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By Colleen Francis

Today, we're going to take a closer look at an all-too-common problem: what you can do to get orders from an existing client when your competition keeps lowering their rates.

All staffing agencies face competition. Steep competition. And nothing is more frustrating than having your competition offer to sell to your existing client base at dramatically reduced rates.

Consider the following scenario: your biggest client calls to tell you that they've been offered a cut-rate price on the very same placements you have been making for them for years. They like doing business with you, but with the pressure on to save money and increase profits, this new lower rate is just too attractive to pass up. No matter how much you preach value to the client, they continue to come back with the lower rate and tell you they are working from a strict budget.

To make matters worse, your competition is also trying to offset the lower rate with a longer contract, which will hurt your chances of ever getting the client back if you lose their business now. You know this is a risky move for your competition, and that they will probably lose money on the deal.

What can you do to close this business without taking a huge bath on your profits?

Step One: Focus on testimonials.
Testimonials are the most powerful weapon staffing agencies have to prove their value to the people they do business with.

Clients tend to believe other clients more than they believe you. Find ones who already switched for a lower rate and then came back to you because their experience with the competitor was less than satisfying. Or find clients who were considering moving their business, only to change their mind when they realized that the long-term implications were less than positive.

These client stories will add firepower to your case and help you convince your client that doing business with you truly is a better and more profitable solution in the long run.

As a side note: you should be collecting testimonials from every client you do business with, regardless of how well your business is doing currently. Testimonials are your most profitable selling tool, and you can never have too many.

Step Two: Learn from history.
Show everyone in your office that prospects who only buy on rate are not the best clients for your business because, in the long term, they are not profitable clients.

If your sales team is confident in selling based on the quality of your service and that of your candidates, they will seek out prospects who value quality over those who only care about rate. Your team may have to be willing to endure the short-term pain of letting a client go to make long-term gains with other, more profitable clients.

Step Three: Reward loyalty.
Show your long-term clients how much you value their loyalty by creating an account-management process that rewards them for keeping their business with you.

Most agencies make the mistake of only offering discounts and bonuses to new clients. Instead of devising a scheme to reward new business, create a program that rewards loyalty. For example, perhaps your clients can receive a lower rate after two years of continuous orders. Or maybe longer-term clients can be the first to receive announcements of superstar new candidates or new market niches you have grown into.

Take a look at your current client acquisition plan, and make sure it's not "sweeter" to become a new client than it is to stay an existing client. After all, long-term clients are far more profitable than new clients. Some studies show that acquiring a new client costs as much as 15 times more than it does to sell more to existing clients.

Ask yourself: can you increase your profits by spending some of the money you currently allocate for landing new clients, towards keeping your existing clients instead?

Step Four: Give yourself some breathing room.
Make sure you're never in the position of having to save an account at any cost, simply because it's the ONLY account you can close this month. If you don't have other options, you will feel enormous pressure to close business at any rate.

What can you do to avoid this scenario? Always be prospecting. The best staffing companies manage a full funnel of leads (at least 3-4 times your quota of active qualified leads) at all times. This gives them the freedom to be able to walk away from an unprofitable order, and focus their attention on a profitable one instead.

Step Five: Do your research.
A company's website is a great place to do a little pre-sales call research. However, most companies only put what they want you to see on their sites.

If you're trying to save a deal, you might want to dig a little deeper to find out more about your client's past, present and future, what their clients think of them - and their reputation in the industry.

Start by using Google or any of the other countless search engines out there. You may be surprised how many blogs, message boards or other websites you'll find that may provide you with some deeper insights you can use to ask your clients about the rate issue. Just be sure to consider the source. After all, most message boards are unfiltered, and you can't trust everything you read online!

Step Six: Don't add value if your client won't value it.
Last but not least, don't randomly add value unless you know for a fact that your client will appreciate it.

Sales people often make the mistake of piling on extras that the client may not want or need. The result is that it will cost you more to give the client something they couldn't care less about in the first place—a perfect lose-lose proposition.

When I ask many of the sales people I coach why they do this, they usually tell me it's because they "think the client will like this." Thinking the client will like something is the same as assuming they will like it. You only need to think back to grade school to remember what happens when we assume.

Value, like beauty, is in the eye of the buyer. Ask questions to find out what, besides rate, would keep the client from giving their business to someone else. Then set to work to provide them with as many of those concessions as you can.

If the client doesn't want any extras, then you can't use the value vs. rate argument to win this business. Quit trying and go on to something else.

In today's highly competitive staffing marketplace, rate pressure is a constant menace. If you want to be successful, you need to make sure the orders you are taking are profitable ones. Although your first goal should be to keep your existing clients, be careful of offering so much that the client actually ends up costing you money. If your client base is too rate sensitive, go out and find new clients that want the value you have to offer—not just the lowest rate.

It's not easy, but it is simple to do if you have conviction. The first step to finding better clients—ones that focus on value and not rate—is making sure you are 100% confident that you are delivering such a high value to the marketplace, that all buyers will want to own it at full cost.

Colleen Francis, Sales Expert, is Founder and President of Engage Selling Solutions (www.EngageSelling.com). Armed with skills developed from years of experience, Colleen helps clients realize immediate results, achieve lasting success and permanently raise their bottom line.

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