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Feeling ripped off is a terrible thing to experience, especially in the context of a business negotiation. This might happen if you think you’ve gotten low-balled in a negotiation, or when someone has bargained you down in an agreement and gotten you to also say yes to the deal. Add to this dynamic the sneaking fear that you’ve consistently undervalued your market worth, you might find yourself angry that you've let others take advantage of your time and talent. But before you get stuck in anger, consider ways to reframe your thinking about the situation. Your ability to reframe and be objective about the situation can speed up your pivot back to future success. Recently, a friend and former client gave me a call because she was working through this very situation of feeling ripped off.
Julie - not her real name - had been approached by a global advertising firm to facilitate an annual day-long convening of the company’s top executives and board members. The company was flying in their leaders from all over the world to meet in Chicago, where Julie lives. Julie was excited about helping facilitate this meeting, and put together a proposal including her day rate. For purposes of clarity, let's pretend that rate is $10,000. She didn't pull this price out of thin air. Julie spent 20 years in corporate management before she decided to freelance, and her last two bookings for facilitation had come in at this rate. Yet as she waited for a response from the prospective client, she had this nagging feeling that she hadn't quoted a high enough price. So she called me, and as we talked, I jotted down five points to help examine her feelings around being lowballed.
1. Double check how you're assessing market rates. In terms of Julie's market rate, she had two previous bookings at that price tag, so there was credibility in her pricing. But Julie kept coming back to what large-scale organizations or high-profile consultants might charge for this situation. She felt she had missed an opportunity to increase her rate. I challenged her on this point a little - was it really accurate to compare her service to some of the organizations she was mentioned? Let's be clear on something, too. I wasn't trying to knock her down or say her services were any less valuable. But I did point out that it was likely that if the company that approached her wanted to go to a large-scale organization, they probably would not have reached out to her. Also the company that reached out to Julie wasn't really the sort of client that those same large-scale organizations worked with. The key point here is to make sure you are appropriately comparing options is important, or, as the common saying goes, make sure you're comparing apples to apples.
2. Examine your walkaway plan. A walkaway plan is also often referred to as the Best Alternative To a Negotiated Agreement, or BATNA, as coined by Roger Fisher and William Ury. Having a strong walkaway plan - and by that I mean a strong alternative way to spend your time that has a higher payout that the one in play in your negotiation - can be very strong leverage. In Julie's case, her walkaway plan was not necessarily strong leverage. She wasn't booked to work for the specific day the potential client was proposing, nor did she have a project that would have paid the same fee for her attention on that day. An argument could be made that time not spent on the potential project could be reapportioned to another revenue-generating activity. But that opportunity cost is a little vague. Julie did not have an alternative proposal or potential client willing to pay $10,001 or more for her time on the given day that the other client was proposing. Given this perspective, Julie partially walk back a feeling of being low-balled.
3. Reframe the situation as an opportunity to pitch follow-on work. Reframing is key to helping maintain internal motivation, and the perception of being lowballed can damage your internal motivation to deliver excellent work. This was the case for Julie, and the perception that she didn't price high enough was causing her to feel self-defeated. I suggested that if the client came in at the rate she proposed, it could be an opportunity to execute the work and use it to gain more insight into the dynamics of that company. That added information could be used to pitch more follow-on work with the client or even members of their advisory board. I reminded her that she was losing time by falling down a negative though spiral. That same time could be channeled towards developing options or products that could be effortlessly pitched as follow-on work.
No one wants to leave money on the table. If emphasis is placed on relationship building, it can free us from fixating on only a short-term fee. In fact, lingering at that bargaining table can help in collecting more information and building up a social asset around trust. That trust could very well lead to future work, a longer-term lucrative contract, or a vital referral. This, too, is the difference between seeing a situation as a one sales transaction versus doing on-going business development.
4. Make sure to get a testimonial. For a moment, I asked Julie to pretend that she landed the work, and that the potential client came in at $10,000. I also suggested she pretend that she knocked the job out of the park and did a stellar job. Was she ready to ask the client for a testimonial? What was her procedure or her requests after a job was through? Did she ask former clients if she could use their logos on her website? The testimonial and approval to list former clients can have enormous and positive effect on continuing to grow the reputation of a business. But it's not just about having the confidence to ask. Prep the details. Have an email drafted up to send to them, right after the work is completed, and cue up a request for a recommendation on LinkedIn. I also asked Julie what her process was for updating her website and social media with the new client logos. It's a basic task but making sure that task is nailed down can be a way to redirect your energy towards positive action. I also suggested she prepare to ask for a testimonial and ask the client for referrals to other potential businesses in their network.
5. Re-examine your branding. Towards the end of our visit, I realized that Julie's anxiety on her pricing wasn't entirely about that job. There was a chronic irritation at work. As her professional profile was on the rise, she was frustrated by increasing requests for free advice and coaching. This was possibly a branding issue, and I asked her to tell me about her branding. She admitted that she hadn't spent a lot of time in honing it, and that she was knowing for doing extensive mentorship in startup circles. She snapped her fingers and nodded her head, making a commitment to start changing that perception. She knew she had to shift that idea that she was always giving away advice for free, and mentioned that she needed to have a more focused set of products to direct people towards.
Ultimately, Julie landed the work at a little lower than her initial bid. But she wasn't discouraged. She was prepared to talk about follow-on work, and even got the client to refer her to two other companies that needed her facilitation services. The biggest takeaway for her was sorting out the difference between the perception and reality around feeling lowballed or ripped off. By redirecting her attention towards action, she was able to harness her mental energy towards revenue generating activities.
