Canadian Contractor

Negotiating 1: Beware of “giveaway creep”

"I thought I had a sweet deal with the client. So sweet, that I started to give it all back."


September 2, 2016
By Robert Koci

In the soon-to-be-mailed September issue of CANADIAN CONTRACTOR, our writer Rob Blackstien has a terrific article on negotiation secrets of the best contractors in Canada.

I wish I had learned a bit more about negotiating during my 25 year career as a framer and renovator.

All negotiation hinges on value but there is no intrinsic value in anything, only perceived or situational value. Rain is rain… priceless to a thirsty man but a curse to one on a picnic.

Perception of value changes over time, often rapidly. When I was starting out as a carpenter, I negotiated a sweet deal on a simple vinyl tile installation. The customer was desperate to get it done before his tenant moved in. At the time of our negotiation, his urgency made it worth much more than it cost me to install. I was being paid $750 for little more than a half-day of my labour.

Unfortunately, he was home when I did the installation so it didn’t take him long to do the math and change his perception. What looked like a great deal in the morning now looked like a rip-off. He “reopened” our negotiated deal and ended up paying me half of what he originally agreed.

I once hammered out a deal that I realized in hindsight was really bad for me. I got caught in “Giveaway Creep.” I was so obsessed with having this client on board that I lost sight of what I had given up to get him. What I perceived as a good deal in the meeting looked terrible 10 minutes later in my car.

My perception of the deal changed, so I wrote him an email explaining my mistake and outlining my unilaterally altered deal, and quickly found out how intimately perceived values are intertwined. My change of “perception” precipitated a violent, drastic change of his perception towards me, and it was not in my favour. We survived the ordeal, but not without much embarrassment and even more costly concessions from me.

Building the perception of value is not everything, it’s the only thing. Shape it, protect it, backfill it with solid results. Never give anyone an opportunity to change their opinion of your extraordinary value. It’s delicate work, but it’s the only work that matters to a successful business.

 


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