FIVE PAYMENT NEGOTIATION TIPS

Every hustler has a payday, but how are pays negotiated? Ever wondered why a colleague with similar qualifications earns more than you or why some professions pay higher than others? Whether you’re a businessperson, a worker, a freelancer, knowing how to negotiate your compensation for services rendered is a skill that sets you apart from the competition and that influences your career engagement and fulfillment. Below are five tips you should consider before you conclude discussions regarding that project or work on which you are about to embark. Leveraging on these tips will ameliorate your pay negotiation and make you earn more money, however, you should understand the intricacy of each tip and apply it to your context judiciously.

1.       The value of your services

Value is the attribute of an object or person that renders it desirable and upstanding. How valuable is your service to the person requesting it? If your service will make them earn 100,000frs, pricing it at 2000frs will be illogical. If it will make them earn a promotion, win an election, you should definitely charge them more. The higher the upheld value, the higher your rate. A very simple formula. Think of the following examples:

1. The price of language certifications like IELTS-UK, TCF-Canada are above 100,000frs, but registering for the GCE English and French papers barely cost 15.000frs. It is obvious that the latter certifications have been considered to possess more value than the former ones, hence their high rate.
2. The price of language certifications like IELTS-UK, TCF-Canada are above 100,000frs, but registering for the GCE English and French papers barely cost 15.000frs. It is obvious that the latter certifications have been considered to possess more value than the former ones, hence their high rate.
   

2.     The beneficiary of your services

The financial status of the beneficiary of your services should determine the amount you price for your services. It is called Proportionate Billing. You should not charge 15,000 XAF for a service in Cameroon and charge 25.896 USD (BEAC, Exchange Rates Updated: Jul 5,2023 08:12 UTC) for the same service in the United States of America simply because 25.896 USD is 15,000 XAF. When dealing in “strong currencies” charge higher, rather than convert your local currency fee. Equally, in the instance that you are discussing business with two potential clients, pricing the richer client higher is only logical because they can obviously afford it and wouldn’t mind the extra charge if they are satisfied with the service you offer. That’s why two people may buy the same item in the same shop from the same salesperson at different prices.

3. The presence of competitors

The natural environment is crucial to any form of business, and it is even more crucial for professionals. More competitors implies competitive prices. Operating in a physical or a virtual area or working in a domain with many professionals and amateurs may oblige you to set low rates in other to win contacts and contracts. When negotiating your rate, consider the level (quality and quantity) of your competition. If it’s low, set high rates. If your competition is high, ameliorate your services and set high rates.

4. Percentage rate

How much money will your service generate? How much do you receive from the generated profits? Let’s say you’re hired as a barber by an owner of a barbershop and are paid 50,000frs monthly. During the months of July and August (holidays period) you work 648000 frs (12000frs per day x 54 days); and during the months of September and December (periods of high influx for barbers), you work 1.296.000 frs. For these fours months alone, you will be paid 200,000frs, but would have worked 1.944.000 frs for your boss. Whereas, had you negotiated a percentage of the amount worked, the higher you worked, the higher your salary would have been. However, you should understand that negotiating a percentage rate implies some level of responsibility on your part.

5. Time, resource and effort required

How much time do you need to accomplish a task, render a service or deliver a good? Time is money: how much do you get for the time you put in? The more time you will spend on projects, the more resources and effort you will require for them should determine how you price your services. For instance, the price of a CV at Careefy is 5.000frs. We require at least 48 hours for the design, candidate profiling, the company research, the writing process and the review process. But we price 3.000frs for cover letters, considering that they require less time to conceive.

6. Returning clients

Pricing new customers is different from returning customers. You may set low rates as a bait to lure new customers. If that is the case, you may want to consider a slight increase in the price once of your services once they become returning customers. With workers, once your boss renews your contract, it means they are satisfied with your service or they cannot find someone to replace you yet. However, generally, contract renewal is a sign of trust and commendation, which you can use to request for a raise in salary or wage.

Conclusion

Yes, the above tips may appear tricky and unjust, but I hope the examples backing them will make you understand that your payment determines your worth as a person and the worth of the work you do. It is commonplace that higher and expensive services are good and quality services. Think of all the high-paying sectors out there: law, accounting, medicine, aviation, etc. Do you not put in as much work as their professionals? Know that setting low rates, wages or salaries may be what’s keeping people from accepting the value of your services, however, pay attention to the person with whom you are dealing. Overcharging the wrong client or boss may send them to the competition, and you do not want that.