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Really Selling The “Exclusive”

Ok. Any recruiter worth their salt (never really knew what that means) knows that if you sell an exclusive, that you dramatically increase your chances of placing or filling that order! Well, that’s all great, but the real question is how to sell it and how to use it right! Most of the time when I hear a recruiter sell it, it is all self serving… In other words, the benefits to doing it are for the recruiter and not really for the client.  If you can get an exclusive it’s also good to sometimes consider discounting the fee, or conversely, if you have to discount a fee, it’s often worth exchanging that negotiation “give in” for an exclusive…… So, how do you do it…

First, always look for the tell tale signs that show you that you MUST sell the exclusive! I’m not suggesting that you not always sell it, but here are the times when it’s a must:

THE FOUR BUY SIGNS

  • Anytime you have to negotiate away anything, ask for this in exchange. For example, if you have to settle on a 22% from a proposed 30% fee, then ask/sell the exclusive in return
  • They ask you to keep the search confidential (or if you learn it is for a replacement of an existing employee) Wow, what a great way to sell the exclusive. Afterall, many recruiting firms will just increase the odds that word will get out.
  • If the opening is for a sensitive position within the company or for a job where candidates are available internally. Perhaps it is for a new division and someone news of this interviewing might create morale problems for the existing staff.  An exclusive seriously reduces any premature exposure.
  • Anytime a client discusses rules for dual submittals or asks you to sign a contract that states what agency gets the fee if the same one is submitted

So, how do you sell it. Well, odds are you have some good stuff, but just remember to ALWAYS make it about the client- A benefit to them for doing it.. Here are some selling points:

THE TEN “EXCLUSIVE” SELLING POINTS

  • Unless the position is confidential, it is in your clients best interest to get their name out as much as possible.  You need to explain to them that once you take the order, your job is to sell the company as best as you possibly can and to shine them in the best light.  Once you get on the phone, you’ll be touting everything that you learned about them. They want a great buzz on the street about them and they also want other people via word of mouth to learn about it (don’t worry, odds of that happening aren’t great). But, explain to them that if they don’t give an exclusive, then you nor the other agencies will ever mention their name. Why? Ask them to tell you about the last job they were pitched and whether the agency gave the name. Explain why WE DONT give out the company name.. Well, it’s for fear or KNOWING that the lead will just get passed on to another agency. So, just about all recruiters, unless it’s an exclusive or retainer, work in a veil of secrecy.. By giving you the exclusive, they avoid that and get to promote their company the best way possible
  • Similar to the above, explain that many candidates just won’t get excited over an “unknown” company, where the name has not been divulged, thus they will possibly be limiting their candidate pool.
  • Explain your office order priority system. Explain that all exclusives get access to all candidates first. Or perhaps you have a rule that exclusive clients get right of first refusal. You need to be careful with this one, but you can get the message across.. If you don’t love this one, then see the next one
  • Explain that although you will work it as hard, regardless of the exclusive that you also work with a network of recruiters (either in your office or other “partners” that you do splits with).. Explain to them, that when the shoe is on the other foot, you won’t even bother submitting candidates unless it’s a retained or exclusive search. As such, this can really assure that they get the very best talent out there.
  • If you don’t like either of the above two, then just explain that in your experience, when there are exclusives involved, clearly the client can understand that there is a great ownership and a greater sense of urgency to get this filled vs a position where there are multiple vendors. Frankly, there is just more incentive.
  • There’s no risk and only upside, especially if you set a time frame for the exclusivity. Enough so that they see that they are getting all of the great candidates that they need through you.. In fact, a recession or business slow down is the BEST time to sell an exclusive. After all, you’ll easily be able to find good candidates. In tight candidate times, some are often reluctant to sell an exclusive because candidates are so hard to find. So, NOW IS THE TIME TO CAPITALIZE on this and sell it with vengeance.
  • More recruiting firms simply equates to more work for the client. MORE=MORE.  More resumes, more calls, more organizing, etc
  • This avoids so much conflict! Conflict in general increases dramatically as the number of recruiting firms increase. It isn’t uncommon for a company to pass on a candidate if they received them from too many sources, simply to avoid conflict. This can’t happen with an exclusive. Similarly, there is conflict of interest. Now, you explain that you don’t operate this way, in that you will always give them 100% honest feedback, regardless of the deal arrangements, however, competing against multiple agencies can make the average recruiter look out for their best interest and not the clients. For example, if they only have one person in the process and they are a possibility for hire, then many recruiters will do all they can to get that person hired, even if they have to overcome some steep objections by the candidate or ignore some serious warning flags. Again, be careful, because you don’t want them to think that you work this way nor want them to think that you are threatening them. However, you know too well, that what I am telling you is true. With an exclusive, there is zero conflict of any  kind and it’s a true partnership, ensuring a longer term hire!
  • On the flip side of the conflict coin, sometimes agencies overlap with certain candidates. Sure, we recruit our people, but it can happen that the same candidate gets a call from two or more agencies. The risk here is multi fold.  First, some candidates will get turned off by this and not feel it is “prestigious” enough and will either pass on it or get a bad vibe. Secondly, Some recruiters who contact a candidate and learn that they were recently pitched the same job will immediately try to shove/force /submit the resume to the client to avoid “being beat”.. This is counter intuitive to the way that the client wants this process to work. If they just work with you, you will take the time to pre-screen everyone thoroughly and not have to worry about “beating the clock”… or, they don’t have to worry about the other agencies not being as diligent as you.
  • Finally, an exclusive can really help avoid some legal issues.  Explain that from time to time, candidates that learn of jobs through an agency may become disgruntled if they feel that they weren’t given the opportunity to interview because of discrimination. Or, some may feel they didn’t get the job due to discrimination. In a case such as this, the EEOC often hold both the client and agency responsible. Don’t get me wrong, clearly, as a recruiter, you are responsible both legally and ethically to the EEOC to not discriminate, however, you can explain that by using just you, you can ensure that they are getting a complete balance of qualified candidates and thus can eliminate the risk of someone being sloppy. The more firms they use, the higher the risk.

