Desperation Selling

With economy turning down and companies prudently freezing or cutting budgets the season of desperation selling will be under way.  Invariabley large companies with access to capital will see this as a time to lower prevailing rates on consulting.  Small thinly capitalized consultancies trying to survive will be more than happy to low ball bids.  Having worked in many start ups and also in large enterprises I have been on both sides of the table.  What this experience has taught me is that once you drop your rates, when the economy turns customers who gave you business will strongly resist higher rates and in some cases act betrayed when you attempt to charge the prevailing rate.  I learned that you have to say no to the grinding on price.  When the negotiation gets down to just price it turns into a street fight.  As a consultant they are buying your knowledge, do you really want to dilute the worth of what you know just to get the business?  I learned to say no and pass on the business beyond a reasonable discount.  Either the value is there or it isn’t.  Regardless of the price you accept work for , the expectation for performance remains the same.  They can be happy with your work at x or 2x but you may be miserable at x.


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