Who remembers the advertisement for deodorant with the memorable line, "Never let them see you sweat." (I know, I'm dating myself but when a line is memorable, it's memorable.)
I was reminded of this recently when I had a small construction job priced out by a builder. I know times are difficult for all because two years ago when I wanted this job done I couldn't get a contractor to call me back. And if one did, he was booked out four or five months and the prices were pretty steep. And you had to keep calling the contractor to find out when he was coming. When times are good, everyone is cool and collected and picky thinking the gravy train will never end and they will always be needed. I know of several contractors who deliberately overpriced jobs to dissuade the customer because they didn't need the work. Yet the customers would still pay the inflated price because they were desperate.
Now the tables are turned. You make a call and the contractors are polite, call you back immediately, visit the next day with contract in hand and they are only booked out two weeks. But surprisingly they can do the job the following week if you ask really nicely. You can smell their desperation. This 'smell' has one of two effects on the customer. Either the customer feels empowered and inclined to look to chop the price down further which then makes the vendor feel like they are begging for alms, disinclined to do anything 'extra' and certainly could impact the quality of their work and the customer's ultimate satisfaction. Or the customer feels sad and empathetic going out of their way not to take advantage. With the latter they don't necessarily negotiate properly because they feel sorry for the vendor. In addition, they may not want to use the vendor again for a myriad of reasons. All reasons make the customer uncomfortable. Neither position is a good one for either party.
The more specific example: we negotiated recently to take the wall down between our dining room and family room. It was a job I knew shouldn't cost more than $1500. We called back a contractor who had done work for us before. Why? Because he does a good job and has always been fair. When he came to price the job he came back with this outrageous dollar amount and I knew it was because he was hurting. He was only booked out two weeks meaning he was coming into the prime summer months with nothing and bills to pay. I literally could feel his desperation for the job. It was off-putting because I felt I could not properly discuss a fair price for the job. I told him my budget, that I had priced it out responsibly by a builder I trust but who was not from the area.
He got visibly upset because he thought he was going to lose the job. Why? He made a big mistake. He was counting the dollars first. His need for a job didn't allow him to handle the pricing properly. He didn't price the job for the job but priced based upon his personal need. He let me see him sweat. Because I knew him, I told him how I felt. My husband thought I shouldn't...just give him some extra dollars.
This is no different than solos who are just starting out. There is a fair market value and range for your services whether through billable hours, flat fee, value pricing or any other combination. It is a range the clients are generally familiar with. Knowing times are difficult you will meet clients who will look to negotiate downwards smelling your desperation for business. It is very hard to stay cool, value yourself and your time when the student loans are coming due.
But here is what will happen if you give in to that desperation. You will be disgusted with yourself. Angry at your client. Start to dislike the work you are doing. It is a slippery slope. Your client will feel disgusted with themselves (and you) for being able to take this type of advantage. They will ultimately not be happy with your work because they devalued you the minute you devalued yourself. And they will also not refer business to you unless it is someone else who will look to knock down your pricing further. Lack of self-respect during the discussion of your fees will have untold repercussions.
But it must be done.
- Sharpen your pencil and be creative if you must, but focus on the matter at hand while being fair to both yourself and your client;
- Don't overprice because you think 'they can pay' as you fret about unpaid bills;
- And once you've stated your fees, stop talking. The next words should come from the client.
Most importantly, never let them see you sweat.