Since starting this business, I've gotten a taste of what it's like to be the askee and the asker, simultaneously. Over and over and over again. This is because every time I meet a new client, we negotiate the rate.
I sooooo want to report things here in detail for your reference, but since some clients know about this blog (or could find out about it), I do not want them to know I've been writing about our transactions for an online audience. Even if I mask their identifying details. Sorry!
On the upside, looking back over a range of transactions since June (when I really jumped into this business full time) I am starting to see patterns and learn some important lessons about negotiating rates.
1. Asking to gain is harder than asking to save. Asking a client for compensation is a totally different beast than asking a merchant for a discount. My question: WHY??? Shouldn't it be easier, more natural and more logical to ask for a fair salary than to ask for 10% off of some overpriced gadget? I'll develop these thoughts in a separate blog post, but if you have any ideas why, please chime in below.
2. Be wary of preemptive excusers. People who say, before the negotiation phase: I'm on a budget/I've just spent $XXX,XXX and I have nothing left for you/My business is struggling/I have zero cash flow/etc. Sometimes these concerns should translate into a lower rate (see my final bullet point) but many times they should not.
3. Budgets are dictated by priorities. If someone is paying rent, paying insurance, having expensive lunches, paying for a nice car, paying enough staff members to include any idlers, and/or paying him/herself a salary, but claims there's no money to pay you, that's just bull.
4. People will respect you more if you charge more. I'd heard this platitude, and now I'm really understanding it. Crazy but true. (Yay.)
5. Price things with room for asking. This doesn't necessarily mean marking up prices, but also giving clients a range of choices. That way if they ask for a discount, you point them to the lower level of services.
6. Similar point: When reducing prices, reduce services. Someone can't afford the platimum package? No problem: tailor a package that works, but don't give away services for nothing.
7. There is a free lunch. For every client I've landed, I've put in countless hours of research, meetings, brainstorming and sometimes even rendered services -- for those clients, as well as for some I've missed out on. However, I don't consider those losses: Every bit of research strengthens my position, the next time a client comes around.
8. Really and truly give people value. I charge enough that I know I'm being compensated fairly, but I also throw in freebies, and I work more than the amount of hours I'm billing. It may sound like I'm contradicting myself -- lowering my hourly rate despite asking for fair compensation -- but it's not like I'm doing double the hours or something dramatic. Simply: I believe going above and beyond is the minimum necessary.
9. Ask ask ask (surprise, surprise, surprise). Ask others about prices, discounts, policies, compare your rates to others. Ask for input, advice, negotiation rehearsals. Trade info with supportive competitors. And make sure you're getting this info from a broad swath of people. Not just other 20-something women in the same city and industry.
10. New math: 50% of negotiation is research and 90% is attitude. Yes, that adds up to 140%. Because that extra 40% is the exhilaration of sealing the deal, baby! Bottom line: if you go in unsure of yourself, you'll be torn to shreds. No one says you have to show your fangs, but being self assured, and reminding yourself that you're at that negotiating table for a reason (the client likes you, wants your services, etc) goes a long way.
11. Don't forget what it's like to be an asker. By that I mean, to be on a budget, to want something but need someone's help (money, time, resources) getting it. I decided to always have one non-paying client, since... how could I not?
Tomorrow, I'm starting a course called She Negotiates. I mentioned it a few weeks ago, and I'm so excited. By the way, the teachers are offering a discount for anyone who mentions The Daily Asker: Early Bird Discount extended to signing up on any date. (http://shenegotiates.com)
I'll tell you how it goes, post my discoveries on this blog, and hopefully blossom into a more confident negotiator...