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