Are your clients saying you are too expensive?

I am sure more than one client has told you that your proposal is too expensive. Sometimes, perhaps, with the additional information that your main competitors fees are half that of yours.

What's your initial response when this happens to you? Do you immediately worry you will lose the business unless you give the client a discount on your fees? Or are you like the skilled negotiators we have looked at, who respond by clarifying the situation to ensure they fully understand the issues involved, before taking time out to plan what their response should be?

If you take the time to think about it there can be several reasons why a client tells you your fees are too high:.

• The client might have a budget constraint that makes it hard to find the money, even though they see your offering as good value for money.
• It could be a negotiating position to see if you will reduce your fees.
• It could be true that you are more expensive than the competiton.
• It might be a way of letting you down gently because for some reason they have decided to place the business elsewhere, perhaps because they view your solution as being too risky, or too difficult to implement.
• It could be that the client doesn't yet appreciate the full value your solution can bring.

Before you make any fee concessions you need to know which of the possibilities outlined above is correct. Discounting the fees will hardly help you win the business if the real issue is that the client is worried about the difficulty of implementing your solution.

If the client has a real budget problem, reducing fees could help. But it might be just as easy to phase payments to meet the client's budget needs and still get the full rate.

Time spent ensuring all the benefits of the solution have been quantified and communicated to the client, might change the perception of value and remove the need for significant fee concessions.

Eliminating the possibilities outlined above, you are left with the knowledge that the fee objection is a negotiating position. Before starting to negotiate you should perhaps ask yourself why the client is still talking to you if you are so much more expensive than the competition? Surely, if the client can buy an equally good solution for half the price they would simply say "no thanks," and walk away. The fact you are still involved in discussions must mean they really want to buy from you. Perhaps you are not in such a weak position after all.

So before the negotiation, a little time spent planning what you want to achieve and how you will persuade the client could be time well spent. There might be a need to make some fee concessions to win the business but it's crucial to know what you can trade in exchange for maintaining a profitable deal. Brushing up on your negotiating skills might also help you gain better deals.

Why not read our white paper 'Are your people negotiating or concession making' or take a look at our training programme on Negotiation, and be one of the skilled negotiators who gain better deals.