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Compete On Value, Not Price

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Dec 11, 2013

Dear Barb:

Do you believe in discounting fees? Our competition is now charging 20% flat fees and we’re losing clients to the reduced fees. My owner is insisting we stand firm at 30%. I think it would be better to get a reduced fee than no fee at all. My owner does not work a desk and she doesn’t realize reducing our fees is the answer. Can you show me how to successfully approach her on this issue? My coworkers are in agreement with me.

Steven D.

Phoenix, AZ

Dear Steven:

It doesn’t matter if your coworkers agree with your idea to reduce your fees. Your owner has the responsibility to operate a profitable company or you won’t be in business. You are asking your owner to reduce your fees by 33 1/3% not 10%. Do you also have ideas on how your owner can reduce her overhead by 33 1/3%?

I don’t believe that reducing your fees is your only solution. You must present the value in utilizing you and your company vs. your competition. Most clients want a return on their investment vs. the cheapest price. If you present better talent, you will be able to confidently quote and obtain your fees. There will always be clients who only look for the lowest price, and those are clients you should not represent.

This is a candidate driven market and top talent is hard to find, which is why you must represent the best talent. If your presentations are education based, you will elevate your relationship with clients from vendor to trusted adviser. I don’t believe you should approach your owner with your original proposal. The only time I propose reducing your fee is for multiple hires.

Barbara J. Bruno, CPC, CTS

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