major problems for your company'  Explain that you need to review your finances and options. Give yourself time to think and choose your response.

3. What's the impact on your business? How important is this client to your business? What % of your revenue and profits come from this client? Can you afford to lose the client? Typically even a 1% reduction in price reduces profitability by around 10% for most businesses. 

4. What value do you provide? How well do you really understand what you do that your client really values? Ask the client. Identify their 'must haves' and 'like to haves'.

5. Think creatively. What options are there? Can you handle the business differently?

6. Prepare and anticipate.  How will you respond to the client? How are they likely to respond? Anticipate their likely objections and comments.

7. Negotiate. Trade their demands for something of value to you.

The above are just a few of the strategies and advice within our negotiation skills and our consultative selling workshops.