subject: Best Practices in Negotiation-How Much Do You Charge? [print this page]
There are Three T's in any negotiation: Text, Tone & Timing, which of course refer to What someone says, How they say it, and When they utter it.
Think of the Three T's as you would a rope that has fibers that spiral around and around, each supporting yet separate from each other.
Just this morning I received an email from someone interested in my writing and editing services. He asked, "What do you charge?"
Now, that's a completely fair question. But the TIMING of it is crucial.
If, for instance, it is asked at the end of an meaningful conversation, where a product or service has been explained and offered, then addressing price is completely appropriate, and intelligent. By asking how much we charge, our counterpart is expressing a buying signal, and is ready to calibrate price to promised performance.
"That seems reasonable," is what we hope the listener will conclude.
But what if price is broached before you've had a meaningful conversation, as it was in the email I received. What, then?
That rope I mentioned above has just become a noose dangling before you, a trap for the unwary, a threat. You do not want to step into it.
(1) It could be a competitor that is simply doing a little benchmarking or spy work
(2) It could be a competitor's client that wants to keep your foe honest, or to find some fodder to extract concessions in a negotiation.
(3) If it is a genuine prospect, he or she is simply asking a good question, but completely out of order.
(4) If you answer it, you'll err, because we cannot quote in a vacuum. "How much do I charge FOR WHAT?" is the true question.
(5) Answering it with a figure allows the inquirer to make his own judgment based on budgetary factors that may simply not apply. For instance, if you ask me what I charge for an hour of my time, the reply could be as high as ten or fifteen thousand dollars, if you want me in Europe or Brazil delivering a keynote speech to an important audience.
To write or edit a speech for someone else might be significantly less pricey, if only for the reason that I don't have to invest a business week in traveling to and from and being in a distant locale, so I can deliver that dynamic one-hour talk.
Be prepared to follow the "negative" that is price, with a "positive," a statement, taking the sting out of your quotation:
"The fee for your speech will be only $15,000, which is very reasonable considering my investment of more than a week's time in preparation and travel, substantial customizing and expertise, and my competitors' fees, which are generally 25-50% higher."
Remember this Best Practice in Negotiation: As a rule of thumb, you never want to state a price out of context. If you do, I assure you it will sound too expensive!
Best Practices in Negotiation-How Much Do You Charge?
