Is This How Your Clients Treat You?

Budget overruns, price negotiations, and zero-dollar line items.  We’ve all done them, and if not, they’ve been asked for.  Enjoy this little video for the next two minutes, and then come back for more:

Sorry for the cliche, but in “these tough times” everyone is angling for a discount.  Thin margins are being attacked.  How do you respond?

Consumers of professional services rely on your fear of rejection when they engage in discount games.  What if I say no?  Will I lose my client?  What if he goes to my biggest competitor?  These questions, in the heat of negotiation, often lead to reduced or eliminated profits – and worse, the loss-leaders.

What’s missing is information.  Information you NEED to know to make good decisions.  Fear comes from NOT knowing what your client thinks and feels about the services you provide.  Fear leads to irrational, emotional decisions that erode profits, and ultimately reduce the long-term perceived value of what you provide.

Feedback, collected frequently and consistently, will let you KNOW what your client thinks.  You can be confident to what level he VALUES your services.  There may be clients who legitimately feel like they got less than they expected – but most are simply negotiating.  With 50% margins, negotiation might be okay.  But that’s typically not the case.  A 10% discount will most likely lead to 50% of your profit evaporating before your eyes.

Start asking for feedback early in the relationship.  Continue asking throughout the project lifecycle.  Then, when the invoices go out, and negotiation begins, you know where you stand.  You may still choose to drop your price – but most likely you will feel confident that it’s not needed.  After all, you met or exceeded expectations consistently, so why should you?

Just ask!