Has your client requested a re-negotiation of your contract prices?
As you prepare for the discussion, these 3 tips may be helpful...
IT'S NOT ALL ABOUT PRICE
No doubt a downward review of your contract price will be sought so you do need to think about how low you can go without going out of business. However, what your customer really wants to achieve is a reduction in their operational costs. So before your negotiations commence, take some time to consider efficiencies you can suggest and quickly implement to reduce their cost base. It is important that these efficiencies can be implemented quickly to start yielding results. Go into the negotiation with comprehensive details of such efficiencies including timelines and projected savings to be derived. Benefits? it earns you respect, gives you an edge in the discussions and most importantly, projects your company as a worthy long term business partner.
THINK ABOUT WHAT YOU WANT
Go in to the negotiation meeting with your own non-price requests. Even though the negotiation may be at the instance of the customer, it is good practice to go in to the meeting with requests of your own. Think about what you want that may be relatively easy for the customer to grant you. A longer term contract? Perhaps better payment terms? Or revision of a non-price contract term? Quite often, some of these requests are easy to oblige, at little to no cost to the customer. Something to remember is 'you don't get what you don't request for' ... so be sure to ask. As you make concessions, the customer will be receptive to reciprocate, provided your request does not erode the concessions you have offered : - )
THINK LONG TERM
Don’t be fixated on the short term. If the customer relationship is one you want to preserve, then think long term; think win-win. What is the best way to work together for mutual survival during these challenging times?
An example may be to fix your discounted price for a period or to link your discounted price to specific events; for example ‘in the event the oil price increases to X; the discount will be reduced from 15% to 10%. When oil price increases to Y; the discountwill be retracted.’ These kinds of arrangement enable better discussions and foster mutually beneficial relationships.
If you find these tips helpful, do checkout a short online course 'Mastering Negotiations' which will prepare you to achieve successful contract negotiations. For a limited time, you can register here for FREE. Only available for a limited time!
What has your experience been negotiating your contracts during these challenging times? Please share your experience and any tips that worked for you.
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