Before we move on, just to be clear, our services includes both freelance translators and agencies, who are warmly welcomed to this post. This is not about translators vs agencies, it's about us who want to earn decent rates for everybody involved vs lowballers who bring rates down.
Okay, so how did it start? Well, have you ever been to an oriental bazaar? Have you ever heard the bids and quotes that fly back and forth there, with their huge disconnect from the final price or the cost or fair value of the item bargained for?
It just takes the gall — or ignorance — to blurt out a silly proposal, and then it might work just like that. Especially on an ignorant tourist. On the other hand, those tourists sometimes get really great prices from sellers who approve of their mettle. It's a kind of sport, you know.
I once bought two silver bracelets I didn't want to buy for ITL 5,000 both. The seller had started from 10,000 apiece. The funny thing is that I wasn't pretending: I genuinely didn't want them, so I suppose I came out really convincing. I have no idea whatever they were worth in reality (not that I really care), I don't think I made the bargain of my lifetime in that street, and I don't think many people really paid 10,000 for a bracelet of that kind.
… However, someone, anyone, probably must have at some point accepted the price without arguing or wanting to go away. And quoting it probably cost nothing, so it was well worth trying. It cost almost nothing, bar a certain minimum risk, since most prospective customers could still be followed and accosted again and lured back into a special deal, making the purchase in the end. At worst there'd be some yelling and no deal, some wasted time.
Whether you're buying low or selling high, the cost of uttering an outrageous offer is likely to be next to none for the person offering it, as long as the other party to the negotiation table (e.g. you) won't irretrievably walk out and never want to come back, which does happen sometimes when the low or high price totally destroys the credibility of the person who made the gambit. Obviously, whoever makes it had better do so with a straight face, unless it's meant as a playful insult and a warm-up before real negotiation starts. It's their poker face which makes some of those people scary, although playing stupid is also effective (what? they just don't understand! what do you mean market standard?).
If the line's delivered well, the person on the receiving end of it may begin to doubt himself or his previous assessment of the value of the goods or services, question his own knowledge and his calculations, lose spirit, be thrown off his guard, disconcerted, thus vulnerable. Even that latter kind of damage softens him up for later, at least if he can't shake off the shock. A weakened person may lack the stamina to offer a vigorous defence while not having the luxury of being able to quit.
Another application of gall-based lowballing — one that I suspect just might be taking place in some sectors of the translation 'industry' — may well consist in consciously trying to set the new normal, such as to drive supplier prices into the ground.
For example a rogue agency somewhere could make some translators believe that $0.01 per word is the standard rate by just simply offering or demanding it again and again. Someone would cave in, then another and another, the domino effect and groupthink would do the rest. Perhaps one day those who still held out would find themselves a besieged fortress, a last vestige of what no longer exists. (Just to be sure, clients who pay decent rates still exist, they are just difficult to find and connect with.)
Alternatively, it may be a desperate attempt by one desperate trader to find another to complete a desperate deal. Or perhaps a sociopathic kind of cold calculation calmly assessing and addressing the risks. I'm not even sure I want to know.
There are many possible responses to the lowballing act. You could throw your hands up in the air and scream robbery. You could kick the galling lowballer out, or burst out yourself, depending on whose turf you were. Or call him some ugly names and tell him some other nasty things, whether you leave the table or not. In some cultures, or rather in some circles, that would pretty much be the standard order of business. However, in a typical Western perception what a lowballer is doing is not the standard order of business but you will still appear to lose the negotiation game if you lose your cool.
Even calling the lowballer on his alleged bluff is probably not worth it in the greater scheme of things. He could pretend to be hurt on a personal level and just leave, extricating himself from that difficult situation. It could also tangle you up in vain discussion and waste your energy.
Rather, defeat the lowballer with his own weapon. Simply reaffirm your fees.
Calmly, coolly. Without being defensive. Don't grace the lowball with a serious substantive response. Actually, even hauling the $0.01 offer to a point where translators began to address it seriously and gave it their consideration would be a minor victory for lowballing. It helps if you know what you're charging for and why you deserve it.
Don't grace the lowballer's excursions with a targeted response when they become more personal, either, unless you're sure you can deliver a solid diplomatic punch which will take the lowballer's breath away but without conveniently pushing him out of the ring. And before you land a punch, you'd better know you aren't going to hit a misguided noncombatant.
Instead, just simply restate your fees, using a couple of different words each time to avoid the impression of using a broken record tactic. You can't simply repeat the same slogan over and over, so rephrase. Rely on some easily available authority but don't overdo it. Have the gall to pull the authority from my policy (our policy) or my fee schedule/structure/system or even budget. No serious discussion on the merits of any outrageous proposals, preferably no complaining about the impropriety of the other party's conduct.
