This is a true story. Only names have been changed.
Nannette had enjoyed a highly successful career as a very innovative management trainer with a national retailer.
She decided to go on her own and used her own funds to advertise her training workshops. Her first workshop was attended by 45 people so she doubled the price and advertised again. This time only three people booked. Eventually she discovered a price in between the first price and second price and regularly attracted between 30 and 40 people to each workshop.
After two years she was approached by Stuart Little the HR director of a brick and tile manufacturing company with ten branches who had attended one of her workshops. He asked her to train the management of the ten branches.
They agreed that the management teams of each of the branches would attend three two-day training workshops one month apart and that she would agree the implementation of the knowledge and skills taught to be completed between workshops with participants and that this implementation would be monitored by the HR Division.
When Stuart asked Nannette how much she wanted he warned her that as this was her first in-company training programme she should not quote too high.
She explained that she had significant experience in conducting in-company training for her previous employer and quoted what she thought to be a realistic price.
Stuart Little said that having attended her workshop and being aware of the excellent material she had developed together with her winning personality he was certain that she would in future get some very big contracts with many companies. He was offering her this opportunity to establish her reputation. He also mentioned that she might be sent to the States to conduct training there if the programme was as successful as he anticipated. For this reason she should settle for what in her eyes was a ridiculously low price. (Sell cheap and get famous).
Having been coached by Negotiations World she restated what the programme was worth repeating the unique benefits her programme offered and compared the price with other commercial training companies and politely repeated her demand for the price.
After negotiating she was able to increase the tailoring of the training programme to suit the company and retain the price she originally specified.
The Lesson
- Know the value of your offering.
- Study your opposition to learn what is ‘unique’ about your product or service.
- Don’t ever get caught by this legendary dirty trick.
- If it is used against you, restate the benefits for the buyer and explain what your competitors offer to give evidence your price is realistic. Always get the best advice from a negotiations coach before you approach a potential client.