Navigating Negotiations: Tips for Independent Consultants

Negotiations can be one of the most difficult parts of building out a successful fractional consulting business; you have to weigh the value of your expertise against the expectations of a competitive market while also proposing how you’ll achieve favorable outcomes for clients in the long term. 

The process often starts before a client fully buys in. That can mean a deal falls through if you don’t approach negotiations in a way that lets you learn exactly what the client needs and prove your value through the conversation. (More on this in the next section.) 

We’ll walk you through the strategies you need to help ensure better deals, strengthen client relationships, and continue down the career path you’re building for yourself as a fractional consultant whether you’re pitching new clients and securing contracts or renegotiating existing terms. That way you can move on to doing the most important work needed to sustain and scale your business. 

Preparing for negotiations

As we touched on in the introduction, negotiations can often begin before a client fully buys in and there’s still a potential for the deal to fall through. Deals typically fall apart for one of three reasons and knowing them helps you prepare for the process: 

1. The client's problem isn't that painful

2. A client doesn't believe the fractional consultant is the right fit to solve it

3. The client does not have the budget 

It’s crucial in the scoping stage to find out how painful the client’s problem is and to prove that you are the right person to solve it. That starts by putting in the research work. 

Research and goal-setting 

There’s no shortcut to putting in the work behind a solid negotiation. It’s essential to research what other fractional consultants are charging in your industry and decide on your own professional financial goals as a starting point. 

For each client you’re working with, you should also research their specific industry, including any challenges or needs you can flag outside of any they bring up in an initial discovery call. Having this information on hand helps prove your worth beyond a doubt. Compare their objectives and any industry or niche-specific developments with similar situations you’ve dealt with in the course of your career. Use that experience to anticipate work associated with a particular client project and price accordingly. 

This is also where it’s key to understand and articulate your unique value proposition: what past experience- and particular success- do you have to highlight for a prospect during negotiations? Make it clear that you know how to solve their problem because you’ve already worked through a similar one. Throughout the process, this strategy legitimizes you in the eyes of your prospective client. 

You can also use that experience to scope the project so that you and the client agree on clear objectives, deliverables, timelines, and metrics that constitute success. Project proposals should identify pain points and show how you can solve them– then outline compensation based on deliverables and timeline. 

Spend some time anticipating objections too. What concerns will prospects reasonably have? How can you assuage them? Don’t aim to be perfect, but be honest about the value of your work. Most importantly, never negotiate against yourself. 

Be empathetic but also matter-of-fact. 

What this looks like in practice 

It’s extremely helpful to have scripts to work with, especially when you’re negotiating with clients on newer and bigger deals. Practice walking through the most common objections you might get in the course of negotiating: 

Client: “How did you get to that number?”

You: “From working with companies in the past, this represents the value I bring and the outcome I’ve provided. What are your thoughts on what would be fair?”

Client: “We worked with someone much cheaper in the past”

You: “I understand, and I do not want to strap the business for cash. That being said, I need to be aware of the value I bring and this is the rate I charge. What do you propose?”

Client: “That’s simply more than we can afford.”

You: “I hear you, and want to find something that’s fair for your business and for me. What do you propose?”

This approach is key to not negotiating against yourself by naming a lower rate. Let them make the next offer instead. If they name a lower number, frame that in relation to the number you initially named as a “discount”. You might say “That’s 30% less than my rate, and I am unable to give that big of a discount.” 

Always negotiate in terms of the initial amount you propose and the amount of value you bring, backed up by the experience and outcomes you can cite. You can start from these scripts and tweak them to fit the most common objections you face in your particular fractional consulting niche. 

