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10.5 Negotiation Best Practices for Consulting Firms

Winning a consulting project is like asking a teenager to complete chores. You hope for instant acceptance, but more often than not you need to wade through a few frustrating discussions first.

Since most consulting proposals encounter at least one round of discussions before you seal the deal, below, in their barest form, are 10 best practices that will help you close more projects at higher values with more clients.

(Note that this refresh of Negotiation Best Practices presents a number of ideas that weren’t included when the list was originally published in 2016. Also, to skinny the list to 10, I removed a few best-practices that are still relevant and worth following. I’m sure you’ll add them back in your comments and suggestions!)

10.5 Negotiation Best Practices for Consulting Firms

Conduct outstanding Discovery before you submit a proposal

Up-front work results in later discussions being about clarifications rather than objections.

Remember that your consulting firm can walk away from a bad deal

(i.e., know your “best alternative to a negotiated agreement.”)

Always negotiate with the decision maker on your consulting project

Negotiating with a consulting client’s subordinate is a sure path to frustration.

Utilize the Strategic Delay

Get all objections to your consulting proposal on the table before you respond to any of them.

Start with the easiest objections then move to the hardest

If you build “cooperation momentum,” you’ll be given more leeway on tougher objections.

Defend your prospect’s point of view first

Agreeing with your prospect disarms them and forces you to think creatively.

Hold your ground

Just because your prospect raises a concern doesn’t mean your consulting firm has to make a concession!

Protect the consulting project’s requirements for success

Never, ever agree to a condition that will make success unlikely or the consulting project unpleasant

Keep reductions in consulting fees commensurate with reductions in value

It’s all about tradeoffs–for your consulting firm and for your client.

Don’t sacrifice a consulting opportunity to uphold “negotiation best practices”

Remember, the goal is to win consulting projects, not to brag about best practices!

What else?

What other best practice(s) do you keep in mind when negotiating with a consulting prospect to win a project?

  1. Alain
    June 16, 2021 at 6:31 am Reply

    Very good! Thank you, David!

    • David A. Fields
      July 22, 2021 at 9:03 am Reply

      You’re very welcome, Alain. Thanks for the feedback!

  2. James Pepitone
    June 16, 2021 at 9:35 am Reply

    It is our view that the need to “negotiate” is a red flag warning of likely future problems that probably unmentioned during any negotiation. Can’t emphasize enough the need to have a good picture of the presenting situation and the client’s wants before any proposal is prepared.

    One further suggestion is to offer price level options within the proposal–similar to the same way we like to consider major feature options when buying a car–typically varying such parameters as data quality (e.g., accept available company data or confirm independently), internal support (e.g., organization staff assigned to project), thoroughness (e.g., specific data inputs considered; organization member participation to prepare for implementation speed), and deliverables (e.g., report length, presentations). Make your primary recommendation the midpoint price, then offer one or two options lower and higher. This helps the client choose between reasonable options — all providing a quality product to address the client’s objective — yet not boxing the client into “one best way.”

    • Dianne
      June 16, 2021 at 12:49 pm Reply

      I agree, Jim. Glad to see your post here and comments.

      Dianne Crampton, Becoming TIGERS – Leading Your Team to Success

    • David A. Fields
      July 22, 2021 at 9:13 am Reply

      We’re in total alignment, and I appreciate you highlighting the very first best practice on the list: conduct outstanding Discovery before you submit a proposal.

      Your suggestion to use alternatives in the proposal is, of course, also good and is one aspect of developing a best-practice proposal. (For more information on proposals, readers can download the Perfect Proposal Template and refer to this article and this article.)

      Thanks for the thoughtful comment, James!

  3. Dianne
    June 16, 2021 at 12:48 pm Reply

    I agree with James Pepitone on this his comments. Like Jim, we present options AFTER a thorough discussion to hone in details. We also provide an NDA because the questions we ask dig deep into operations. If a potential client doesn’t want to go there, we move on. And this is one reason why none of our change planning contracts has ever failed and executed as planned.

    • David A. Fields
      July 22, 2021 at 9:19 am Reply

      Congrats on the successful track record, Dianne. Impressive.

      Yes, it’s critically important to conduct excellent Discovery before you submit a proposal–that’s why it’s listed as the first best practice in the article!

      I appreciate you highlighting the importance of that step in the process.

  4. Russell
    June 16, 2021 at 3:58 pm Reply

    Thank you, David. I find that the principle of keeping reductions in fees commensurate with the reductions in value is one of the hardest for a client to abide, and frequently hard for consultants (who like to deliver great work – dare I say, overdeliver great work). Holding firm on what comes off the table and not letting it creep back is a learned skill. However, with experience and an appreciate for self-worth and the value one is adding I find it gets easier.

    • David A. Fields
      July 22, 2021 at 9:23 am Reply

      Very well said, Russell. The truth is, you don’t want to be caught in nickel-and-dime games, so when a client asks you for a small “extra” something, you naturally (and correctly) say yes. However, experienced and confident consultants learn where to draw the line on small extras and how to say, “I’d love to do what you’re asking. It’s a smart idea and we should do that. It will, of course, increase the fee.”

      Thank you for injecting the fee/scope challenge into the conversation, Russell.

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