Negotiating Your Way to Higher Profits

If you’re actively meeting with clients, I don’t need to tell you that it’s crazy out there. Many firms are busier than they have been for some time, but they’re having to adjust their expectations. The old ways of working aren’t working. Clients are demanding more and offering less. They want more control, more involvement in purchases and, above all, more transparency. Forget about pricing schedules, markups, expenses, and the rest. Everything is up for negotiation.

Where does that leave you, the designer? You need to get creative about how your sell your services. Put aside what you were taught about how to charge and focus instead on what you need to earn. What makes a project profitable for you? How much do you need to bring in above your costs, time, overhead, etc. to meet your revenue goals? Set that as your target, and then put together a package of services that addresses the client’s needs and desires with that price tag. Prepare in advance a list of options and “upgrades” so you come to the table prepared to negotiate. Decide in advance where you can make trade-offs without compromising the quality of your work or your value as a professional. Negotiation is a two-way street; it’s not all they take and you give. You enhance your value as a professional by setting boundaries around what is negotiable and what is not.

There is a story told in Marketing 101 classes about a grocer who tried to move a big shipment of canned tuna fish by marking the price down from 35 cents a can to 29 cents a can. He didn’t get much response, so instead he put up a sign, “three for a dollar,” and the tuna flew out the door. The lesson: Buyers will pay for “perceived value.” But you have to understand your client well enough to know which of your services they perceive as having the most value. Then charge the most for that.

If you’re not certain about how price or package your services, or if you are stuck in difficult negotiations with a client, contact us. We have helped many designers develop the models or skills they need to achieve their full earning potential.

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