Meet your pricing committee

Dealing with discounts, consultatively

Several recruitment leaders have told me recently that clients are negotiating much harder on fees - and it’s costing them.

Maybe the clients are reacting to the market, maybe they need to cut costs, or maybe they just enjoy the power play. Whatever the reason, if you get your negotiation wrong then you could lose be losing a big chunk of your fee.

Let’s start with the basics: negotiation is hard. Added to that, recruiters are often seen as the lesser partner in a client relationship. And negotiations often set a recruitment consultant up against a much more experienced business leader. It’s no wonder I see agencies take a big hit on their revenue when clients push back on fees.

What we want it to level the power dynamic when negotiating with clients. And (if we’re really aiming for perfection) we’d love to be seen as consultative. It’s what most recruiters are aiming for when they pitch to clients, so if the negotiation phase could reinforce that position then that’d be wonderful thanks very much.

You might be surprised to hear this, but there is a way to negotiate effectively that also helps you position yourself as a consultative partner. Get it right and you’ll boost both your revenue and your relationship with your clients.

All you need to do it create your Pricing Committee.

It’s funny, but I can almost hear your sigh of disappointment coming through your screen (and somehow making its way back to me in the past when I’m writing this) as you realise you have to set up yet another process that takes up your time.

Good news: you don’t.

Just creating the idea of a pricing committee can transform your negotiations. Let me explain the two huge wins from this approach.

1. Thinking time

At the moment, your negotiation likely sits squarely on your shoulders. While I love the autonomy most recruitment consultants have, this is counterproductive when negotiating. All the pressure is on you, and a smart client can use this against you.

When you tell a hard-negotiating client that you need to run their ‘request’ for a discount past your pricing committee, you can step back from the heat of the moment and buy yourself more time to come up with a productive counter-proposal.

And you don’t actually need a pricing committee to achieve this. Sure, talking a tough negotiation over with a colleague is helpful - but just giving yourself a chance to step out of the battle will improve your chances of getting a win.

2. On your side

Time is useful, but being consultative is the real game-changer. In a classic negotiation, you’re up against your client. It’s a fight, with only one winner. Hardly the collaborative, consultative approach you’re trying to sell to your client.

When you bring your pricing committee into play, you can position yourself as on the same side as your client. Now you and your client are both trying to get the best deal for the client, and to do that you need to work together with your client to identify what they can give you in return for a discount, what a reasonable reduction might be, and how they’re still going to get the right outcome from working with you.

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Put yourself in the centre of negotiations, and you’re going to find yourself under pressure and fighting against your client. Create your pricing committee, and you can reach a reasonable proposal with your client.

If you want to know how consultative you sound when you pitch to clients, I'll analyse your pitch deck and send you a personalised 'Value Review' video - just reply and attach your pitch document.

Jon

P.S. When I ask recruitment leaders how they want to add more value, the number 1 challenge is how they can be seen as more consultative. Recruiters are often perceived as transactional suppliers, whose interests aren’t aligned to what their clients value most.

There are a whole range of ways you can present yourself as a consultative partner to your clients. Even in tough situations like a fee negotiation, you can still find opportunities to show that you are an expert peer who can collaborate with your client to solve their biggest problems.

If you want to know how consultative you sound when you pitch to clients, I'll analyse your pitch deck and send you a personalised 'Value Review' video - just reply and attach your pitch document.