Should You Discount Multiple Exclusives?

QUESTION: If you were in multiple exclusive openings with a current client and they want a discount, how should you respond without losing your exclusives? – Steven

ANSWER: Great question.  There are two kinds of scenarios.  One scenario is they are giving your ten openings for one type of position.  For example, you get ten sales representatives in Dallas that are going to be salespeople with a generic background and maybe a base salary of $50,000 or $60,000 a year.  With that you can invest in a ton of research on an exclusive basis and saturate the greater Dallas area.  It is not the same as doing ten individual searches.  You do not have to work as hard at ten searches and you may want to give a discount, not for all ten positions, because especially if it is contingency.  You may not fill all ten.

For example, if you are fee is 25% you might say you will fill the first three at 25%, fill the next three at 22.5%, and will fill everything after that at 20%.  That is with multiples hires, one city or one geographic area.

But the flip side is, let us say they give you ten searches in ten different cities.  The way I positioned it with my prospect/client was you are not giving us ten openings that allow us to leverage our research.  You are giving us ten unique searches that ten levels of full execution.  One each one of these searches, Mr. Hiring Manager, we have to put together and invest in a list of 75 to 85 names.  We have to go through 75 to 85 people.  We have to leave 5, 6, 7 voicemails for these people in each one of these cities.  We are thrilled to do that for you.  There is really no leverage from us because each city is a stand-alone search.  For us to do this at the level you are looking for us to accomplish it at really requires us to invest our full time and effort.

That is, by the way, the argument to answer your question on how do you avoid offering the discount.  I usually respond and walk them through in gory detail what you have to do to fulfill the search and that it is not ten openings.  They are not buying it “like if you went to Costco.”  They are not buying a case of openings where you bundle it all up and ship it together.  Each one is individually customized.

My experience is when you explain it to the clients like that, they get it.  Now you may do something to make it a win-win.  Sometimes in those situations I will say, well, why do we not share some of the risk then?  If we are going to invest all this time, money, and effort into X amount of searches, can you give us a deposit?  I used to get $5,000 to $7,000 a position, but even if you can get $1,000 or $2,000 per position you are mitigating some of your risk.  That is the most important thing you want to do in these scenarios is mitigate some of that risk.  You have to explain that.  On contingency, if you just pull up stakes and say, you know what, we had a board meeting last week and I could be a month into this and we decided we are not going to fill any of them.  Financially that is a huge setback to our firm based on the amount of effort we would have had to put it.

A lot of times in multiple position openings, you want to explain to them how you work and get into a dialog of how you can help each other so that the likelihood of these things getting filled is increased for their benefit and the likelihood of them not walking away from you, killing you, is addressed also.