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How Are Your Handling The: ‘Reduce Your Fee Question’?
Posted by Nicky Coffin
Over the last few months I have finally got round to completing my office. It’s taken a while I know; my excuse is that Centredexcellence has been growing at an accelerated pace as we develop a number of new programmes and I haven’t had the time, which is true.
I have a huge book case (no surprise there) and a very large desk, comfy chairs and the most amazing radiator’s; remember I live in Scotland!
None of these items were cheap, not excessively expensive either except the radiator maybe, though I will come onto that later. I willingly paid the exact price on the label; I didn’t complain about the ££££££ it was costing and neither did I ask for a discount.
Each week when I do my shopping at the local supermarket I pay up and don’t ask for 10% off because I pay in cash.
Discounting, value, pricing? All fascinating subjects in the recruitment sector; don’t you think?
I have worked with literally hundreds of recruitment directors and managers and the subject of pricing and raising fees is common.
On the surface it appears that organisations who use recruitment companies think its ok to grind down fees, they obviously do this everywhere; or do they? I doubt they ask Tesco’s for a reduction in their weekly shop.
The why question?
So when they ask for a reduction from either you or your consultants; do you ask why?
I have to admit I do have an ironic smile on my face as I write this, employers bartering over fees, there is something unreal about negotiating over human capital; isn’t their?
Something to remember that occasionally gets forgotten, is that clients will often ask for a discount or fee reduction though they rarely demand one.
Fact: If a client demands a fee reduction and you know your recruiting process value walk away. It will be the thin end of the wedge of your entire relationship with them. This leads me onto a pet subject of mine……….
Pricing v’s Value?
How much does your recruitment service cost versus the value your clients and candidates receive.
There is a famous quote by Warren Buffet that sums up the essence of this conversation.
“Price is what you pay. Value is what you get.”- Warren Buffet
The big question then is how you are, or more importantly your recruiting team, communicating the value your service brings?
I suspect if your fee’s are constantly challenged; you aren’t.
Value proposition and your service
One area we deep dive into on our programmes is your value offer and your recruiting process and HOW you communicate what this means for the client and your candidates (who get it for free!)
So often I will see sales material or website copy that communicates at best a luke warm reason why you are better bet than all the other gazillion recruitment companies out there.
Sorry to say that something along these lines isn’t going to command even a 15% fee let alone 20%.
“We provide an intelligent recruitment solution and a bespoke service.”
People will pay for value and need you to explain the value that your service brings; that relates to their specific needs and criteria.
Hint: That often includes; speed, organisation, expert sector knowledge, access to candidates, customer service.
Let me explain…………..back to my radiator story.
I purchased a couple of radiators for my office. In truth I gulped at the price. And then I asked a number of questions and the value jumped out at me. Though these radiators were double the price of any other, they were literally plug and play, to be precise drill, hang and plug in.
They also gave out phenomenal heat at a cost that was 33% less than a normal radiator. All my criteria boxes were ticked because the company in question understood their market and could clearly answer the ‘why’ question I had.
Next steps then.
Are you communicating your offer in a way that relates to your client’s needs? Is this present in everything you communicate; website, email campaigns, authority positioning.
Are your recruiters skills honed to; elicit needs, handle objections and communicate value, consistently?
If you can’t answer Yes->Yes-> Yes to these questions you might just have your answer about why you are asked to reduce your fees.
High performing consultants are the lifeblood of any successful recruitment organisation. The challenge starts when your recruiters underperform. There is a solution and I cover it in-depth in my latest ebook; How to Convert Your under Performers to Consistent Billers in 14 Days or less. You can download it here.