I am often contacted by my former students from workshops and college classes 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 your Cost of Doing Business and know what your bottom line is 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 a good place to network as well, so she went ahead and basically cut her price in half and quoted that figure.
Always Quote Full Price
I let her know she should always quote her normal full price and then show a discount and why they are getting the discount. The problem if you don’t do this then they think her price is half of what she needs to charge. They tell their friends this is her rate.
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 they are negotiating.
After my friend gave them her half-price quote they came back with a low ball response. “We only have $200 budgeted for the event.”
Often in the negotiating one of the parties can feel insulted at the low or high dollar amount.
I recommend trying your best to just stay with your pricing so that you are not going below your bottom line. Also, think of other things that you can negotiate for that are of value. Maybe they can give you their contact list that you can use. Maybe 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 go on and outline the pricing and what value you bring to them.
Basically you say I can do the work for you at this price. They are saying 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 real amount you have to 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.