If you are anything like me, you probably get really uncomfortable asking for favors or a concession in costs from anyone and avoid it was much as you can.
Unfortunately for me, yesterday my boss insisted that I negotiate the rates with a training organization for training some of the employees in my company. I was in a soup. I could see how the conversation would end with them refusing point blank, and my boss considering me a failure. (Catastrophizing?)
It left me feeling angry with him, because it was so much easier for him to do it. He can always get his way with people. Then why trouble me? Anyway, I am glad now that he left it to me 😀 Once in a while I think I need to get pushed into the waters. Only then I bother learning how to swim 😛
So here I have detailed what I learnt about how to negotiate prices, may be it will help some of you too. May be you will think it is all wrong, I would appreciate if you correct me then!
How I prepared:
1. I googled, “How to negotiate for a lower price.” You know me 😀 ….. But there are quite a few good articles out there. What I learnt from those?
i. Don’t underestimate your power as the buyer. You have the right to demand a lower price.
ii. They are used to people negotiating with them, so don’t be embarrassed. Be shameless and ask for shamelessly low prices
iii. On the same lines, always quote lower than the price you want, because they are going to try and reach a midway price.
iv. Show that you are interested in buying but also give a reason for hesitation, which makes them want to take that extra effort to keep you in the deal.
v. One interesting tip that I did not get to use – If both fall silent during the negotiation, let him fill the silence, because he will end up blurting out a reason why he won’t reduce the rates or he may end up giving in to fill the uncomfortable silence (sly this one, I know! Poor fellow)
2. Next, I made a list of reasons why we should get a lower price.
i. We would be sending more number of employees for training
ii. We are sending our applications early, so we should get the early bird benefit (so said my boss)
iii. We have already sent employees for training in the past and since this is useful for us, we would be regular clients
3. The above point helps us to convince ourselves that we deserve the price discount. That brings me to the next step, which is keep yourself in the right state of mind. Yes. The state of mind that you really need the discount and you deserve it and it would be unfair of him to suggest that there won’t be a discount. It comes through when you talk.
4. Go ahead and call!
So below I tried to recollect my conversation and note it down. Not all of the above points helped. But the process helped me to speak confidently, which I think helped me sound authoritative.
Me: Hello? Sir, is this Mr. Peter*?
Peter: Yes, Speaking
Me: Sir, this is Radhika* from AAA* Inspectors Ltd.
Peter: Yes, Radhika!
Me: Sir, if you remember, we had sent 2 inspectors to the symposium you had arranged last month
Peter: Yes yes, I remember
Me: Sir, some days ago I got another email from XYZ* about a training on painting and coating inspection. We are very much interested in that course as we have many inspectors
Peter: (interrupted) Yes, I know a large base of inspectors!
Me: Exactly sir, and we would definitely like to give them this training. But I wanted to know if it is possible to get a concession in fees? Then I will be able to arrange for more number of inspectors to attend the training.
Peter: A concession in fees can be made. How many inspectors will be attending?
Me: about 8 may be.
Peter: Oh wow, 8 is a lot. May be we can give a concession of upto 10%.
Me: 10%? Ok ok that’s great! (writes down on a piece of paper). Sir, I also wanted to know, if we are able to increase the number of inspectors still further will there be any more concession?
Peter: uhhh, Radhika see, world wide recognized course like ABC cost as much as Rs. 90,000. And we are charging only Rs. 18,000 even though our course is much better than theirs. We must start giving value to good courses conducted in India.
Me: Yes sir, I agree that this is the scenario today. In fact, even here the fact that this course is not recognized among our clients like ABC’s courses was cause for some hesitation
Peter: but Radhika, even though ABC is more recognized you will see, people trained by them don’t really know so much. Whereas our course is definitely more value adding. ABC is keeping a high rate solely on the basis of the value attached to their name. Whereas we are losing on the profit margin. We are providing course material like notes and CDs too as take away. There is very little scope for cost reduction.
Me: (after listening intently) Yes definitely sir, we have a lot of faith in your trainers, which is why we are trying to send maximum of our inspectors for this training.
Peter: (Interrupted again) Ok, let me see ….. if 10 inspectors will attend, we will decrease cost from 18,000 per head to 15,000 per head.
Me: Oh ok sir, that would be brilliant! Thank you so much sir!
Peter: you are welcome dear
Me: Sir, can you send an email or something confirming the cost?
Peter: Just go ahead and send the amount with the filled up forms. I will endorse it don’t worry!
Me: Ok sir, thank you, thanks a lot !!! 🙂
And that is how I successfully managed to reduce the rates for my company and keep my boss happy 😀 …… Do you think this was a result of my preparation? Or just beginner’s luck? Is beginner’s luck a real thing? I have had many instances for sure, but that discussion would be for a different post.
One mistake I made, that one should avoid: I should have been aware of what price I wanted to bargain to. Oh yes, that’s obvious. But my boss only asked me to negotiate the price. He didn’t tell me negotiate to what price. So if the man had asked me what was the price I would like it for, I would have been clueless. Heehee.
Is the above advice correct? I would certainly like feedback on whether all my better experienced readers agree with what I have written or they think this is plain bull shit 😀
Thanks for reading, hope you found it helpful. Good day! 🙂
* Name changed to protect identity 😉
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