There are different types of customers. Some truly do value high performance and can recognize value and are more than glad to exchange cash for services.
There are some customers that want everything above board and explicit on every deal. They exchange cash for services in more of a regimented and rote way.
Then there are those that operate purely on price. They are looking to find out what the deal is completely and talk the service provider down as far as they can go. They are not fun to do business with. They also erode trust in the relationship and do not realize that they compromise many things that can come back to bite them. They can sour the relationship. Selling hard on either side, as the buyer or the seller, can have negative consequences. You still have an aftertaste while working together.
Imagine if you feel slighted and you have to work with the person giving offense. Do you necessarily give your best? Do you go above and beyond or do the minimal?
What if you are squeezed for every dollar or always paid late? These all create strains and mistrust in the relationship. Now, it may be worth it for a buyer to act in this fashion. My guess is that most negotiations and behaviors simply lack any foresight and are purely myopic on one person’s side.
When you are being shopped after providing a lot of service in the form of research, past work or putting together helpful information, it can be both insulting and demotivating.
One of the best ways to deal with this kind of customer is to ensure you get a commitment before proceeding with any negotiations or work. This can be done in multiple ways. Real estate deals use letters of intent to get a commitment. Landlords like security deposits. Your business will likely have its own inherent ways of creating a level of expectation between buyer and seller.
Some things I like include commitment to smaller projects to show an exchange and see if the buyer is for real or creating a cost for the buyer that would recognize early value.
Ultimately, if something costs you much and costs your buyer in a deal nothing, then it is a bad deal. And bad deals make for bad relationships.
If you are being shopped, it is because you are comparable. You either have a product or service that others also have or you have created enough clarity and detail to make yourself comparable to someone else.
If what you do is of high value and incomparable, then it is difficult to shop you. Then again, your craft has to be world-class and unique to own this position in the mind of the buyer or in the relationship.
Ultimately, who you close the deal with is who you do business with. Don’t give away your value on a silver platter and get cheapened in the process by a miser. Learn to rise above the commodity status and understand where the value truly lies. Otherwise, an imbalanced business relationship can lead to a bad relationship with unmet expectations between you and your customer.
As usual, Don, you’ve got some good insights here. I’d also add that these issues are highly relevant in business-to-business transactions. Small businesses can often become inter-dependent on their vendors and independent contractors, and maintaining strong relationships with these strategic partners is critical to survive temporary surprises and challenges you may encounter. Shopping your vendors and independent contractors, squeezing them, and waffling on commitments is a sure fire way to damage these relationships. You can be sure that those vendors won’t do you any favors in the future. My blog has a post that touches on this issue, in addition to other considerations for negotiating independent contractor agreements that may be of interest to you and your readers: http://bit.ly/pACnB3
Thanks for the resource and comments, James. Yes, well said. Damaging the viability of your supply chain, per se, can create many headaches if you are trying to serve your own customers. Agreed.