June 14, 2018
Sooner or later, you’re going to work with a client who wants to “change things up a bit.” They’ll probably want to change the services you’re offering or redo your working agreement. Your immediate reaction might be “No!,” but hear us out! There are actually plenty of reasons why you might decide to negotiate with a client.
Before we get into negotiating your contracts, though, let’s review the fundamental elements that your contract must include:
It’s important to include these three things so that you’re legally protected and there’s no misunderstandings about your agreement.
Let’s pretend that you’re in the market for a new car, and you have a budget of $30,000. At the dealership, the salesperson starts showing you hatchbacks for $8,000 less than what you’re prepared to spend.
You’re tempted… but you actually want to buy a hybrid with new energy-saving features! You’d pay more for the car that you want, but the salesperson thinks you’re interested in spending as little as possible.
Bottom line? You and the salesperson are focusing on different aspects of the deal. What they assume is important to you isn’t actually your biggest concern.
That’s why, when it comes to negotiating contracts, the best negotiation tip we can share with you is to make sure you and your client are on the same page. Knowing where they’re coming from will have a huge impact on your conversation. That’s also just providing an excellent client experience.
What won’t you budge on? This could be your minimum dollar amount, which hours you work, or whether you own the copyright after completing the work. Deciding what factors you won’t concede gives you the clarity to decide what could be changed.
Want to create the easiest negotiation experience possible? (Of course you do.) Identify your client’s biggest concerns, either by directly asking or really listening to what they are saying. What’s actually important to them may surprise you!
For example, if they’re a wedding photographer looking for a new website, they might really, really need to get that done before the holiday engagement season. In this case, speed is much more important than price.
On the flip side, if they are contacting you in June to get this done, they may value price much more than speed, so you may consider quoting a longer turnaround time at a lower rate.
If your client has a specific objection to something in the contract, how can you make it easier on them? What’s a creative solution that’ll make you both happy?
If your project price is $500, but they can’t pay it all at once, can you break it into two payments of $300 each? Or if they’re worried that they won’t get the work on time, can you build in a money-back guarantee if you don’t deliver their first draft by a certain date?
Make sure you have clarity around why you’re willing to drop your price, add another service, do things more quickly, and so on. There should always be a reason for you to change your regular process.
It could be that this is a dream client you’re hoping to turn into a long-term customer, that you’ve been dying to work on this type of project, or simply that you’ve got bills coming up at the end of the month and you need the money.
As entrepreneurs, we talk a lot about knowing the “why” behind our businesses, but it’s important to understand why we’re willing to negotiate, as well.
Sometimes the warning signs for a client aren’t that obvious. If your gut says no, don’t do it. It’s not worth compromising your ideals, morals, or hard and fast business practices simply to win over a client. In the end, you’ll just be frustrated and the relationship likely won’t work well anyway.
Know your contract through and through, especially the more complicated topics — like how Intellectual Property works, for example — so you can explain to the client why you’re not willing to budge, or why it has a high cost to negotiate. This’ll help you stand your ground, too.
After your client tells you what they want, recap and repeat it back to them so you both understand exactly what you’re agreeing to. This is especially important if you’re talking over the phone or on a video call, with no emails or documents to fall back on.
Tip: You may want to summarize your conversation and email it to them after, as well, to make sure there are no misunderstandings!
Ultimately, remember that negotiation is totally okay and normal. Relationships with clients change. Their needs and your services do, too. Negotiating is a way to keep working together in harmony. Remember these tips, and you’ll feel totally confident the next time you’re faced with negotiating a contract.
If you need help understanding your contract so you feel more prepared going into a negotiation, we got you! When you buy any contract template from The Contract Shop®, you’ll also get access to our Hold My Hand™ guides to explain the different clauses in your template—in plain English!