April 25, 2017

Professional Services Marketing: You Get the Fees You Ask For

Negotiation is as much about a healthy sense of entitlement as it is about anything else.

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Story

Years ago, I had the opportunity to participate in one of the best negotiation training courses I have ever experienced. The course was meant to teach sales professionals how to get prepared to negotiate. In the line of work I was in at the time, there was always a huge risk that money would be left on the table.

As most of the people in the world who have participated in role play exercises, I hate role play exercises. In most cases, they are a complete waste of time. In this negotiation course, I was pleasantly surprised to participate in a role play exercise that opened my eyes to a very important, and critical component of effective negotiation.

Role Play

Role 1 – You were to pretend to be an agent for a musician. The musician was basically a washed up former pop star, who at one time, was revered all over the world. Your job was to negotiate a record contract with a record company executive. Your job was to negotiate the highest price possible for your client.

Role 2 – You were to pretend to be a record company executive. You were well aware of the artists past, and present. Your goal was to sign the artist, and make sure you spent as little as possible doing so.

As the role play progressed, it became obvious what the point of the role play was. The role play itself was very effective because neither of the roles knew what the facts of the other role were. The role play was as close to real life as it could be, because neither side showed their cards.

As the exercise was concluded, as a group, the people playing the role of the agent were asked to give the amount they were able to negotiate. Most of us were in the low millions. One woman was able to negotiate a fee that was seemingly off the charts, given the circumstances. 

I could not, myself, comprehend why she even would ask for such a fee, never mind get it.

You Often Get What You Think (Believe) You Deserve

So, in classic Vin form, I asked her, in front of everyone, what the hell she was thinking. Her answer has never left me, and was the model the instructor pointed to at the conclusion of the exercise. She said, and I paraphrase, “I asked for that amount because I thought my client deserved it.”

BOOM!!!

Here we were, a room full of very seasoned sales professionals, who regularly negotiated contracts worth millions, and only ONE of us got it right.

Conclusion

First, before anything can be said about the story above, you must know that negotiation for your services is never a simple thing. You must be prepared with every known fact at your disposal, and a list of assumptions about the things you don’t know. That said, and within reason, your strongest weapon in any negotiation setting is a very healthy sense of entitlement. 

Notice though that I said healthy. Healthy is not stupid. You cannot ask for things that you are not entitled to ask for. The key is to find that line, and in most cases, that line is beyond the limits you set for yourself.


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