Is Haggling Worth it?

July 13, 2009 at 11:25 pm Leave a comment

Over the past few years, we’ve noticed an upwards trend in clients and prospects trying to negotiate a better price.  It’s probably related to the economy, or it could be related to the increase in inquiries we have, but either way, it’s high-time we cut out a lot of stress for small businesses and a lot of headaches for us and share some insights on negotiating with services-based industries.

When you haggle, you are hassling your future business partner.  We work with customers everyday, many of which agreed to our pricing without a problem.  So what is so valuable about your business that we should be willing to give you a discount?  You’ve already proven that you’re not as easy to work with as the clients that didn’t try to negotiate.  The bottom line here is that you want each business venture you enter to be a positive experience so unless you can bring something extra to the table, forget the price drop.

When you win a negotiation and get a lower price, you literally become a less-valuable client.  Many clients don’t see it this way, but this is exactly how companies view it.  If you put in a request at 10AM and another client puts in a request at the same time and pays 10% more, you can guess who the priority goes to.  It may not be fair, but it’s reality and something to consider when negotiating.  Can you afford to draw the short straw?

Some Rules for Negotiating:

  1. Be a Repeat/Recurring Client
    • If you’re bringing us more work, we tend to be less sensitive about our pricing and more open to giving you a break.  Plus, we already know how to work with you and if you’ve proven to be an easy client, most of the time, we’ll be more likely to give you a “you make my job worth doing” discount.
  2. Do not compare us to your other designers/coders/etc.
    • If they were that good for their price, we wouldn’t even be having this conversation because you’d still be using them.
  3. Have a budget
    • All clients have “very tight budgets” for services.  Saying this is like telling the cop that pulled you over that you’re running late to work–join the club.  We’ll be more inclined to lower our pricing if you have something in mind that is slightly lower than we propose.  “We were hoping to only spend $2,500 as apposed to $2700” is a lot easier to swallow than “Is that the best you can do?” We are not used car salesmen and those of us that are good, do not need to discount our pricing to get business, we do it because we want to or we want to give thanks to a good client.
  4. Be a good client
    • Being nice, paying on-time, or offering to pay more than the deposit up-front will get us to realize that you’re going to be a good client, even if we haven’t worked together before.  We like good clients and we like to reward good clients.  Besides, being courteous is just good for business, regardless of who you’re dealing with.
  5. Be realistic
    • We are not the housing market.  If you insult us with a suggested price, most of the time, we paint you as a bad client and not someone worth doing business with.  The perception is that you don’t value what we do and if you were to agree to our pricing, you’d expect the moon and stars beyond what was outlined in the contract.
  6. Be creative
    • We may not be able to lower our package pricing, but perhaps we can throw in an extra design concept or take time off the books to show you how that content management system works.

We hope you found this article helpful.  Please feel free to share you negotiating tips with the rest of the community.

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