the fundamentals of price negotiation video 1: introduction
TRANSCRIPT
THE FUNDAMENTALS OF PRICE NEGOTIATION
Video 1: Introduction
“How to stop discounting, eliminate stress, and get better relationships with your
clients.”
Video 1: Introduction
Exercise
Video 1: Introduction
• You are talking to a new client, Tom.• Bureaucratic delays, no signed contract.• The project deadlines can’t be changed.• You start your engagement without a
contract.• “About that contract… I was hoping you
could give us a discount.”
IMAGINE THE FOLLOWING SCENARIO
Video 1: Introduction
• Pause the video.• Take a minute, and write down in front
of you your response to that question.
BEFORE MOVING FORWARD
Video 1: Introduction
OUTLINE
1. DIAGNOSIS2. DETACHMENT3. CURIOSITY4. ABUNDANCE5. HOW TO SAY NO
Video 1: Introduction
• Why is dealing with a request for a discount hard?
• Because we are doing it all wrong.
DIAGNOSIS – CENTRAL QUESTION
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
THE MISTAKE WE MAKE
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
PUSHBACK
• Say no.• Justify.• Make
excuses.
GIVE IN
• Say yes.• Say no, but give in
on something else.
• Say yes under certain conditions.
CATCH - 22
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
PUSHBACK GIVE IN
Need
FAULTY ASSUMPTIONS
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
Need
Discount
Budget, look good, savings, cash flow, unfair price, etc.
There are many reasons why people ask for a discount…
• Deferring payment.• Looking for creative financing options.• Do things that might make them look good.• Educating them on what is or isn’t fair.
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
Negotiating price is actually really simple.
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
They ask for a discount for different reasons, we can address those reasons without pushing back or giving in.
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
Emotional response
Forces us to either pushback or give in.
It’s the modern day equivalent of a fight or flight response.
• We generally know what we should be doing.
• We just don’t do it when negotiating price.
CENTRAL CHALLENGE / BAD NEWS
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
• Attachment• Certainty• Scarcity
3 MINDSETS
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
• When we put an offer on the table we become overly emotionally attached to it.
• Problem solving doesn’t happen.
ATTACHMENT
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
• We become emotionally certain that we know why they are asking for a discount.
• Problem solving generally doesn’t happen.
CERTAINTY
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
• We see the situation as win-lose.
• If we assume someone will lose, pushing back or giving in makes total intuitive sense.
SCARCITY
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
• As long as you are thinking in terms of certainty, attachment, and scarcity, negotiating price is ALWAYS going to be hard.
CENTRAL CHALLENGE / BAD NEWS
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
Attachment
THE WAY OUT
CertaintyScarcity
DetachmentCuriosityAbundance
• Being able to attain distance from your price, emotional distance, so that you can talk about it in a more relaxed way.
DETACHMENT
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
• We have to assume that we don’t know why they are asking for a discount.
• Our gut reaction is always going to be a question.
• Problem solving becomes possible.
CURIOSITY
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
• There are an abundant number of options that you could agree to, not just one of two prices.
ABUNDANCE
Diagnosis - DETACHMENT - CURIOSITY - ABUNDANCE - HOW TO SAY NO
Next video:
Two essential concepts that you need to be aware of if you want to remain emotionally detached and
in control.
Video # 2: detachment