What do you say if your Client uses The ‘C’ Word?

As the market recovers, misguided clients will try to push down agency fees.

Under the flawed impression that ‘recruiting is easy now’ and ‘there are lots of candidates because of Covid’, some employers will try to leverage recruiters on fee, and they will use both old tactics and new.

I have blogged about how you need to move the focus away from dollars and percentages when clients negotiate fees and on to your value and your differentiators.

But often recruiters tell me clients keep pushing, and they say something like, “but your competitors charge less”.

And it’s this use of the “C” word that often scares recruiters.

The ‘C’ word?

Competitors.

Check out my Sixty Savage Seconds, one-minute video where I explain how to deal with this.

Watch the video on YouTube here

I love it when clients use that word. If they do start to talk about competitor’s low fees, your response is to ask…

“Can you tell me about a situation, Ms Client, where you were charged less than the fee I am suggesting today, where you got the level of service and the calibre of talent you want – regularly?”

True, this is a gamble, but the fact that you are there, in the client’s office, taking the order, or even on the phone taking the order, means that it is most unlikely the client is happy with their current supplier.

It amazes me when a client spends 20 minutes bagging another recruiter, and then when I quote my fee – he says, but the other recruiter only charges 15%! (Of course, they do! They can’t deliver!)

That is the time to remind the client that a low fee, quoted by a supplier who does not deliver, is not a benchmark you will measure your prices against. And nor should the client.

Sometimes the client pushes hard for a reduced fee. When that happens, don’t feel pressurised. It’s a purely commercial decision – and you decide. Is this client and this order so attractive it is worth taking a lower fee for? What is the opportunity cost if I spend time on this low-return client?

Remember this before you discount next time. Don’t think of the fee-only as dollars gained or lost – think of the fee as what your service is worth.– never forget that.

But sometimes, you feel it is worth a compromise to secure a special opportunity. In these cases, I emphasise one golden rule.

Never reduce your originally quoted fee without extracting a concession from the client.

In other words, if you say, “My fee is 20%”. And the client asks for a discount. And you quickly respond with, “OK, how does 15% sound?”. You have just signalled to the client that you never believed in your value proposition and your service in the first place. You will struggle with getting his/her respect ever again – and you will never get your fees back up.

So if you reduce your fee, always ask for something in return – exclusivity maybe, client-paid advertising maybe, the client gives you multiple orders perhaps, or perhaps you waive the guarantee.

Make sure the negotiation involves both sides giving. This way, the equal partnership is intact.

So is your self-esteem, by the way. And in our business, that’s crucial.

A discounted fee means a discounted you.

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