I’ve mentioned Mike Sparkes in this blog before. He was my first sales boss, my business partner, my mentor and my friend and he taught me pretty much all I needed to know to get started in sales. Well this is another one of his little gems.
Imagine this. I’m negotiating with my first real freelancer and a client I’ve just won all by myself. The objective is to find a pay rate the freelancer is happy with; a margin that we are happy with and a charge out rate that the client is happy with.
Rule #1: always anticipate each possible scenario in the negotiation and have a clear response for each one.
Mike sat down with me and we did this. He asked questions that made me explore the possible things both the client and the freelancer might say and then decide how I would respond in each case. Ready to go then!
Rule #2: if something comes up you haven’t planned for, especially if it involves money, ask for a “time out”.
Got a rate from the contractor; add our margin (plus a bit more) and present it to the client. Client says he wants to pay less (anticipated) so I suggest a figure which gives us our margin; client asks for a bit more off (anticipated) I suggest we keep the rate the same but take a reduced margin on any overtime worked (we know there’s going to be some). Client agrees.
Back to the contractor. Suggest he has to take a lower rate (ever hopeful); contractor counters by saying he has just been offered another role and he wants more money not less (totally unexpected). I ask him how much he wants and tell him he can have it (epic fail).
What I should have done was say I needed a few minutes and I would get back to him obviously better prepared. I didn’t and so Mike had to get the sales director’s permission to do this sub-standard deal. Egg on faces; mostly mine!
Rule #3: make sure all the details are nailed down before you give a firm “yes”.
I suggested we go back to the client and try and get some more money. Mike said that was understandable and we might even get it but we’d made a deal and we had to stick to it. His belief was going back on deals was bad for your reputation and should be avoided.
My mistake was giving the client a firm “yes” before I’d closed the deal down with the freelancer. If I hadn’t done this I could have gone back for more money since the freelancer had changed the rules. Well you live and learn I suppose.
From that day onwards I have tried to follow these 3 simple rules and most of my howling negotiation cock-ups have arisen because I broke them.
Image courtesy of Vlado / FreeDigitalPhotos.net
