Processes · Negotiation
The Negotiation Playbook.
Negotiation is the final step in our sales process.
Whilst the idea of closing the biggest deal of your life, and securing more commitment from one client than you've ever achieved before may seem daunting, it's important to remember that the process you've been through will make this at least straight-forward.
The key to this final part of the process is that we have already confirmed with the client that they have a problem, a problem we can measure, and one which we can solve. We've also agreed that they like our solution and that they believe it can work for them. Therefore, we are not trying to close them on the full commitment in one go, we have already implicitly closed them on their desire to buy from us. We have reached the final step on the commitment ladder; simply agreeing terms.
We kick off the meeting off with a summary of the conclusions from your discovery meetings.
This could be displayed in a simple slide deck. Use the overarching commercial goal or desired end state as the headline for the deck eg, "How to achieve [X: goal], by [Y: date], with support from [Z: your company]":
- On the first slide state the commercial context and goal.
- On slide two state the problems and the specific issue caused by hiring.
- On slide three show how you would measure that number and give an example of some projections. (Eg, a graph with time to hire falling as the impact of the time spent on other mission critical work increases).
- On slide four list three of four case studies of where you've done this for others. (Maybe include their logo. Include how you got these results.)
- On slide five, give a bullet point overview of how your products would help the client achieve their goal.
- On the final slide restate the goal.
Don't dawdle, you should be able to give this presentation in under five minutes. Of course, for brevity, you could include all this information in just one or two slides.
There is incredible power to having the final slide in the deck stating the overarching goal, and having it remain visible as you negotiate terms. This helps ensure nobody loses sight of the value of what you are trying to achieve.
“You may be expensive for a recruiter, but your help achieving their biggest corporate goal is priceless.”
💡 Prepare a simple slide deck that covers, their problem, how it can be measured, how you can address it, the impact and results from addressing the problem and perhaps a couple of case studies, along with an over view of your core products or recommendations.
Todd Caponi is the author behind two best selling books - The Transparency Sale and The Transparent Sales Leader.
In the Transparency Sale Todd introduces the concept of transparent negotiation. This is where you state to your client at the outset of a negotiation, the variables that affect your price and the limits which you are not able to go below.
This achieves a number of goals.
- It stops your clients from asking about price until the other elements have been discussed
- It reduces the likelihood your client will ask for concessions on every element of the deal
- It ensures you can address any non-negotiables from their side upfront
Having reestablished the case for change and our ability to deliver this transformation, we now need to agree terms. First up; how we'll work together.
In this part of the negotiation you should first outline the products or services you offer. This is best done in three tiers. Aligning your services in this way will help you to close on the highest fees possible whilst ensuring your client gets the best possible value from working with you.
Your products or tiers will consist of a combination of the elements of your service.
You will likely include some of your services in every tier of your offering. For example, counter-offer protection, or candidate screening will be the same no matter what offering your client choses.
Other services will be included across all of your products to a differing degree. For example, your approach to mapping out the assessment process might be more comprehensive in your premium product than in your basic offering. For some services, your premium offering might include a Done-For-You (the client) option, whilst in your basic offering the service is a Done-By-You (the client). In the mid tier product the service might be Done-With-You. Note, for some services, the Done-By-You offering might be the premium solution and vice versa.
Finally, some of your services will only apply to some of your service offerings. For example, talent pool data might only be offered as part of your premium product.
The crucial thing to note when building your products is that they are not differentiated by payment terms, exclusivity, or contract duration. They differ only in the services offered. That is to say, all three of your options may have the same upfront payment component (33% say) and they might all come with a 6 month minimum contract. What is being negotiated first is the service level required to help your client best achieve their goals.
They may not come to a firm decision on the level of offering but discussing what they need first enables you to manage the rest of the negotiation much better.
Once the product levels have been discussed and you have some indication from your client over the level of service they desire you can move to discussing commitment.
There are some key components to the commitment you'll be able to target.
- Duration of contract (typically 3-12 months, aim for 6 initially)
- Number of hires (aim for however many hires you think is reasonable to have a meaningful impact)
- Break clause (ideally no less than 3 months or 3 hires. Commitment here isn't typically legally binding so in truth they can get out any time).
Framing is important here. Rather than using phrases like, "what we need from you", or "all we ask" it's better to frame commitment in terms of what others decide is best. For example:
"Ok so I understand that our middle package is most suitable for your needs right now.
