My colleague, Dan Diener, was working with client who was re-negotiating an existing contract that was up for renewal. It ran into a snag because the contract was for a higher amount than the previous year in order to be in line with our client’s other contracts. This was crucial since our client provides personnel to others and significant benefits to his employees.
Our client, based in Austin, Texas, is a small business with a very large state client. Because of the nature of the industry and how these two organizations work together and share information, the decision was made to talk to the larger client about the situation. The result was a good rationale to stand firm on price by leveraging the larger client. Our client said no, he could not honor the same deal he had with the state client if he cut the price for this existing client. The contract was signed at the price our client proposed. Honor and ethics were well served as well.
This was an unusual situation. Frequently, a larger client wants a “discount” for the prestige of working with them. But, it can work in your favor when someone else wants the “discount”. Don’t feel you have to give in. Stand firm for your existing customers and leverage them when appropriate.
You can use this strategy also when dealing with Daily Deal coupon buyers who want more than they bought. You have negotiated a deal with an online coupon marketing company and you should stick to the deal. In a recent article Groupon Nightmares by Sarah Jacobson Purewal, writing for Entrepreneur, cites the case of Sound Roots, a music school in Oregon. When numerous people called to try to bend the rules and get more than the value of the LivingSocial coupon, owner Fara Heath, told her manager to say, “This is a very good deal, and take it for what it’s worth.”