Effective communication techniques during negotiations

How you communicate during a negotiation can help you reach the goals you’ve set for yourself with client relationships and compensation. While you should always tailor your approach to incorporate what you’ve learned from specific client research and the dynamics of any particular conversation, there are some general principles you can always work from. Those include: 

1. Active listening: doing your research means you should go into every conversation prepared while also being ready to listen and learn from everything your clients say. What are their concerns? They might highlight something your research didn’t uncover, or go into more depth than what you were able to find. The most important thing is that your prospects feel heard. 
2. Asking clarifying questions: Never assume you know what a prospect means. Ask careful, curious questions to uncover underlying motivations, unspoken expectations, and additional needs. Always get elaboration on key points to ensure mutual understanding. Encourage them to ask clarifying questions of you, too. 
3. Flexibility while maintaining boundaries: Be flexible on deliverables and/or timelines while also maintaining the boundaries you’ve put in place to keep your business successful. 

If a prospect has their budget cut in the middle of negotiations, for example, don’t just end the discussion immediately. Instead, see if you can adjust the scope of a project to include fewer deliverables or a longer timeline. Always keep the focus on the initial number you quoted and any new numbers as a discounted fraction of that original number. 

For example, if you originally quoted $10k and their budget only leaves them with $7.5k, re-scope the project and emphasize that they’re getting the same value with a smaller scope from your expertise at a 25% discount. 

Lead negotiations with thoughtful empathy and prospects will be more likely to convert– and to remain clients over a longer timeline. 

Handling objections and pushback professionally

Negotiations aren’t inherently about conflict but they can feel that way. Both sides are trying to get the most value out of the arrangement– and hearing “no” is actually a good thing here. Why? If you don’t hear “no” you’ve left money on the table! This mindset shift allows you to negotiate without compromising on your value as a fractional consultant. 

It’s not about “winning” but about finding a common ground that works for both parties where the prospective client’s problem is solved and you are fairly compensated for your experience and expertise. 

In your search for that common ground, lead with empathy and understanding. That perspective will help you anticipate specific objections and pushback from clients and prospects. When and if you are faced with them, use the same communication techniques (active listening and asking curious questions) to remain professional and maintain the relationship. 

Active listening is important to understand why a prospect objects to your fractional consulting services. Do you need to refine the scope of the proposed project? Do they understand your unique value proposition or do you need to articulate it better? 

Always be as clear and concise as possible, but don’t be afraid to walk away if a prospect doesn’t feel like a good fit as a client– or if it becomes clear that you are not the right fit to solve their particular problem. (This is when it’s great to have partners you can refer out to.)  

Strategies for achieving win-win outcomes

Achieving a “win-win” is about finding that common ground where you’ve clearly identified the client’s pain points and scoped out exactly how you can help them. That’s where problems are solved and you’re fairly compensated for your value. Remember that it’s not about “winning” the most you can from the conversation. 

This approach sets everyone up for a successful client-fractional consultant relationship in the short and long terms. 

Post-negotiation: sealing the deal and setting the stage for success

After a successful negotiation, the job is not yet done. It’s important to follow up by outlining the entire project, including deliverables and timeline. That ensures everyone has the same expectations for how the project will progress and how success will be measured. 

Encourage clarifying questions on both ends throughout the process to keep any surprises- or the dreaded scope creep- to a minimum. 

Final thoughts 

The key to success in negotiating is not to think of negotiations as conflict but as an opportunity. You’re simply getting to know the person on the other side and coming to a joint solution that works for both of you– while learning to relax and have some fun with it along the way. 

Add negotiation strategy and preparation to your weekly hour of business development and see how things change for your fractional consulting business! 

Mylance

This value-added article was written by Mylance. Mylance specializes in identifying the highest quality, most curated leads for your fractional business. We use 5 different criteria to identify companies and decision-makers who are likely to need your expertise:

1. Matches your niche / unique expertise.
2. Likely to have the budget.
3. Gaps on their team in your function.
4. Are fractional-friendly.
5. Have warm connections from your network.

To apply for access, submit an application and we'll evaluate your fit for the service. If you’re not ready for lead generation, we also have a free, vetted community for top fractional talent that includes workshops, a rates database, networking, and a lot of free resources to support your fractional business.