5 Tips For Negotiating Rates
I’ve been spending a lot of time hiring musicians for an upcoming project, and I realized how hard it is for musicians to negotiate both a fair price that you can live with, while staying price competitive in your field. Here are 5 techniques to use to get the max money, while keeping your client happy.
1. Ask a lot of questions, and listen.
Listening is the most important negotiating step that a lot of negotiators miss. I’d recommend asking 5-10 thoughtful questions with follow up inquiries at the beginning of your negotiation. This will build trust with your client since they can tell you’re really listening and care about the project.
I recommend writing down a list of questions before you begin talking, and keeping the list with you when you’re talking with the client. Write it on paper, and you can write down follow up questions during the conversation.
2. Ask for the budget, even if it’s a ballpark estimate.
This gives you a negotiating starting place, and keeps from pricing yourself out of the gig. If your client won’t give you an answer, keep rephrasing the question until you get at least a suggestion of pricing. Try these phrases:
“What do you think would be a fair price for the work?”
“I’d love to get you the best deal I possibly can. What price (aside from free) would make you uber-happy?”
“I know I can get a price that will work for your project, if I can know a little bit more about where your target budget is.”
3. Figure out what you can add that no one else can, and use it as leverage.
Most restaurants rarely make a lot of money off of the main item that you order. They make most of their profits off of soda, fries, and desserts, which are relatively low cost but add a lot of value for the guest. If you have a skill that makes you stand out from the crowd, use it as an “add-on” to bump up your pay grade.
I’ve had gigs where I made 30% more money because I can play electronic drums and trigger Ableton Live. I know other musicians that take this to an extreme, bringing multiple instruments to gigs and even entire sound systems. Any added bonus skills can go a long way when a client is deciding between you and a competitor.
4. Go Ron Popeil on them.
Ron Popeil is still considered to be one of the greatest salesman in history (remember “set it and forget it”? He invented that phrase). His favorite negotiating technique has become legendary, and is now standard fair for all infomercials. You can use it, too.
Ron starts naming a price of how much the product or service is actually worth. This figure has to have a basis in reality, and has to correspond to how much value it is actually worth in the client’s mind. Then he walks back the price in stages. We’ve all seen it, “not $90, not $70. . . ). This works really well, especially if you do it with tact. Here’s an example of how I do it:
“I’m really interested in your project because XXX. I’m not going to lie to you- my rates are really high. I usually charge $XXXXX for clients (again, this has to be truthful). But here’s what I can do: because you are XXX, I’m going to drop it down quite a bit. I can do it for $XX. But you haven’t heard the best part: I figured out a way to bundle this and do XXX, so I was able to drop it even lower. This is a bit crazy, but I can get you this for $XXX if you can give me an answer by XX day.”
5. Set a deadline for when you’ll need to hear back.
Did you notice how the last tip had a deadline on the end of it? That’s because one of the most powerful negotiation techniques is a deadline. This offer is on the table for this long, and no longer.
This is important because it keeps you from having to nag or pressure a client for a response, and also creates a “kill switch” where you will get a definitive answer by a specific date. By moving on with a clear answer after a specific date, you’ll be able to move your focus to other tasks if they say no.