I just talked myself out of $600 with a brand new client by making a rookie negotiating mistake.  I should have known better, so I’m sharing the story with you so that hopefully YOU don’t make the same mistake I did.

Have you ever heard the term “negotiate against yourself?”

Essentially, it’s when you offer a lower price or offer to increase your service load for the original asking price.  It might go like this:

YOU: For everything you’ve listed in this package, it will cost $2,500 and I can get started right away.

THEM: Is that the best you can do?

YOU: Well, I could drop $200 off?

THEM: Okay, that would be great, thanks!

There’s nothing wrong with negotiating… and there’s nothing wrong with reducing your fee if you are still getting paid well and you’ll lose the gig otherwise (and don’t have any higher paying work lined up).

But in this case, the best response to “Is that the best you can do?” would have been, “What did you have in mind?”

This tosses the ball back into the other person’s court and gets them to tell YOU what THEY can afford.  (In the example above, YOU tell THEM what you’re willing to work for – a much weaker position.)

Unfortunately, this is one of the “better case” scenarios for negotiating against yourself.  The mistake I made is much, much worse.

During my initial client meeting where I discuss the specifics of the project I’m going to quote on and get a sense of initial budget, I asked my client-to-be what her budget was, or if she had any expectation of what it would cost for me to do the work we were discussing.

She admitted to not having a budget, but was anticipating about 10 hours and specifically mentioned my posted hourly rate of $150.  Essentially she had an expected budget of $1500.

I should also mention, she’d been referred to me by a client who has received a 25x return on her copy investment with me… and growing.  So she has a clear understanding of just how effective my copywriting is at generating sales.

Here’s where it gets ugly (for me).

I started off by telling her that I quote copywriting projects by the job, not by the hour.  If I’m afire with words flying out of my fingertips, I shouldn’t lose because of that.  Conversely, if I’m sitting in front of a blank screen, she shouldn’t have to pay for that.

I then told her that I’d spend a day or two thinking about everything and come back with an “all in” project price.

But ~ and here’s where I really messed up ~ I also told her that, in addition to definitely coming in below her expectations of budget (something I should have saved for the WOW moment to completely eliminate sticker shock) if my quoted price was too high, we could always look at removing certain elements (like the email copy she would send to her email list).

I suggested that she could probably do a passable job writing the email, based on my sales letter.

SAY WHAT?!? 😮

So, a couple of days later I sent my proposal for the sales letter and 6 emails (3 for her list and 3 for promotional partners).  And I quoted $1200.  (If you’re doing the math, that’s $300 less than her expected budget.)

Here’s the punchline.  I got an email back from her asking what it would cost to just do the sales letter and leave the emails until she’d run the campaign to her list once to generate some cash flow.

(Slaps own forward.)

Of course, all of this was my own doing, so I had no real option but to quote back a new price for the sales letter only… taking another $300 off, bringing the project to $900 and effectively reducing my fee by $600, down from a potential $1500!

Here’s what I should have done.

Once I found out her budget was $1500, I should have kept my mouth shut.

When I had the urge to tell her that we could potentially reduce my quote (which I hadn’t even given her yet) by removing some elements that she “could probably do herself” (hey, she’s coming to me specifically because she CAN’T do this herself!), I should have kept my mouth shut.

Then, I should have put together a proposal outlining everything I wanted to include… and I should have quoted her EXACTLY her expected budget but surprised her with “taxes included” to win the project.  (Tax here represents 12% of the final price.)

Had I done that, she might have balked and asked if we could bring the fee down any, at which point I could have asked what she had in mind and then removed items one at a time in order to get her where she needed to be on the price.

But more likely, she would have been thankful for me absorbing the 12% tax… and I would have walked away with a $1340 signed deal.

Here’s to both of us learning our lesson and NEVER making this mistake in the future.

Paul Keetch

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    2 replies to "How To Negotiate Your Fee (Or How I Talked Myself Out of $600)"

    • David Eagle

      Do you add 12% tax on tangible products only or do you also factor that as additional for coaching services as well? Do you need to be an LLC or other corporate entity to be able to charge tax on your services?

      – David

      • Paul Keetch

        Hi David, thanks for your question.

        While I am NOT a tax accountant, here’s my understanding. Tax on coaching (a service) is PST exempt, so I only charge GST, except in Provinces where there is an HST, in which case I charge that (as it’s a Federally collected tax).

        Also, I charge tax based on the physical location of the BUYER, not my own physical location.

        I am not LLC, but I do have a registered business under my name, and therefore have a Business Number and GST #.

        Hope this helps!
        Paul

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