Responding To “Take It Or Leave It” Contracts

When a client or prospect presents you with a one-sided, arbitrary, compromising agreement with a “take it or leave it” attitude, you have a choice between several alternative responses.

  1. You may choose to surrender and accept the terms of the agreement, which generally will limit your ability to effectively serve the client. You will choose this response if you are afraid of losing their business to the competition, or, because you are unwilling of incapable of saying “no,” or, because you are not confident that your service is qualitatively different from that of your competitors; and, therefore, believe you lack the proper leverage for negotiating more favorable terms. In some instances, you may also have the misguided belief that, through the delivery of good service under unfavorable conditions, you will be able to negotiate better terms down the road. This almost borders on being an oxymoron
  2. You may choose to “just say no” and walk away from the potential business without providing a reason for why you are doing so. Some will choose this option because they sincerely believe there is no justification in even attempting to reason with a prospect/client who is attempting to commoditize and marginalize our industry. In many instances, this may be the right choice. However, others may choose this option because it is easier to say “no” than it is to explain their position and attempt to negotiate a proper agreement.
  3. You may choose to negotiate terms and conditions that are more reasonable. This is a good option for those who are well schooled in the art of negotiating, have established a clear and unflinching fall back position (BATNA), and most of all, possess confidence in the quality of their processes. However, for many who lack these skills and perspective, the end results look more like surrender than a negotiated agreement.
  4. You may choose to present the terms of your own “take it or leave it” agreement. Yes, that’s right! As arbitrary as it may sound, one of the most effective options you have available is to counter the prospect/client’s “take it or leave it” agreement with one of your own. In order to do this, you must know in exact terms, the conditions under which you can work most efficiently and effectively.

Top producers understand the conditions under which they can deliver maximum value to their clients. Consequently, because they have the interest of their client as a focal point, they refuse to work within a process that by its very design hinders their ability to deliver results.

Remember:

“All I have going for me is my time and my ability to make things happen.”Angel ~ “The Rockford Files”

Interesting quote. It cuts right to the bottom line of our business. All we have going for us is our time and our ability to use that time in the most effective and efficient manner in order to achieve appropriate results for all those we serve.In order for this fourth option to be viable, you must be really GOOD at what you do. Not once in a while but consistently day in and day out. And, just as importantly, you must know WHY you are good and the “why” can vary greatly from practitioner to practitioner. However, regardless of individual differences in strategies and techniques, the “why” invariably rest on two cornerstones:

  1. A well developed, ever improving, closed loop process for dealing with your clients, candidates, and recruits. Because of the nature of the business, this process must be both adaptive and interactive. It must also be designed for maximum efficiency and effectiveness in order to minimize the likelihood of misstep or error.
  2. A clearly established set of reasonable criteria against which you evaluate all potential business opportunities. This, together with your skills and processes, serves as your base of power. Strict adherence to these criteria will help insure that you only work on properly qualified business thereby providing you with the best opportunity to perform and succeed.

Understanding that our business is as much an art as it is a science; there remains plenty of room for variation. Nevertheless, the two cornerstones referenced above are shared in common by almost every top producer in our industry. Keeping this in mind, there still remains room for customization and adaptation. The key lies in “how” the concept is presented to a prospect or client who otherwise may have a distorted view of the process and our industry. Therefore, provided below are examples that may stimulate thought on how you might present your version of a “take it or leave it” agreement.One very important caveat to remember: you must be dealing with the right individual at your prospect/client. This would be the individual who has the authority to approve agreements that may vary from the company norm. Trying to sell this concept to someone who can only say “no” – but not “yes”- is a waste of everyone’s time.Possible initial positioning statements include:

“I understand the terms and conditions of your agreement. However, what I don’t understand is just how this agreement works in your best interest considering the limitations it imposes on the recruiting and selection process?”

Or

“The terms and conditions of your agreement, while potentially effective in certain situations, may in fact be counter-productive if applied to other, higher priority projects. Perhaps, it would be worth our time to consider whether or not certain modifications to your agreement might produce a better result. What are your thoughts?”

Or

“Your agreement appears to contain several provisions that may in fact work against you if your objective is to attract the best possible talent to your organization. Which alternative approaches have you considered?”

Or

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“Based on your agreement, it appears as if we have a problem. The problem is that if we agree to work within the terms and conditions of this agreement, by necessity we would have to limit our commitment of resources. Since achieving results for our clients is our primary goal, working under the restrictions of this agreement would not be in your best interest. However, with some modifications, we may be able to reach an agreement that would better meet your needs. Are you open to specific suggestions?”

Or, for the particularly bold and confident

“For those companies who meet the qualifying criteria necessary to become clients, they sign our agreement. The terms and conditions of the agreement are always customized to meet the specific needs of each individual client. Furthermore, the agreement underscores our mutual commitment on how best to work together in achieving appropriate results. Whether or not your company would qualify as a client I do not know. However, it may be in both of our best interest to find out. Are you prepared to take our discussion to the next level?”

Please remember the above statements are merely examples of potential approaches that can be used to open a two-way discussion on the subject of your firm’s client agreement. Not all prospect/clients will be interested in even discussing the topic. Nevertheless, if you cannot reach an acceptable agreement, you can always say “no” and walk away. In that event you still come out a winner because you are not wasting your time trying to service poorly qualified business.Regardless of the approach, it is imperative that your presentation focus on the benefits the client will receive from working with you under the terms and conditions of your agreement. The primary areas that you must consider from the client’s perspective are:

  1. The performance related selection criteria (the third step in our client centered process).
  2. Working relationships, including timely access to the key decision makers.
  3. Process steps, including specific roles, accountabilities, timetables and deadlines.
  4. Exclusivity whether on a contingency, engagement fee, or retainer basis.
  5. Client resource sharing including companies, names of targeted individuals, and previous contacts.

Clients will only agree to sign your contract if they believe it is in their best interest to do so. Therefore, it is up to you to know your capabilities and processes and, when they are properly utilized, how they can achieve the desired outcomes for your client. Consequently, the terms and conditions of your agreement are not self-serving. Rather, they provide the road map to follow in delivering the maximum benefit to your client.As stated in our previous article, your prospect/client’s “Take it or leave it contracts are designed to control mediocrity not to foster excellence.” Thus, the only question you have to ask yourself is:

Do I want to be part of the “mediocrity” or part of the “excellence”?

Never feel trapped. Either you control the manner in which you work or you allow others to do so in your stead. The choice is truly yours.As always, I welcome your comments or questions.

Recipient of the Harold B. Nelson Award, Terry Petra is one of our industry's leading trainers and consultants. He has successfully conducted in-house programs for hundreds of search, placement, temporary staffing firms and industry groups across the U.S., Canada, Mexico, Australia, New Zealand, Russia, England, and South Africa. To learn more about his training products and services, including PETRA ON CALL, and BUSINESS VALUATION, visit www.tpetra.com. Terry can be reached at (651) 738-8561 or click to email him.

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