According to a US News and World Report study, the probability of attracting a new customer to your business falls between 5% to 20%, while the likelihood of retaining an existing client is over three times that – 60% to 70%.
So, where should you focus?
The correct answer is striking the right balance between both. But, based on the statistics, solidifying and retaining a strong client base should remain your primary focus, while attracting and winning new business should be a highly focused and targeted effort.
Entering Q4, my business will have several clients “up for renewal,” as many of yours will. We’ve distilled three simple negotiation tips you can apply as early as tomorrow to help extend those contracts now and incorporate into your best practices throughout the lifespan of a contract to ensure the negotiation doesn’t come down to the wire. It’s all about owning the timeline, framing everything within your clients’ values and establishing clear standards.
Start by Controlling the Timeline
Negotiations become stressful when you lose control, especially if there is uncertainty regarding the client’s desire to renew. This stress can impact your overall performance and, if unchecked, jeopardize your chances for success. By focusing on the things within your immediate control, you can take “the driver’s seat” and establish strength and confidence early in the process.
And the negotiation timeline is a great place to start.
To control the timeline, you’ll want to proactively lead the renewal conversation. Do this with the other party so they feel involved and thus more committed. Don’t wait until the contract is in its final weeks (or even month) to open the dialogue. If you keep client retention top of mind throughout the year, you can bookmark major successes and times where you added value above and beyond to refer to later. Then, when the time comes, you can leverage these moments as part of your forecast for future work. Ideally, you’re thinking about the renewal several months in advance and when it comes time to make the ask, it feels easy and seamless for both parties.
Starting discussions early will provide some breathing room for you and your clients alike, and it allows you to propose a rough timeline of key dates that would work for you. Beyond showing them how much you value the work, it also adds a buffer that will allow you to assemble a new proposal, a portfolio of successes, or any other materials you need to put your best foot forward.
This proactive outreach on timing, framed in terms of client successes, positions you as a true partner, not just a service provider hoping to make more money. By demonstrating your commitment and foresight, you express your value of their partnership and sincere desire for its continued success.
Understand What Your Client Values
Think back to the original scope you proposed to your client. You were likely either responding to a request for services or assuming needs based on preliminary conversations. Now, fast-forward to today. What’s changed? What have you learned?
As the incumbent, you have the best insight on what your client values, how they operate, and what moves the needle for their business. Use this knowledge to frame the renewal discussion. If your client values your proactive leadership, use this framing to tell a story around how the work has evolved since you started — ending with a strong predictive forecast for your collective work ahead. If your client prefers to dictate terms, tee up the conversation with the landscape as you currently see it, and ask for them to illuminate what is changing so you can prepare a response. In either case, the clarity around their goals should drive your proposed renewal.
If you’ve set the timeline and own the first meeting, you control the framing. Ask probing questions (especially about the goals of executive leadership), and dive deeper when you hear passion for a certain topic. Don’t be afraid to push when they seem to be uncomfortable. If your work is contributing to their success or failure, it’s natural for them to feel excited and nervous discussing it. When it comes time to deliver your proposal aim for sharing it “close to renewal” as to provide ample time for their input and feedback, building on the collaborative nature of your relationship.
Propose Objective Standards
Once you understand what your client values, build your scope of work to continue your services. It’s key here to propose objective standards. Even with a strong personal relationship, your client will be judged on certain benchmarks — so be proactive about demonstrating your commitment to those key performance indicators (KPIs). If you’re unable to connect your service offering directly to impact data points, focus on being a driver in their larger more qualitative business objectives.
By establishing objective standards derived from your client values, you will be able to report on metrics more effectively and make any critical adjustments at key milestones throughout the project. It’s not always possible to hit every KPI, especially when certain market forces beyond our control interfere with our plans; by having objective standards, you can still report back to your client to address where you are or aren’t satisfied. More importantly, you can share a plan to get things back on track.
The bottom line here is just that – their bottom line. Your client wants and needs a partner who is as accountable (or more) to their success metrics.
Your Best Foot Forward
These tips are not exclusive to Q4 negotiations, but there is no better time than the present to implement them. As you analyze your renewal options and prioritize your resources, you can incorporate these simple practices into your regular approach moving forward.
So, start with what you can control: the timing of that first conversation. Demonstrate value and impact, listen closely, and function as a true partner. In other words, you’re in it together; their success is your success.
So, what are you waiting for? The timelines are ticking.
Andres Lares is managing partner at Shapiro Negotiations Institute, a global provider of sales, influence, and negotiation training and consulting.