How long do you feel it might take to make meaningful progress in levelling up the way you hire?"
"With that level of support we'd expect you would see meaningful results within the first 6 months.
In fact, most of the businesses who opt for that level of support chose to partner with us for an initial period of 6 to 12 months. That ensures they get support improving their approach to hiring over the next few hires and enough data that we can track the progress we're making together. After that, in some cases they want to increase the support and make more progress, in some cases they feel they need less support, and from time to time they'll opt to progress without us."
Bare in mind that what a clients gets from you for their 6 month commitment is not simply 6 months worth of hires, but continued meaningful progress in improving the way they hire. This commitment will include actions you take before their hire and between hires in the period. It will include wide ranging conversations with all the necessary stakeholders. In fact, that first six months working together could, in itself, give them the competitive edge they need to achieve their biggest corporate goal.
Adding in a break clause enables you to make a concession without compromising the scope of the agreement. For example, a six month contract with a review after the second hire, gives the client some sense of security, whilst allowing you to close them on a full half year commitment - rather than reducing the agreement to 3 months for example.
It's possible that, despite the obvious value you add, your client will be reluctant to make a 6 month commitment - or even commit beyond the next hire. That's OK. In fact, for some of my clients, this is the expected outcome. When this situation occurs they offer to work the next role but on a retained basis. The rationale being that they cannot offer the same level of service to a customer who will not work with them over a defined period of time as it wouldn't be fair to those who've made that commitment.
Another alternative is to offer only the basic level of service on a one role basis. This involves you positioning your middle and premium offering as only accessible through a multi-month or multi-hire contract. Again, this is reasonable and undelines the value of the commitment. It also gives you an out if the client wants to move quickly on their next hire.
The last step in your negotiation will be to agree a price for the service you are offering based on the commitment the client is making.
What you charge will typically depend on what your client wants, when they want it and what they are prepared to give in return. What you charge will depend on your market and on your level of comfort with your fees. It might also vary depend on the nature of the opportunity represented by the client - although a lot of money is lost be those who negotiate based on a promise of future business.
Along with the amount you invoice there are a few factors to consider when signing a multi-hire or multi-month contract.
- Do you charge per hire, per month or a hybrid?
- Do you charge upfront? If so in full or in part?
- What conditions affect your fees? (Eg. only honoring discounts if invoices are paid on time)
Having agreed - in principal at least - the level of service, and the scope of the commitment you can lay out your fees with confidence. If your client feels the price is too high based on everything you have discussed you have a few options:
Reduce the level of service. This might mean dropping down to a lower tier offering, or creating a hybrid product specifically for them.
Increase the level of commitment. This could mean seeking a longer contract or one covering more hires. This is a bad move if your terms mean they pay per hire - you're effectively negotiating against yourself. However, one option would be to reduce your fee conditional on them making a certain number of hires. In the event that they don't make the required number of hires, you'd then invoice them for the balance.
I strongly recommend ensuring that any reduction in fees has a time limit (and usually other clauses, such as on time payment of invoices) and that this is clearly stated in the contract. This means that in a worst case scenario, should your terms lapse your next fee with the client would be at the full rate - rather than at the discounted agreement. Doing so makes it easier to get your clients back to the table to renegotiate terms at the end of a given period.
By the time you've agreed what your client is trying to achieve, what they need to do, how it can be done, how it should be delivered, and the necessary investment you can be pretty confident of closing the sale. In fact, closing can be as simple as agreeing next steps. There may however be unmet needs or unspoken objections. Flush these out using the trial close process.
Ok, sounds good. So if at this stage I were to suggest we make a mutual commitment, and to raise a contract that describes everything we've discussed today, would there be any reason you'd not be happy to sign and for us to get started working together?
The trial close is always necessary, as it helps surface anything that could derail the deal.
Once you have addressed any objections and formed an agreement use this moment to create an action plan with the client. Diarize a face to face meeting as well as introductions to any stakeholders who've not been present.
Once the plan is set document everything and share it with your client. Being clear about what they have agreed to and how the process will be executed is key. Recruitment is far too big an investment to not provide a receipt. Yet most of the time our terms of business simply state what the client is expected to pay, when and what happens if they don't. Recruiters who provide a written Service Level Agreement are far more likely to see the client cooperate and collaborate as expected.
You should also seek feedback on your sales process. Find time to speak with the client on the phone about how they felt the process went from their perspective and what you could learn going forward.