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When Negotiating – Make The First Offer

Here’s some useful research: when negotiating it’s best to name your price first – it sets an anchor around which negotiation begins. Let your negotiating partner name a low price first, and it brings your price down.

This is mirrored in research on anchoring and credit cards – basically the first price mentioned influences what comes after. So this is one of the reasons you may want to name a price for your consultancy, even if you do the classic “Normally I would charge $102,000, but because <insert reason here> I’m happy to do it for <insert smaller number>”. You’re starting with a number around which the price will revolve, and it will be generally higher than the price the client will begin with.

See Robert Cialdini’s recent book on Pre-suasion for more useful tips on this.

Although do remember my friend Barry’s experience: he came to one of my talks in Brisbane years ago, where I suggested the “special price” tactic just mentioned. He got as far as “Normally I would charge $1000…” and the client said “that sounds fine”. Upped his price from that day onwards (always wondering what price he could have charged!!).

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