Earlier today I made one of the classic mistakes in any negotiation. I should have known better, but I was rushed and I hadn’t prepared properly and I fell for it!
I had been trying to get hold of a prospective new client for a few days without success and had all but given up when, unexpectedly they phoned me back. The discussion started well and I was able to do lots of fact finding to understand the problem that they wanted me to solve. Inevitably the conversation turned to money when they asked “How much do you charge?”
Now the wise response would have been to say something like, “That depends, what sort of budget do you have in mind?” Instead I fell for the sucker punch and immediately quoted a rate that was probably a little low. I knew it was a little low when they accepted it without hesitation. Damn, I could have certainly done better.
So it’s true even the most experienced negotiator can slip up if he hasn’t done his homework.
I should have got them to quote a budget because often they offer more than I thought they would. But even then, the wily negotiator will test this and say something like “you’ll have to do a little better than that”, in a neutral friendly tone.
Almost every time I have done this, I have got a better deal. So why didn’t I do it this time? What can we learn from my mistake?
- Do your homework first – Prepare your negotiation range. What rate would you really love? What rate would you be comfortable with? What is your bottom limit?
- Don’t be pressured into responding, just because they asked you a direct question doesn’t mean that you have to answer it immediately. Just smile and ask them what their budget is.
- When you do name a figure, ask for more than you’d be prepared to accept. Even if they offer to split the difference you are still going to walk out of the deal better off.
Now you might think that this is a bit hard but, when its coupled with the principle of happy happy outcomes you’ll see how both of you can be comfortable with the deal. More about this next week.
Good luck and remember to let me know how you get on.