Sooner or later, you’re going to run into a client who wants to “change things up a bit,” and asks for changes to the services you’re offering or your working agreement. Even though your immediate reaction might be “No!” there are actually plenty of reasons why you might decide to negotiate with a client. (We’ll talk about those in a minute.)
Before we get into negotiating your contracts, though, let’s review the fundamental elements that your contractmust include:
- A description of what service(s) you’re offering
- Their acceptance of your offer (a signature or payment, usually)
- And, what they’re offering you in exchange (payment or services in kind).
It’s important to include these three things so that you’re legally protected and there’s no misunderstandings about your agreement. (Click here to read a more in depth explanation of these elements.)
Next, remember that negotiation is okay!
Despite what it mightseem like, saving money is not always the other person’s main objective. Let me give you an example…
What to Do When the Client Wants to Negotiate Your Contract
Let’s pretend that you’re in the market for a new car, and you have a budget of $30,000. You walk into the dealership, and the saleswoman 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 much rather pay more for a different car, but the saleswoman thinks you’re just interested in spending as little as possible.
You and the saleswoman are focusing on different aspects of the deal…and what she assumes is important to you isn’t actually your biggest concern.
The biggest negotiation tip I can give you is to make sure that both you and your client are on the same page. Once you know where they’re coming from, it could change the dynamic of the conversation entirely.
So, okay, sure, it’s great to keep these things in mind, but how do weactually go about negotiating?After all, most of us don’t get much practice!
Here are my six tips for making sure your discussion is effective and you both walk away happy.
1. Write down your non-negotiables.
What won’t you budge on? This could be your minimum dollar amount, which hours you work, whether you own the copyright after completing the work, etc. Deciding what factors you won’t concede gives you the clarity to decide whatcould be changed.
2. Identify their prime objective
If you want to create the easiest negotiation experience possible, you’ll want to identify their biggest concerns either by directly asking or listening to what they are saying. What’sactually 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. So speed is waaay 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.
3. Think creatively!
If they have a specific objection, how can you make it easier on them? 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?
4. Always have a reason for your concessions
Make sure you have clarity aroundwhy you’re willing to drop your price, add another service, do things more quickly, etc. 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.
5. If you don’t agree, stand your ground
If your gut says no, don’t do it. It’s not worth compromising your ideals/morals/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.
6. Educate yourself on your own contract
Make sure you educate yourself on your own contract, especially the more complicated topics (like howIntellectual Property works), so you can explain to the client why you’re not willing to budge, or why it has a high cost to negotiation. This helps with Tip 5, too, when you have to explain the problem to a potential client.
When you buy a 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!
7. Listen and repeat back
After asking them what they want, make sure you recap and repeat it back to them so you understand exactly what you’d be agreeing to. This is especially important if you’re talking over the phone or on a video call, and there aren’t any emails or documents to refer back to. You may want to summarize your conversation and email it to them after, as well, to make sure there are no misunderstandings!
Remember these tips, and you’ll feel totally confident the next time you’re faced with negotiating a deal.