QUESTION: Have you taught tiered pricing and is it successful long term? I have done both contingent and retained. I was thinking of adding an exclusive model as well.
The Reality of Exclusivity Without a Retainer
Is there really anything exclusive without a retainer? Even with a retainer, technically, there are alternative means they can use to fill the assignments.
Here is what I find gets clients. It is not the fee. Within reason, you can actually charge significantly more than your competitors and get money upfront.
It’s do you understand the problem better than them? You do that by asking great questions in the right order. Then do you have a solid prescription? Meaning you walk them through step by step what you are going to do to help them fill the opening.
Positioning the Retainer
After identifying the need, I would say, “Hey Dave, based on your urgency and the fact that if this isn’t filled and you don’t have an offer out in the next 30 to 45 days… these are the consequences you outlined for me (I would restate the consequences they outlined), we need to be aggressive.”
We will have our research team put together a list of 60 to 80 people, and we will go through that list up to 7 times over 3 weeks through a combination of voicemail, emails, and text. Of the 80 people we put together on that list, we will probably have talked to 60, of which a certain number of those are going to be interested but not qualified, qualified and not interested, qualified and interested, but the compensation might be out of alignment, and then we are going to get it down to probably 4 or 5 people that have a couple of things going for them.
(1) They are in the top 15% to 20% of their profession
(2) we have identified at least 2 reasons for them to make a change.
We are going to communicate all of that to you.
We are going to walk them through the process after every interview to help find and identify what else they need to hear for this to be a valid opportunity, assuming you want to continue with them so that there are no surprises at the end. For us to execute at that level, that requires an investment on your part of 28.6% of the individual’s first-year base salary and an upfront deposit of $7,000 which is fully credited on the back end, are you authorized to approve that?
Overcoming Retainer Payment Resistance
Now, there are usually going to be a ton of objections.
“We do not normally pay retainers.”
“I do not believe in retainers.”
You have got to be ready for it and not surprised by it. This was true for me; most of the people I had worked with before they worked with me never paid money upfront.
“You can reference check me, Mr. or Ms. Client, to see that I deliver in 30 days or less. I will have a portfolio of candidates in the interview process in 30 days or less. You can reference check me on those people’s quality and the fact that almost all of them when made an offer, accept it. For those who won’t accept an offer, part of our process is to weed them out.”
Monetizing the Cost of Vacancies
One of the things I did as part of this process with them was have them monetize the cost. What does it cost every week, every month, for this position to remain open, both in (1) actual dollars, and there is an actual dollar cost if you do a little digging and a little bit of a process, and (2) any other possible consequences or risks that the company might take?
That is what gets money upfront or exclusives.
Making the Shift from Contingency to Exclusive/Retained
I would make a goal for the rest of 2024 to migrate out of contingency or nonexclusive contingency. Still, your only two options are exclusive and retained. It would help if you used nonexclusive contingency as a recycling plant for the incredible talent that you are finding in your retained business. But this way you can get them a choice. What if I go with the exclusive contingency? The reason I wouldn’t say I like that is because I cannot give you 6 to 7 attempts. I can only invest some of that money in research in case you cancel the position or Mr. or Ms. Perfect walks in the door.
Promising and Delivering Superior Service
I can promise a lower level of service, by the way, and deliver a higher level of service, and then I am in integrity, meaning I only have a little to work on. I am not telling clients that I do not have a lot to work on. No matter how I fight this, if I am not going to get money upfront out of this person, if the company has got a good story, I have access to the hiring manager, the compensation is right, they have got a good story, alright, I will work on that.
I have said this to clients. I’d go, “You know what, I have an opening on my calendar. I have a few weeks and can probably hit this hard. You have got to promise me though, if Mr. or Ms. Perfect walks in the door, you have got to let me know because I am going to go beyond what I usually do on contingency for you because what I am hoping is that if I meet or exceed your expectations that the next one will be on deposit. While we are on the phone, Mr. Client, if I met or exceeded your expectations on this one, would you be open to giving me upfront money on the next one?”
P.S. Whenever you’re ready… here are 4 ways I can help you grow your recruitment business:
1. Grab a free copy of my Retainer Blueprint
It’s the exact, step-by-step process of getting clients to give you money upfront. https://get.therecruiteru.com/lm
2. Join the Recruiter Think Tank and connect with firm owners who are scaling, too. It’s our Facebook community where smart recruiters learn to make more money and get more freedom. https://www.facebook.com/groups/there…
3. Join me at our next event
3x a year, I run a 3-day virtual intensive, sharing the 9 key areas that drive a 7-figure search firm. Click here to check out the dates of our upcoming event. https://get.therecruiteru.com/bdmastery
4. Work with me and my team privately
And if you ever want to get some 1:1 help, we can jump on the phone for a quick call and brainstorm how to get you more leads, more placements, and more time. https://get.therecruiteru.com/scale-now
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