Situation: A company provides both contract staff and consulting services. They have a large client for whom they provide staff, but not consulting. The client routinely requests discounted rates on contract staff from the company. The CEO believes that the client requests lower rates because they, in turn, offers consulting to their customers, using the company’s staff, and want to offer these services at a competitive rate. How can the CEO better respond to the next requests for discounted rates? In addition, is there a way for the company to market their consulting services directly to the large client’s customers? How do you balance two businesses?
Advice from the CEOs:
- Don’t avoid the conversation on your rates. Make sure that your client knows that they are getting top quality services and that this is reflected in your rates.
- Make the issue a price / quality trade-off. If cutting costs is important to the client, offer lower quality options at a lower price and let the client decide what will fill their needs. This positions you as flexible and willing to work with the client, without losing margin.
- Offer modest discounts for incremental business, but not current business.
- Tell the client sooner, rather than later, that your prices are as low as you can make them. Don’t wait until you are in pain.
- How can you promote your own business to end customers via the staff that you provide for this client?
- Give them business cards to give out that reflect your business, not your client’s.
- Provide them with wear nicely embroidered “Company” shirts to wear at work.
- Be aware that your desire to approach the client’s customers directly with your services will be a threat to your client and may result in them firing you as a provider of contract staff.