FB’s Negotiation – Part 3

How to raise the rates

I started at $110/hour.

I was supposed to finish at the end of this month. But then they came to me, asking me to come back for 3 weeks.

I wasn’t too keen on the idea, to be frank. It was a long commute, a stressful-ish client that kind of freaks out on everything and I wasn’t sure if I wanted to bother with 3 weeks.

I did a couple of calculations and came to the conclusion:

I would go back for $130/hour.

I also realized that I didn’t need the damn money. And that was freeing.

I almost DID NOT want to get back to the client at all. And not needing the money versus the hassle… it really helped with the negotiations, let me tell ya.

The broker said that they wanted to extend me for 3 weeks. He told me that if I accepted, they’d just send a little amendment to the previous contract.

I said:

I don’t think so. The contract ends at the end of this month. To me, it’s a totally new contract, and it’s a higher rate at $130/hour.

They didn’t say anything for about a week, so I figured I wouldn’t be coming back.

Then the client came back to me and said that they wanted me to stay until the end of the year.

Let me tell ya.

I was groaning inside by this time, because I didn’t (and still don’t) really want to work the whole year because it’s getting to be really tiring, and I wanted a break. I wanted to go back to Toronto, spend a week with my family, see my friends, come back, and CHILL OUT ON THE FUTON!

Plus, it was getting cold. Minor point, but winter was coming, no car driving at all in sight until mid-November until I can go for my license again and I was dreading having to take the subway.

But, I told myself:

FB, if you can get $130/hour, it would be worth it to you to come back for a bit longer, because let’s face it, the money would not only come in handy, it would securely pay off your debt, have enough savings for 2 years to live on $1500/month AND pay for your trip to Asia in 2009 because we all know you’re going to take 2 months off and spend about $10,000 on it.

So I told the broker that I wasn’t interested in any extension or new contract AT ALL with this client unless the rate went up to $130.

They totally balked. Freaked out!

They tried calling me 3 times, and I was just too busy to pick up. I finally called them back, repeated that my rate stayed at $130 and I wasn’t interested otherwise.

They pulled in the ‘big guns’. They called another broker to come in and try to haggle me down.

He used all of the following (he pulled out the stops for this one):

The market is SO SMALL, FB, please think about what you’re doing. EVERYONE knows EVERYONE.

FB: I know. I met some of them. And quite frankly, they know I’m worth the $130. Maybe they’ll recommend me to other clients in the future. I’m not worried. I know what I’m worth.

You’re really leaving the client in a dilemma, FB. You have specialized knowledge and you are loved at the client!

FB: It’s not personal, it’s business. So it’s not a question of loyalty for me. I like the client, I like working with them, but honestly, the project is very tiring and it’s draining me. So I won’t come back for less than $130.

In regards to my specialized knowledge, I know. THAT is why I’m asking for $20/hour more because I am rare. I have what they need, so they have to pay for specialized knowledge.

I mean really, who goes into a specialty shop and expects to pay Wal-mart prices for hand made goods? Seriously!

If what I’m hearing is right, then I am the only consultant they want. Which means, they will have to pay the price I ask, since I have the knowledge that someone else with my same skills does not. *shrug*

I know they weren’t organized, but it’s like you’re being unreasonable!

FB: I don’t think so. It’s just best business practices to protect yourself.

Because they did. They let ME take the risk. I could’ve rolled off this project at the end of the month and NOT have gotten another project at all. That means that I would’ve been banking on an extension that would’ve never materialized.

I took the risk, so I want the reward now.

If I were the client, I’d do the same thing. I’d take a consultant back for a week or two, and for another week or two instead of the whole 2 months, just to save money and not have to do a contract for the 2 months, but for one week at a time.

But in that case, they have to pay more for me, for being disorganized.

Look, when I go buy a train ticket, I don’t ever expect to pay the same price if I were to book it a month in advance.

If I normally pay $100 for a ticket if I buy it in advance, I would expect to pay $180 if I wanted to buy a ticket for the same day just because I wasn’t organized.

It goes the same for consultants. If they wanted to book me for additional time, realizing that they made the mistake and didn’t plan my roll-off properly, then they have to pay more money.

But they are really mad about the $20 increase!

FB: If I were a client, I wouldn’t be happy about ANY increase. So that’s kind of moot. I don’t go into a store where I normally pay $1 for coffee, and then am super happy that they’re now charging me $3. I’d be mad too!

But if I really wanted that coffee, I’d pay.

It’s a BIG increase and a LOT of money

FB: You’re joking right? Because $10/hour for 40 hours a week for 4 weeks is about $3000. I’m asking for an extra $6000.

That’s nothing. It’s a drop in the bucket compared to the $17,000 I was earning before.

It’s not that big of an increase, I am worth it, and they can afford it.

My final words were:

Look. If they say No, I stay at home. I am cool with being at home and relaxing. I don’t need the money. If they say Yes, it better be for $130, because I’m not getting out of bed for less than that.

I am totally willing to NOT accept a contract for 2 more months if they aren’t willing to pay $6000 more for my specialized knowledge.

And besides, I had given you a discount before! My original rate was $130. I’m just asking for what I’m worth now.

If you ask me one more time to lower my rate back down to the original rate, or even by $10 to $120, then the rate changes to $150/hour and you’ll have to go back to the client to explain that new increase.

In the end, I got the contract. I was half happy and half sad because I’m getting really tired with all the commuting and long hours.

But hey, you can’t say no to such a good rate.

The couple of things I want everyone to remember is as follows:

1. Make sure you don’t need the money.

Don’t bet the farm on something you aren’t sure about. If you NEED the money, then try to negotiate half way, where (in my case), I would take $120/hour to go back to the client instead of $130.

But you’d be a fool to turn down that contract if you needed the money badly.

I did the calculations, I was fine for a year without working with what I was earning up until the end of the month. No sweat.

2. Stay firm but calm.

If you start negotiating and always going down $10, then every time they talk to you, they KNOW that you will always be decreasing by $10 if they pressure you hard enough.

3. Know your worth.

If you did a bad job at the client and you know they wouldn’t pay more for you to come back, then don’t chance it.

But if they asked for you to come back, chances are, they liked you.

But be wise about your situation and what you can realistically expect.

4. Know when to walk away

I thought about it. I researched it. And I knew I wanted $130. But you have to put some thought into it, or you will regret your decision.

If let’s say I wanted $120 initially, but after signing the contract, then I felt like I could’ve gotten $130, it’s too late to be chewing over bygones.

MAKE SURE the price is what you want, and if it isn’t, figure out when you want to walk away.

For me, there was no negotiation. I wanted my rate to be $130.

No lower. No negotiations.

That made it a lot easier, but at one point or another, you may feel regrets about lowering it to $120 or accepting $110, and then kicking yourself in the ass for compromising.

For me, I didn’t really want to come back unless it was for $130, so I was almost hoping they’d say No.

Alas.

And that concludes my final negotiation summary.

Last and final post: Basic Negotiation Tips for Women