5 Effective Tips for Negotiating High-End Rates
We all want to work smarter, be more productive with our time, and work with clients who pay us money to do work we enjoy.
But how do you successfully negotiate for a higher rate without limiting your opportunities? How do you increase your rates on current clients without losing the contract? These are legitimate concerns that come with being self-employed.
If you want to build a successful career as an architect, it’s vital you understand these negotiation tactics.
The Benefits of High-End Rates
Generally when a client can afford to pay you a little more, they will also be open to seeing the value and quality you offer as an architect. You’ll have the opportunity to pour more of your creative ideas into your work, without always worrying about the clock or paycheck.
Negotiating for higher paying rates has the following benefits:
- More creative freedom. When you know your bills will be paid on time, with extra funds left at the end of the month, you can have a bit more creativity with your work.
- Pickier about projects. If you need some extra money right away, you don’t have time to be picky with who your next client is. But if you negotiate for higher rates, you’re able to weed out clients who aren’t ideal to work with.
- Take more risks. Is there a project you’ve been dying to work on? Or do you have a new tool you’ve been wanting to implement? A higher paying rate will allow you to take more risks, and try out new ideas.
- Less stress. In addition to the above benefits, naturally one of the best things about getting paid a higher rate is that fact that you’ll stress less. You won’t be worrying about the money in your bank account, and can focus on your work.
1. Use the Value-Based Pricing Method
As an architectural or construction manager, your work is simply a business transaction, and as such your clients are interested in how you can help increase their bottom line. Instead of focusing on the amount of money you need to make, focus on the value you bring to their return on investment.
This method of value-based pricing showcases the results you can obtain for your client, versus relying on the number in the back of your mind that you need to receive in order to make your income quota.
The value-based pricing model flips the script on you working for a paycheck, to seeing how much your experience and skills can offer the client. It changes how you think about each project, and highlights your particular strengths for clients. Because of this, they will usually pay a much higher price for your work then if you set your own rates.
2. Find Out Their Budget
Many construction firms and clients have budgets set aside for these types of projects, and you could be leaving money on the table by not asking what their budget is.
I have personally experience several occasions where my rate was several hundred dollars lower than my clients budget, and wouldn’t have known if I didn’t ask what their allotted payment was for the project.
Additionally, by asking what their budget is, you can avoid any lowering paying clients that might not be the best to work with, and therefore saving you from wasting time and resources. When chatting with future or current clients be sure to ask what their budget is before pursuing the project any further.
3. Focus on Their Wants
Does your client want the project completed quickly? Do you they have a very high quality standard of work they want you to abide by? Are they interested in your expertise and feedback?
Find out what your ideal client wants, make it priority in your proposal, and then create a plan to deliver upon that. Really listen to what they’re saying and ask the right questions as to why they want something done.
They may know what they want but aren’t able to properly express it. If you can pick their brain and articulate exactly what they’re looking for, they will view that as “you’re reading my mind” and gladly pay you a higher rate.
Don’t underestimate the importance of being on the same page with your client. They want to work with someone who understands them, and is on their side.
4. Clearly Define the Terms
If you want to get paid more, sometimes it’s as simple as clearly defining your rates, terms, and conditions. If you don’t set boundaries as to the scope of the project, when you want to get paid, how you expect to get paid, and list out any other details in a contract, then you’re leaving too much room for confusion.
Clients will thrive a lot better in this professional relationship if you set clearly defined boundaries, and communicate openly with questions or concerns. Likewise, make sure you understand their terms and expectations.
Make sure this is in writing, and you have a way of easily referring back to in the event your client doesn’t pay you on time, or tries to offer a lower rate than the previously agreed upon amount.
5. Charge By the Project
As much as possible, you want to stay away from charging by the hour. As your business grows and your client work increases, the next level of getting paid often shifts from an hourly rate into quoting rates by the project. Hourly payment is usually best when first starting out, but can greatly diminish your earning potential in the future.
By charging according to each project you open yourself up to much more opportunities and have the freedom to manage the work how you see fit. If you need to order supplies or pay an assistant, a project rate will allow you to budget your money and time much more effectively.
Don’t let your client determine how long or short of a time it should take you to complete something (which is what an hourly rate suggests). Focus on your work, and quote them a higher rate based on the entire scope of the project.
The money you earn as an architect or construction manager is defined by two factors:
- Your rate
- Billable hours worked
So the only way you can negotiate a high-end rate is if you work less hours (thus being more productive with your time) or charge a higher price. But in doing so you may scare off clients or limit the opportunities you get, right? Wrong!
By using these five tips, you’ll be able to showcase your skills, offer more value, and ensure clients are happy with your work. In return, they will continue working with you and referring more projects your way.