Today we’re going to show you how to avoid falling victim to the infamous ‘Good Cop, Bad Cop’ negotiation tactic.
Were also going to confirm the number one question all Architects and Interior Designers should ask at the start of any design fee negotiation.
Let’s get started with the basics, what is the Good Cop, Bad Cop negotiation tactic?
Good Cop, Bad Cop Negotiation Tactic:
Good Cop, Bad Cop is a negotiating tactic that many Clients adopt to help them save face while negotiating the best deal possible (for them).
I’m sure you’ve experienced the Good Cop, Bad Cop negotiation tactic at some point in your career. So let’s use an example to remind you exactly how it works:
How does the Good Cop, Bad Cop, negotiation tactic work?
Let’s imagine for a moment that you’ve just been invited to discuss your proposal for a new and exciting project.
You arrive at the meeting, exchange pleasantries and sit down to begin talks.
Without hesitation the Client turns to you and says:
“I don’t have much time so lets just get to it. Your fees are higher than the market will allow right now. If you can accept a 10% reduction the project is all yours, what do you think?”
You’r both surprised by the request and unsure how to respond: you’re not comfortable accepting a lower fee, however, you don’t want to lose the commission.
Having recently attended a Design Fee Negotiation Course you realize the best approach is to exchange concessions, rather than simply give them away.
So tentatively you agree to reduce your design fee in exchange for the Client’s agreement to pay the $2,000 of project expense costs (e.g. costs typically associated with printing, postage, packaging, travel, visual material, models, etc.).
Good Cop, Bad Cop:
Now, when adopting the ‘Good Cop, Bad Cop’ negotiation tactic, the Client will always respond to counter proposals in the same way.
They’ll respond in a very positive… but NON-COMMITTAL manner. They may say something like:
“That’s great news regarding the fee. The expense requirements shouldn’t be a problem. While I’m here, let’s go through the rest of your proposal to see if we can reach an agreement on those issues too.”
During fee negotiations people have a habit of only hearing what they want to hear; everyone likes to hear good news.
This explains why many of us, when faced with this emotionally charged situation, will optimistically interpret the Client’s response as an agreement to both issues, however, the Client may have a very different idea in mind.
(Note: To help you with your design fee negotiations we’ve created a Fee Proposal Mini-Series which is currently available to watch FREE of charge)
What happens next?
Well, later that week after having ‘spoken’ with his business partner the Client calls you with an update on the status of your proposal.
During the conversation, he confirms they’re pleased to be awarding your firm the project and you’ll be receiving two copies of the contract for signature.
Now, despite this good news, something doesn’t feel quite right. You can’t put your finger on it, but you feel uneasy about the situation.
Open up the dialogue:
Knowing that experienced negotiators always look for opportunities to open the dialogue you decide to use this call as an opportunity to clarify a few issues, by saying:
“Thank you very much for confirming this great news. While we’re on the phone, do you have a couple of minutes to discuss the contract?”
The Client agrees, so you go on to say,
“During our meeting, we agreed to reduce the design fee by 10%. Is that reduction included in the contract?”
The Client confirms the issue and asks if there is anything else, he can help you with. Awkwardly you say:
“Yes, there is one last question. During that same meeting, we also agreed to expense costs in the amount of $20,000. Is that also included in the contract?”
‘Ah,’ says the Client, ‘I’m glad you mentioned that. Now, you won’t believe this, but when discussing the issue with my ‘business partner’ he said that, given the current financial climate, there’s no way any Client would pay $2,000 to cover expense costs’.
‘But don’t worry, I’ve had many conversations with him over the last week and he’s come around. He’s agreed to pay $500 to cover your expense-related issues, so I’ve updated the contract with the new number’.
What just happened?
Well, unfortunately, you’ve just fallen victim to the ‘Good Cop, Bad Cop’ negotiation tactic. By using his business partner as the ‘Bad Cop’ your Client was able to save face while negotiating the best deal possible.
How can Architects & Interior Designers avoid (or manage) the Good Cop, Bad Cop negotiation tactic more effectively?
To avoid falling victim to this tactic, there is one simple question you should ask at the start of every negotiation meeting. That question is:
“Does your negotiation partner have the authority to negotiate a final deal?”
Now you don’t always need to verbalize this question: sometimes you will be given visual cues to help you answer it.
Example 1 – Residential Design Projects:
For example, let’s say you work mostly on residential design projects and many of your Clients consist of a husband and wife team.
If you show up to an important (decision-making) meeting and at the last minute either the husband (or wife) fails to attend, then this is your ‘visual cue’ to prepare yourself for ‘tiered negotiation’.
Example 2 – Commercial Design Projects:
Alternatively, when working with commercial Clients, the decision-makers (Bad Cops) may not be so easy to spot.
So you may need to ask about the company structure and the role of the shareholders, directors, and/or business partners before you enter into negotiations.
If you’re unable to talk with the decision-maker (Bad Cop), don’t panic. This is not a deal-breaker.
However, recognize the situation and avoid giving everything away during the first meeting. Instead, hold something back in preparation for future negotiations – you won’t be disappointed.
You also want to make sure that during the meeting both parties are clear when an offer has been confirmed or declined.
Don’t just listen to what your Client is saying… but also listen to what they’re not saying.
Design Professionals adopting the good cop, bad cop negotiation tactic:
Finally, don’t forget to allow yourself the opportunity to defer decision-making when appropriate.
There are times when having a behind-the-scenes ‘Bad Cop’ on your team can also help you save face and maintain relations, or buy time so that you have more opportunities to find a better solution.
If you’re a sole practitioner this can be achieved by attributing unpopular decisions to a third party (such as your professional indemnity insurance provider, accountant, business adviser, financial adviser, bookkeeper or another member of the design team). Just make sure they’re not in the meeting, with you.
Good Cop, Bad Cop
Now this is just one of the many negotiation tactics you’ll face throughout your design career… rather than learn the hard way, why not arm yourself with the right knowledge before you need it.
Here at Blue Turtle Consulting, we’ve been training Architects, Interior Designers and Design Professionals for over a decade.
We’ll show you the art and science of writing a successful fee proposal so that you can win more clients, have higher fees, and have fewer problems.