I'm sorry, but it is not in our policy to grant significant signing-up discounts to new clients. No, sir, our policy does not provide for exceptions to this rule. [He calls you inflexible, and you reply.] That is unfortunate. Please do not hesitate to come back when you have a larger budget/change your mind. [At this point begin to rise from your chair.]
Hint: Recall the lines you've heard from your own current, past and could-have-been clients when you proposed higher rates. Those are going to have sounded similar to what you need to say now.
Do challenge the lowballer, however, when he openly makes some easily disprovable false assertion or cites some that doesn't exist or doesn't really support the claim. Don't assign blame, speak out accusations or attempt punishment. Just state the facts as they are and abstain from commenting. The ball will be in his court and uncomfortably so. You can even leave him some uncomfortable silence to deal with. But don't become overconfident or he might still find a dent in your armour — finding himself in a corner like that may call for a desperate move of some sort.
One example of simply citing facts can occur when someone says your rates are oh-so-high, the market standard is much less and so on, whereas you know for a fact that you're charging precisely at the market average and have surveys to back it up with (e.g. the ATA Compensation Survey). However, if your negotiation partner hails from a less affluent region or is a fresh escapee from the bottom segment of your own market, he may simply still be in an initial phase of denial, so don't be too hard on him if you're beginning to see understanding in his eyes or genuine shock.
You will earn some points in the negotiation by shooting down an obvious straw, and also earn credibility by displaying your good orientation in the standards of your own business sector, including your competitors' pricing. In doing so you may be able to convince a genuinely ignorant party, who did not consciously intend to lowball you.
Yes, you can definitely find a good translator within that fee range, but the chance is very slim. It happens, but it's slim. The chance of ending up with someone underqualified is much higher. It can take a lot of time looking, and a lot of initial disappointments. [Yes, you've just acknowledged that it's possible to find equally skilled translators at a lower rate, just very improbable and risky. And you've tactfully conveyed the message that those guys' pricing is low, rather than yours being high, without accusing them of undercharging.]
You can and probably should replace underqualified with something more specific and appropriate in the context of the job you're talking about, e.g. inexperienced where experience is crucial, non-native if you need native translators, without the necessary [something], such something being dedication, or writing skills, or understanding of business, whatever applies in your particular case and is not dishonest to say.
If your negotiation partner pauses for a while and begins to looks perplexed at this point, chances are you've been dealing with a misinformed person who had possibly previously trusted his original source of information, which may have been a close person or a trusted employee or business partner… or even a well informed person whom your interlocutor had simply misheard or misunderstood.
Your negotiation partner may also have — until now — doubted any price-related information coming from you as from an obviously not disinterested source, which is understandable, and at which point you may want to become gentler, more reassuring, substantiate your information with objective sources unconnected with you, reiterate your value proposal, i.e. tell your prospect what you're giving him and why it is good stuff, what he can do with it, what risks are avoided etc. Perhaps cite any ethical commitments obliging you to provide fair and accurate information, represent your services accurately and so on.
If he walks out on you…
On the other hand, if your lowballing negotiation partner decides to leave the table, with or without further comment, in disbelief or otherwise, don't try to hold him back. Merely express regret and reassure him that he's welcome back if he so chooses. In fact, it may be a ruse — don't presume it is (presume nothing), just be aware that it may be a last-ditch effort to get you to back down, whether by fear or pity.
He may still come back to you after double-checking his previous sources, validating your data or probing for credible information elsewhere. At which point you may have a new client. Other strong reactions may result from facing a difficult reality check. You probably wouldn't feel great in that person's current position, yourself, either. It generally tends to be embarrassing and may be a source of great distress when you hear your costs are about to double (or worse).
Also, be wary of the tempo-setting effects of the steps your negotiation partner takes from his low offer upwards in the direction of your original quote. The distance between your original quote and your prospect's counteroffer will tend to be indicative of how far your prospect is prepared to go. So may the steps — large or small — by which your prospect gets closer to your original quote, e.g. whether they are 10% or 20% of your offer or theirs.
Example: If I quote an Indian agency €0.10 per word and they respond with a €0.035, they're rather obviously not going to accept €0.09 in the end unless I'm a real wizard of negotiation and have a good day. Since the divide is so huge, I basically say my goodbyes (note to self: I should have thanked them for thier time! I'll try next time.). Naturally, since I'm really quitting, the ball is totally in their court. If it even still is there. So they propose €0.045. That's 28% up from their last offer, which is actually a lot in that light, but neither the added €0.01 nor the resulting €0.045 appear significant next to my original quote. The €0.01 step makes it rather clear that perhaps or two more such steps would be possible after playing it right, but no more.
