There is no “magic bullet” when it comes to fee negotiations. It is true that when the market softens the power shifts more to the buyer. But recession or not, you need to do everything you can to push back against margin degradation. And the way to tackle that head on, is talk about your value… not about your price.

The secret is to sell your differentiator. What have you got, and what do you do that gives your client special value. When I was running Firebrand we emphasised our niche focus, our unmatched access to creative, marketing and advertising talent, our multiple branches, our specialist knowledge and understanding of clients needs, our proprietary testing software, and then we should wrap all this up in 110% money-back guarantee. Explaining differentiators gets the focus off price, and gives you something meaningful to respond with when the client quotes competitors crazy fee levels

But you need to do more. When a client forces the issue on fee, go through your entire recruitment process explaining all the things you do to secure the right person. And I mean everything. The searching, the adverting, the screening, the collaborating with colleagues, the interviewing, the reference checking, the testing, the “selling” of the clients company to the best talent, and on and on. The biggest reason clients want to push down fees, is that they don’t perceive the value in what we do. And they don’t perceive the value because they don’t actually know what we do to earn our fee. And they don’t know what we do, because we, stupidly, don’t tell them!

It’s like looking at an iceberg. 10% of an iceberg is visible above the waterline. The rest, 90%, is out of sight. So it is with what the clients see of our work. 90% is out of sight, so the client does not factor it into his perception of “value”. So tell the client everything you are going to do to solve his staffing problem, chapter and verse! Then, ask the client why he feels a reduced fee is appropriate. This is important. Get the ball firmly into the clients’ court. The client is asking for a discount. He should be squirming — not you. When it comes to fee discounts you don’t have to justify “why not” — he has to justify “why”! Often the client will stumble a bit at this, but usually they say something like “your competitors charge less”

This often scares recruiters. But there is no need for fear. Ask, “ Can you tell me about a situation 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 — on a regular basis”

This is a gamble, sure, but the fact that you are there means that it is most unlikely the client is happy with their current supplier.

Sometimes the client pushes hard for a reduced fee. It’s going to happen in this market all the time. Don’t feel pressurised. It’s a purely commercial decision — and it’s your decision to make. Is this client and this order so attractive it is worth taking a lower fee for?

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. A discounted fee, means a discounted “you” — never forget that.

But sometimes you will feel it is worth a compromise to secure a particular opportunity. In these cases remember 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 25%”. The client asks for a discount. You say “OK, 20%. You have just signaled to the client that you never believed in your value proposition and your service in the first place. You will struggle with getting 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 – a retainer perhaps, exclusivity maybe, client paid advertising maybe, client gives you multiple orders maybe, or maybe you waive the guarantee.

Make sure the negotiation involves both sides giving. This way the equal partnership is in tact. So is your self-esteem by the way. Important considerations in a tough market.

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