ADDITIONAL THOUGHTS

One final though on exclusives. As I mentioned it can be used in negotiations on both sides. I already explained to sell the exclusive if you have to lower/negotiate your fees.  Well, the opposite can also hold true in that you CAN consider lowering your fees if you get an exclusive. Now, those of you who NEVER change your fee can ignore this and we don’t have to argue. However, those of you who do charge different fees at different times should note the following.  The total amount of fees that you generate in a year is simply a mathematical equation.  You place X% of your jobs, multiplied by your average fee and you get your revenues.

Of course some recruiters are better and close a larger % of deals than others.  My point is that expected value is a KEY CONCEPT that should not be ignored or at least should not be ignored on principle.  I know some people that try to get a 30% fee, but will NEVER go lower than 25%. NEVER!!  But, assuming you work against one other competitor for this order that is as good as you..?? Then, all things being equal, what is your expected value on that placement? The answer is 15%.. Remember, expected value is the % that you can apply to your entire population.. So, for example, if you work 100 orders at 30% and compete with exactly one other identical firm, the odds are that over time, your expected placement rate would be 50%.. Thus your expected FEE % per order would be 15% (ie multiply 15% X  the salary  X the number of orders worked.    Or put more simply, at 30%, the odds of you placing it are 50%.. So, if you have 2 deals, you’ll place one at 30% and will lose the 2nd..  Ok, you get it, right?  Now, what if you worked with 2 competing firms. For each deal, you have a 33.3% chance of placing it (all things being equal).

So, my question to you, is what is better? If you had to chose only one for the rest of your career.. would you select to always be guaranteed to have a 30% fee and always have your best competitor working each deal with you…. OR would you rather have a 20% fee for every deal, but also have an exclusive on every deal?   Now, I know there are different answers out there.. So, I’ll only point out that math. That in the first example, you’ll average 15% of the total job orders worked and on the latter, you’ll average 20%. You’ll make more on the 20% always!  Similarly, I always looked at a 30% fee as a 10% fee if I had two competitors. Now, you can do this with every order, of course… However, the real game is to maximize your likelihood of closing a deal.  If you get the exclusive, work without resumes, get guaranteed slots, have them interview in your office, etc, you increase the likelihood of placement.. AND, since the math show that its YOUR LIKELIHOOD multiplied by YOUR FEE, why do so many recruiters just focus on the latter? So, no, don’t just go ahead and offer up a lower fee. But if you can really use this as the last resort to get that exclusive, then you will be creating a true win win! You make more (on average) and they save more !

Now, Sell like the wind!

Carpe Diem

Neil

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4 Comments

  • Donna Kelly
    Posted November 11, 2009 at 5:23 pm

    Neil,
    I meant the virtual 5 week class. And yes, unlike you, I could not resist the urge to Google.

  • Donna Kelly
    Posted November 11, 2009 at 4:11 pm

    Too bad I can’t follow simple instructions. That was me with the def on worth their salt!
    All the best!

  • Anonymous
    Posted November 11, 2009 at 4:09 pm

    Here you go Neil,

    Worth Their Salt
    Early Roman soldiers received an allowance of salt, which was called a salarium–a “salary.” A good soldier had to be “worth his salt.”

    And may I add, another fantastic article!

    By the way, is the web based seminar the same as the one you and Tim will be conducting? Thought about having one of our recruiters here tune in. Let me know. Hope all is well with you and your family! Take care!

  • Neil Lebovits
    Posted November 11, 2009 at 4:13 pm

    LOl Donna. So, did you know that or did you google it? I resisted googling.. Do you mean my virtual webinars? they are different. Did you want to consider sending someone to the dec 405 event or did you mean the 5 week class? would love to have them. it will be a big help. promise!! good to hear from you!

Comments are closed.