What's important here? Basically, the negotiation partner sets the tempo at which the two of you will now walk — if you allow it work. Don't allow your brain to accept the conclusion without challenging it, i.e. be conditioned to believe that €0.01 is the size of the steps you'll be making (and there are only so many steps you can realistically expect the other party to go). Be alert especially if it's not an agency from a developing or third-world country but someone more affluent from Europe or the States, whose real payment potential may be expected to be larger.
In this latter context it is important to note that low counteroffers and small incremental steps may in some cases result from a less affluent prospect simply communicating to you what sort of price would be closer to his comfort zone. With some empathy, we can even realise that such a proposal might even be somewhat high in the light of the going prices in the prospect's market or the prospect's level of affluence. The gradual concessions made by your prospect may actually be costly to make. And that's not the same as a powerful western corporation attempting to remodel the market to its benefit by forcing suppliers to accept paltry rates.
The result, however, is still that you can't really expect to be paid within your comfort zone. If only, perhaps, due to the different costs of living between your own place of living and your prospective client's.
Still, unless you want to the amount you want — and you need to realise that nothing forces you to conclude the sale! The world won't end if the deal falls through.
Here's one more oriental reference to illustrate the point: The weakness of oriental sellers lies in their compulsion to make a sale. They just can't not make a sale, bar some tricky exceptions such as when you are deemed not worth trading with or sized up as too obviously penniless. You don't need to fall into that trap when you — as a translator or agency — offer translation to interested parties. Resist the compulsion to make a sale. You won't be a wimp if you don't make a sale on that day, I promise you. Quite the opposite, in fact. The hardest victories are those won over yourself.
Also remember that the toughest negotiating buyer is one that doesn't actually want to buy. Don't waste time trying to convince people who don't really need translation or don't need the quality or security you offer. Rather talk to people who have need of your services and can appreciate them. In fact, even if you were to end up working for a couple of cents a word, it would still be better to work for a favourably predisposed small company who appreciated the value than for a powerful, impassive and insensitive client who grudgingly paid your best rate. In which case can you expect a raise if the company becomes more successful over time or especially in connection with the value introduced by your expert translation?
Don't allow your ego to be used against you. In any case, it shouldn't feel bad if someone with a bad (unrealistically cheap) business model can't afford your services! If he could but won't, then why should you feel diminished in any way for actually resisting his attempt at drawing you into one of his shenanigans? Come on, that's a victory for you!
Unless it's a genuinely misinformed person, in which case you win by educating, or a poor person whom you want to help, in which case you win by doing pro bono work but realising what your work is worth.
I'm not mentioning a thrifty person here because the way I see things a thrifty person would scrutinise the value and clip your profit but not cut your initial price in half. That goes beyond thrift (as long as the bid is a serious attempt and not a ritual you can find in some cultures).
Now let me bring up another oriental example: If they see they can't sell you a sword, they'll at least try to sell you a dagger. If you won't buy (can't afford) a robe, then how about at least a scarf? If the prospect's budget is capped, you can try offering a service that's easier to provide within the prospect's budget. In translation, this means fewer pages, no unnecessary for-publication editing, a longer deadline, no added services or freebies, more work for the client to do in preparing files for translation, more restricted availability of any rewrites or satisfaction edits, more things done your way rather than the client's way… just don't expect it to work!
It can work if you can get the lowballing prospect to a point where the balance of the updated bargain (less work to do for less money) is acceptably above your bottomline. But otherwise the point is more to resist lowballing in a professional fashion and send — and reinforce — the message that the same value cannot suddenly be obtained for, say, one fifth of the current fair standard.
No freebies. None of the custom stuff the prospect wants, especially if it isn't really translation-related. Or suggest a less senior or otherwise cheaper translator (but one that's viable).
And don't despair of the market too easily. Misinformed people and hardball players are found everywhere. Just recall all the times you've been stuck doing a low-paying job (or your trust translators were all stuck in an unprofitable project) and you were unable to accept a job that paid better. How about a vacation? Or, if you're being offered something along the lines of a dozen bucks an hour, chances are your loved ones would give more to see you.
(And if you really feel like working, do something pro bono. If translator, let your favourite PM know you're available.)
Recap: Keep calm (calm is almost a synonym of professional). Be confident. Keep your head on your shoulders. If they surprise you once, don't be surprised again. Don't presume things must be the way they said or close, you're still allowed to make proposals that are very different. Don't burn your bridges. Don't be defensive about your rates if they're fair. Learn from people on the other side of the table (including the kind of we can't responses which you may have heard after asking some of your clients for a raise or proposing a fee above their comfort level).