Negotiation For Freelances

Negotiating the terms of a project can be one of the most difficult things for freelances to manage, after generating new business. For those without a commercial background, such as copywriters or graphic designers, hammering out a deal can feel a very long way from the comfort zone. It may become a source of real anxiety that taints the enjoyment of the ‘real’ work to be done.

That’s a shame, because negotiation is a skill that can be acquired by anyone. While some people have a natural flair for negotiation, the rest of us can still learn how to apply the basic principles, achieving a huge step forward from ad hoc, reactive or emotional approaches that deliver mixed results at best, frustration at worst.

Preparing to negotiate

The key to successful negotiation is preparation. Thinking through what you will and won’t accept, and your alternatives, puts you in a position of power right from the start. Without preparation, you’re entering a competition without really knowing the rules – so don’t be surprised if you don’t come out on top.

Your top line

Your top line is the best deal you could hope for in the circumstances. In an ideal world, what would you like to agree in terms of price, timescale, working method and other factors? Know this in your mind, or ideally write it down, before negotiation begins.

This might seem pointless – surely we all just want as much cash and time as possible? That’s true in a sense, but of course there are limits to both. Realistically, rates are dictated by your experience, the market and the economy, while timescales can never be completely open-ended. Psychologically, it’s much easier to aim for an absolute goal (“$x per day”) rather than a relative one (“more money”). After all, another $5 a day would be “more money”. Would that satisfy you?

Your bottom line

The converse of the top line is your bottom line: the worst deal you would accept. As with the top line, consider the minimum rate, shortest timescale and least convenient terms that you could live with. If the terms are worse than this – in any one aspect, or more – you’ll decline the project.

Take everything into account: the need to make a profit, opportunity cost (if you do this, you can’t work on something else) and emotional impact. Financially, it’s probably better to be busy than idle, but if the terms of the job make you feel miserable and used, the knock-on effects on your motivation just aren’t worth it.

The bottom line is an important safeguard against accepting the wrong terms in the heat of the moment. Like an automated ‘stop loss’ in investing, it protects you against your own fear and greed, setting a rational limit on what you’ll accept before you walk away. Crucially, you do this before you negotiate, rather than bumping up against it during the negotiation or (worse) realising that you’ve gone beyond it when it’s too late.

Your BATNA

‘BATNA’ stands for Best Alternative to a Negotiated Agreement. Your BATNA is whatever you will do if an agreement cannot be reached with your client.

Getting a concrete sense of your BATNA gives you a sense of perspective about the consequences of not getting the project. Instead of entertaining apocalyptic imaginings of going bust, losing your house and becoming a vagrant, you create a realistic picture of the outcomes that will result – and the actions you’ll take – if no agreement is reached. For example:

If I don’t get this work, I’ll…

·…work on my other projects, but in a more leisurely and enjoyable way

·…spend some time networking or marketing myself

·…acquire a new skill

·…do something outside work I really enjoy, and return to work refreshed

The point here is to focus on what will be gained if this opportunity does not proceed, not just what will be ‘lost’. As the Zen saying goes, ‘every exit is an entry somewhere else’. (And you can’t really lose what you never had.)

Working up your BATNA takes the sting out of your fear of loss, so you understand that missing out on this deal or project isn’t the end of the world – just another turn in the path.

You are now armed with the three key parameters of a negotiating position: your top line, your bottom line and your BATNA. Let the games begin!

Choosing the channel

While the content of the negotiation is obviously paramount, the channel you use to negotiate can have a significant impact on how things pan out. In other words, it’s not just what you say – it’s the way you’re obliged to say it.

· Face-to-face negotiation can be daunting, but brings the advantage that you can read the body language and facial signals of your client. The choice of venue can be key; negotiating on your ‘home ground’ feels reassuring.

· Email provides ample time and space to consider your response and a written record of every move in the game, but your only feedback is what the client chooses to include in their emails.

· Phone can be the worst of both worlds, with no visual feedback and no time to respond either. However, many negotiations do end up being conducted by phone. Help yourself by choosing quiet surroundings and using the clearest line you can (i.e. a landline).

If you can, take charge of the situation by initiating negotiations in the channel you want, rather than passively waiting for the client to choose one. There’s nothing worse than taking a client’s call unexpectedly and being pitched into a negotiation without warning. Similarly, if you feel pressure during the proceedings, consider asking for a time-out and moving the negotiation to a channel you feel more comfortable with.

Handling the negotiation

· Choose your style. Everyone has their own negotiating style, and it usually flows from their personality. If you’re naturally bullish, you may feel comfortable with an ‘in your face’, aggressive approach. If you’re more laid-back, a more conciliatory, co-operative style may work better.

· Banish emotion. It is your enemy. Handling negotiation is about presence of mind, rationality and balance – like playing chess. Remember: he or she who cares least wins. If your client gets emotional, try to defuse the situation, perhaps with a time-out.

· Look for trades. Negotiation works through quid pro quo. Determine what’s important to the client, and weigh it against what’s important for you. If you’re quiet right now, could you offer faster turnaround in return for a higher price? Or, if you’re just starting out, how about a lower price in return for a glowing testimonial?

· Get their information. Probe the client on the factors behind their stance: how they want to work, the aims of the project, budgetary constraints and so on. There may be an opportunity to trade, but you need to know what they want first. Savvy clients will know that disclosing budget weakens their position, so just get them to chat on a general level and see what comes out.

· Guard your information. Be aware of the value of certain information; by disclosing it, you may cede the advantage. For example, a seemingly innocuous enquiry about how busy you are, or your experience in certain areas, may be the prelude to price pressure. If you don’t want to reveal, try a vague or non-committal response – many clients won’t want to press the issue.

· Make space and time. Don’t be afraid to ask for time to respond. For example, many prospects ask for a ballpark price during the very first call, but quoting a big-sounding number without context can be fatal. You need the chance to put a proposal together with price and service information, communicating value as well as cost, before negotiations begin.

· Know your value. If you’re invited to make your price ‘more competitive’, but it’s competitive already, say so. Restate all the things you’re going to do for the price proposed, making it clear what a great package you’re offering. Above all, remember that although the client has a choice, they’re talking to you; they want you to do this project. You are not powerless.

· Cite authority. If you can, refer to an authoritative third party to back up your stance. For example, many industry bodies have standard rates that can be useful. However, since they’re intended to prevent exploitation, they’re admittedly more likely to bolster your bottom line than give you a target to aim for.

· Walk away. If the client repeatedly offers terms below your bottom line, politely decline the project. Do it calmly and unemotionally, with a smile, and certainly with no feeling of ‘paying them back’. Remember, it’s just business. To emphasise this, you could apologise for being unable to meet their expectations, or wish them luck in finding a supplier who can meet them. They may counter-offer, or they may not; as things stand, this isn’t a job worth going for.

After the negotiation

· Record commitments. As soon as you can, set down the agreement in writing and get it agreed. There’s nothing worse than thinking you’ve got a deal, only to find your recollections of the conversation differ. You might even want to enlist the skills of a professional copywriter to help you.

· Chase up. If the negotiation stalls (for example, you submit a price by email and receive no response), make sure you chase up the client to find out why. Sometimes, you might feel that you don’t want to know – that the information can only undermine confidence. But it’s always better to know.

· Look for learning. Finally, review the negotiation and think about what you could have done differently. Even if you achieved your top line, there will still be details of technique that could be improved.

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