One thing not mentioned that I've found over the years is that sometimes asking for the higher rate from the start increases the clients perceived value of you.
This was put succinctly by an old boss of mine "serious people charge serious money".
He was full of these another that stuck with me is "Don't charge what you think you are worth, charge what they think you are worth", on one system I built I went in with a price I thought was really high, got the job and then found out afterward I was still significantly cheaper than the other company that had bid on the contract though sometimes that is just the way it goes.
I once lost a huge project simply because 1) I charged less than my competition ("there must be something wrong with them...") and 2) I didn't add a 20% annual maintenance fee my the proposal. Needless to say, I never made that mistake again.
But yeah, I can't agree more.
The amazing thing about raising rates (which I think patio11 and I talked about way back when here: http://www.kalzumeus.com/2012/10/10/kalzumeus-podcast-3-grow...) is that you make more money, get better clients, and get treated with a lot more respect.
One of the guys who worked with me was an ex-employee of the university we were submitting the proposal to. It's always... fun when procurement divisions are involved. :-)
Yeah, I particularly agree with "negotiate on scope". That's a way to make clear that you appreciate their budgetary concerns and signal that you're happy to be accommodating, but that your time is valuable. Then they're left with the only counter being that they actually don't think you're worth that rate.
I also think it's worth noting that there is a cost to them to walking away and finding someone else. As the potential contractor, you're not the only one who has put time into figuring out the project. It probably isn't worth that $10/hr rate discount to have to negotiate all over again with someone else who they haven't identified yet, don't know if they'll like as much, and who may charge just as much or more.
One thing not mentioned that I've found over the years is that sometimes asking for the higher rate from the start increases the clients perceived value of you.
This was put succinctly by an old boss of mine "serious people charge serious money".
He was full of these another that stuck with me is "Don't charge what you think you are worth, charge what they think you are worth", on one system I built I went in with a price I thought was really high, got the job and then found out afterward I was still significantly cheaper than the other company that had bid on the contract though sometimes that is just the way it goes.