Next to public speaking, asking for money is, for many, a form of torture. Of course, we need to get paid for products we sell or services we render but, unless the exact price is spelled out to the buyer beforehand, the transaction frequently requires some form of negotiation.
Even when someone asks what we charge, we tell them and they say “I’ll take it!” we may be left feeling shortchanged. Did we ask too little? Do they feel they are over-paying? Are they just agreeing to the price to avoid a process that might feel uncomfortable?
Is there a better way to arrive at a fair price?
A successful negotiation is a give-and-take between a buyer (someone who “wants”) and a seller (someone who “has”) that leaves both feeling “okay” about the end result.
Here’s how to negotiate so that both parties feel “okay” about the deal:
1. The first step is to be open to and willing to negotiate. A “take it or leave it” approach may lose you more than just a sale (like a repeat customer).
2. Do your research (on the company, the project, the competition) beforehand — remember that “forewarned is forearmed.”
3. Prior to your negotiation, determine all of the components that comprise the project or product offering. These may include quantity, deadline, usage, presentation rounds, possible upgrades or add-ons, expenses, etc.). Each of these components may provide a point of negotiation. The ability to add or subtract a component can give each party some options — the “must-haves” or the “nice-to-haves.” Having components that you can “play with” and still negotiate a price that works for you, and a solution that works for the other party, is ideal.
4. Don’t skip the discovery process — listen and ask the right questions so that you are very clear on what it is that you are negotiating (get a complete understanding of the new job, project or scope under discussion). Be clear on exactly what it is the buyer wants — and really needs.
5. Don’t be in a rush – while you might just want to get the transaction over with, slow down.
6. Sshhh! Let someone else do the talking — the less you say, the more you may learn (which works to your advantage).
7. Take notes – doing so will make you initially pay more attention and later, you’ll be able to review your notes (this is better than trying to remember what was said).
8. Since nobody likes to talk about money, don’t talk about money. Don’t even think about your transaction in terms of money. Instead, think about, and feature, the benefits of working with you, the value to be gained from purchasing your product or hiring you (or in working for you, if you’re on the other side of the table). When these attributes are clearly defined, it is easier to get your prospect on board.
9. Never enter a negotiation without knowing your bottom line; given the parameters, figure out ahead of time the least you will take (or give, if you are on the other side of the table). There may come a point when you will need to walk away from the negotiation; not knowing where that point is could be detrimental.
10. Fully recap the project requirements before delivering a quote. Carefully walk through your discussion, enumerating each of the components, as you understand them, that make up the project or product and define the expected deliverables. This will make sure you’re clear on what’s being negotiated and also provides a good “lead-up” to reiterating your worth to the other party.
11. One of the most difficult steps in a negotiation is often the “Who goes first?” question. Do you wait until the buyer makes an offer or do you, as the seller, go first? If you ask a buyer what their budget is, they might not tell you as they wait for your offer (they are hoping you will ask for less than their bottom line). But they might tell you their budget and it may be far below what you think you want to charge (then the issue is how do you “make up” the difference or delete from the project to reach their budget). This is often where the true negotiation begins, when it may get tricky and where experience helps. This is also where the “components” come in to play — think of them as your “bargaining chips” to include or exclude, in order to satisfactorily achieve an agreement.
12. Not quite sure what to quote? Feeling pressured to give an answer (or a counteroffer) but not quite ready? Big decisions require time to ponder. It’s okay to say “Let me take a bit of time to think about this.” Again, because talking money can be painful; we often just want to get it over with. But beating yourself up over a lousy negotiation could hurt for a lot longer.
Negotiating is like a perfect dance between buyer and seller. Arriving at a “good deal” leaves each party feeling “okay” and, once the negotiation is complete, able to work comfortably with each other.
Want to get a better deal? Contact Martha. Martha Spelman is a Los Angeles-based branding, marketing and strategy expert. Using traditional and online marketing to start and grow businesses, she works with startups, entrepreneurs and small- to medium-size companies. Martha is the author of The Cure for Blogophobia: How to Easily Create, Publish & Promote Your Business Blog.
Do you want a better deal? Contact Martha. Martha Spelman is a Los Angeles-based branding, marketing and strategy expert. Using traditional and online marketing to start and grow businesses, she works with startups, entrepreneurs and small- to medium-size companies. Martha is the author of the content marketing book: The Cure for Blogophobia: How to Easily Create, Publish & Promote Your Business Blog.