This is a true story. I feel compelled to make that representation, because it reflects a level of tone deafness that would otherwise be difficult believe.
I reached out to a vendor to assist me with a technical task relating to my new book. He sent me an e-mail in response, in which he:
Told me he was very busy;
Quoted a price; and
Asked me to contact him if I was still interested.
I never responded.
While this is an extreme example, I’ve seen similar conduct by advisors. I find it curious.
When you discuss risk with your clients, you carefully explain the relationship between risk and reward. Yet, sometimes when making decisions about new business, you look for “riskless” solutions, while still expecting a meaningful reward.
Why the disconnect?
That’s the attitude my prospective vendor had. He had no interest in the details of the project; whether he could add value; or whether his price was reasonable given the parameters of the assignment.
He wanted a commitment that I would pay his stated fee (without discussion), and would wait until he had the time to fit my job in his schedule.
Is this a viable strategy when you are trying to convert a prospect into a client?
Increase the size of the pie
Have you considered giving up something?
There’s interesting research demonstrating those who “increase the size of the pie” by conferring a benefit on the other party are more successful in negotiations.
What if you said this to a reluctant prospect? Work with us for no fee for a year. We’re confident you’ll want to continue. If not, no hard feelings. Or: If you decide to work with us, we’ll exclude your retirement plans and your 529 plans from our fee calculation. We’ll also spend up to x hours with your children (15 years or older) and educate them on the basics of investing. No charge.
I’m sure you can come up with even more creative concessions.
What I’m suggesting is a change in your mindset from a take-it or leave-it discussion to one where both sides feel enriched by the process.
Resource of the week
This article, by psychologist and author Adam Grant, discusses the power of generosity in negotiations.