Contract for Services. Test Your Skills!
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How do you approach the negotiation of a contract for services with a new client?
Listen to the client needs, and then give a quote.
Share details of your services and your established rates with the client.
Although it is important to share details of the services you offer, once the client hears your rates, he may make the quick decision he can not afford your services.
Share established rates, listen to client and then quote a fee.
Even when a new client asks about your rates, it is recommended you deflect that question until a later time when you have learned as much as you can about the client's needs and objectives.
After discussion, ask the new client to offer what they are willing to pay you for the service.
It is often tempting to do whatever you can to retain a new client. However, with preparation in hand about your competitors' services and rates, and differentiation information, you will be able to confidently set a fee that you can share with your client and if necessary, negotiate successfully!
Question 1 Explanation:
The key to every negotiation is your ability to listen and to ask questions before any proposals are discussed. Allowing your new client to share with you his needs and objectives, and asking follow-up questions, will better equip you to determine the value you can offer, how best to structure your proposal and how best to present your proposal for a contract for your services.
How do you usually negotiate your fees with clients?
You stand firm for what you deserve and do not accept anything less.
Although it is important to confidently present your fees to denote the value you offer, allowing room for negotiation on how you are paid will give you and the client another opportunity to resolve the issue of fees in your favor.
You listen to the client's concerns about your fee and you compromise on the amount.
Compromise is always a good runner-up strategy when you have reached an impasse with a client about your fees. However, the preferred strategy is to explore areas where you can add value to the client without lowering your fee. In negotiation terms this is referred to the problem-solving strategy and it often leads to better than expected results for both sides of the negotiation.
You try to explore areas where you can add value to the client without compromising on your fee.
You hold off on sharing your fee for as long as you can and then unilaterally lower your fee in order to retain the client.
This often happens as a result of your lack of confidence in the value of your services coupled with your desire to acquire new clients. However, if you arm yourself with preparation on the market rates for your services and how you differentiate yourself from the competition, you will gain the confidence to set a fee that encompasses the value you can offer and to negotiate your fee with confidence if the situation calls for it.
Question 2 Explanation:
One of the most difficult things to do for any service professional is sticking to the fee you have established for a specific service. Especially if you want to grow your client base, the temptation to compromise on your fee is very high. Always remember the adage: you get, what you pay for. Look for ways to add value to the client for your service, alternate methods of payments, or establishing performance-based thresholds for the payment of your fee in installments instead of compromising on your fee. Clients will respect you and will value your service that much more!
What are your priorities when negotiating a contract for your services with a new client?
Although cash now is always very important, it is just as critical to assess whether the work or the client will be beneficial to your business in the long-term.
Growth should always be a priority but not at the exclusion of your long-term business goals.
Relationship with the client is a tricky one! You want to retain the client and cultivate the relationship but you must not do so at the expense of your bank account!
Long-term goals for your business
It is important to keep your long-term business goals in mind when negotiating a contract for your services. However, short-term cash-flow needs should also be considered when negotiating for your services.
All of the Above
Question 3 Explanation:
When negotiating a contract for services, having the four priorities in mind and clarifying for yourself why each is important to you, will help give you confidence, reflects your professionalism, and ultimately the value you can provide to a new client.
How do you typically close the deal with your new client?
Repeat all the terms agreed to and follow-up with a written agreement via email for the client to sign.
Although this is a runner up practice, often you or the client may think of other terms or conditions you would like to include in the contract. Having a written contract that you can customize at the client meeting is the optimal practice to prevent the client from changing her mind or leaving any loose ends that you may not of thought of during your discussion with the client.
Repeat all the terms agreed to and go through each provision of your service contract with the client, revising or clarifying a term when necessary.
Let your client know that you will be calling to follow-up.
This practice leaves too much opportunity for the client to change her mind about hiring you. Moreover, it allows for the client to contact other service providers and compare your offer with theirs!
Leave information about your services and your business card with the client and ask him/her to call you.
This practice leaves the door too open for the client to walk out. Putting the onus on the client to follow-up with you may be appropriate when you know the client is in need of your service but needs to find the money to hire you or consult with the person in charge of disbursements in the company to obtain approval for your fee.
Question 4 Explanation:
Optimally, every service professional should have their own service contract which they can customize for each client. The ability to have the client agree to terms discussed right then and there is the ideal time to close the deal. When clients have a need for professional services, they want to know the terms and if you have been successful with the prior three questions in this quiz, closing the deal should be a natural outcome of your contract negotiation and retaining your new client!
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