My former students from workshops and college classes often contact me about pricing and negotiating with clients.
This blog post is more about how to respond to a client or potential client when they make you feel like you were just insulted by them.
While you should figure out your Cost of Doing Business and know your bottom line to do a job, often, people will come back saying they only have a budget for less than you can accept.
My friend just called and was quoting on covering a business event for a day. She had figured this was probably an excellent place to network, so she cut her price in half and quoted that figure.
Always Quote Full Price
I told her she should always quote her average total price and then show a discount and why they are getting it. If you don’t do this, they think her price is half what she needs to charge. They tell their friends this is her rate.
Expect Negotiating
Negotiation theorists generally agree that there are two primary forms of negotiation:
- Distributive Negotiation: this is also referred to as positional or hard-bargaining negotiating. …
- Integrative Negotiation: this is the softer side of the two forms of negotiation, often referred to as win-win.
You need to figure out quickly which type of person you are dealing with when negotiating.
After my friend gave them her half-price quote, they returned with a low-ball response. “We only have $200 budgeted for the event.”
Respond Professionally
Often in the negotiating, one of the parties can feel insulted at the low or high dollar amount.
I recommend trying your best to stay with your pricing so that you are not going below your bottom line. Also, think of other things you can negotiate for that are of value. Maybe they can give you their contact list that you can use. Perhaps you can trade for free advertising.
Try and stay with something that sounds like, “I would love to cover your event for you.” Then you can outline the pricing and what value you bring to them.
You say I can do the work for you at this price. They say no, NOT YOU if they cannot afford you.
Know Your Numbers
I cannot stress enough that if you do not know your “Cost of doing business,” you will not be in business very long. You need to know the total amount you have from a job to pay your bills and also have money to invest in the growth of your business.
Great Video to Make My Point
This has been around for a while, and I have shared it in the past, but for those new to negotiating, this helps you see how often silly people can look for what they are asking. These are examples of Distributive Negotiation where they are trying to get something for below cost or even free.