5 Traps To Avoid When Negotiating With Clients
Ashley Stahl | Forbes
Negotiating with clients, whether new or old, is a difficult art to master. There are established strategies we tend to go by, but many of them are less than ideal, as they’re generally based on being more aggressive.
While that may work in certain circles, it can really dampen the relationship between you and an ongoing client.
As a business coach and the founder of a ghostwriting house, I spend a lot of time working with my clients to find the happy medium. It takes time to become a seasoned negotiator, but learning how to be assertive without souring a relationship is a crucial first step. I’ve laid out some that I’ve encountered while negotiating for my own publishing house.
Here are some important traps to avoid being taken advantage of without stepping on too many toes.
1. Not Having Your Priorities In Order
Not all concessions are equal. When you walk into a negotiation, you must know exactly which points you are willing to concede on, and under what conditions you’d be willing to give them up.
Author Adam Grant also recommends a strategy called rank-ordering, in which you actually make your priorities known to the other party. If they reciprocate, it’s a great way to reach a mutual compromise.
2. Choosing The Wrong “Anchors”
Stanford Business School defines anchors as part of the parameter for negotiation, or basically the two prices you’re bargaining between. The term “dropping an anchor” means having a hard stop on what pricing you’d be willing to accept, both at the minimum and the maximum.
If someone comes in at a number that’s just a tad below your anchor, you can let them know it’s simply too low, and to give you their best price they can. By going into a negotiation knowing your top and low number, you’ve removed yourself from the emotionality that can happen when negotiating.
Walk away if you cannot come to ground within your anchor prices.
3. Letting Them Make The First Offer
Somewhere along the line in our modern society’s development, we’ve gotten the idea that making the first move in a negotiation gives you the weaker hand. We prefer to play defense over offense.
However, this idea is false. The higher the first offer, the higher the final compromise generally becomes… By you setting the first anchor, you have established a higher playing field.
This doesn’t apply to job hunting, where I’ve told clients that the first person to give away a number loses, but it certainly applies to negotiation as an entrepreneur.
4. Unreciprocated Concessions
Negotiation is a give and take. After you’ve thrown your anchors out, and you’re both stuck in the negotiation, it’s time to consider an exchange of concessions. And remember… Nothing is worse than giving so many concessions that you’re surrendering, more than actually negotiating.
Going into any negotiation, it’s key to know your anchor numbers, as well as any concessions you’re willing to give. You don’t want to leave feeling like a refrigerator that’s been totally raided.
5. Being Overly Invested
When dealing with existing clients, you’ve obviously put in a great deal of time and energy, and you feel invested in the project. Since retaining clients is more cost-effective than gaining new ones, you’re very eager to close the deal as soon as possible.
But this attachment is what causes you to make mistakes. If you and your client or potential client cannot make a mutually agreeable deal, you have to be willing to walk. This is key for any effective negotiator to hold.
Becoming a seasoned negotiator takes time, effort and dedication. But it pays out in dividends.
As the founder of an online coaching business, as well as a ghostwriting house for influencers, negotiation is something that happens on the regular in my world. These five keys are a great start — and if you avoid these traps, you’re on your way.
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