Management Consultants

Negotiation for consulting firms

As consultants a constant requirement for us is to negotiate. Whether its requirements with stakeholders or proposals with decision makers, negotiating skills are central to the daily life of a consultant. Here are a few tips to keep innegotiation mind when you have your negotiator cap on.

  • Aim for the Win-win situation: Kind of obvious, but that’s the only kind of win there is. You can probably forget it in the heat of the moment at times but forgetting this is the root of a lot of other issues. Consulting is a trust-based industry and a victory without thinking/talking about a win for the client is inconceivable.
  • Think long term: Take the broader view on things. Revenue for the next month/quarter shouldn’t be your only target. You can be gaining goodwill or access to markets/industries/companies, which can be more valuable than revenue in many cases. Especially in established domains like Management and IT consulting for medium to large enterprise, where demand is almost guaranteed, a long term view can pay dividends when measured against the entire life of the relationship.
  • Know them: Not everyone values the same things. The essence of a win win trade is providing value to someone so they provide you something of value in return. Few of us spend the time to evaluate what the clients really value though. Many times these are human traits and not company metrics. Vanity, Family, Anger, Superiority, Impatience and Achievement are many of the drivers that people seek to fulfill in their lives. Work is no exception and many times when it doesn’t fulfill these needs, the deals are incomplete. Know their values, motivations and needs. Play them.
  • Rational, Emotional and Behavioral: These are three dimensions of people. All of us have a rational side to us, an emotional side and habbits and behaviors that have their own momentum. Everyone has a different mix. Trying a rational overly argument on an emotional individual is trying to explain the economics of consulting firms to your wife. Know how much your target is rational, emotional and behavioral. Base your arguments accordingly.
  • Keep your SELF out of the equation: While it is an advantage to know your parties really well, it is equally bad is you don’t know your self. As with clients, many of us can’t help but be ourselves when negotiating. Most of the high achievers are not the best of people. Most negotiations end up being a battle between personalities trying to fulfill THEIR needs rather than a discussion between parties to fulfill company needs.
  • Maintain trust: Consulting firms trade customer trust in their competence for money. If as part of the negotiating process you present yourself as opportunistic, greedy or needy, the very heart of your trade is likely to get effected. You must maintain this at all costs.
  • Its not over when they sign off: Most contracts have room to change over time. If they arent agreeing to higher rates now, negotiate a 6 mo term to prove yourself and gain trust. Then re-negotiate. Nothing is forever.
  • Be prepared to leave: In most cases this is the essence of tough negotiation. If you aren’t ready to walk away, there is only so far you can go. Define clear limits when you walk in. Base them on hard facts and analysis. Don’t leaves it to emotional impulses during the negotiating process.


Muhammad Omer

Muhammad Omer is the founding partner at Allied Consultants. Areas of interest for him are entreprenuership in organizations, IT Management, Integration and Business Intelligence.