“You’ll never know if you don’t ask.” - Unknown
One day I decided to contact a company selling 900#s as a business opportunity. No, I wasn’t going to use it to sell any of the services 900 numbers were commonly known for in the late 80s and early 90s. I was going to use the number to offer marketing coaching services. Good idea? I certainly thought so.
Anyway, with a list of companies selling 900# services in hand, I picked up the phone and started on what turned out to be a short search. You see, seconds later, I was on the phone with a rep for one of the companies on my list. He asked me a few questions and then launched into his presentation. It sounded as if he was reading a script! After he was finished, I quickly asked about the investment required to start.
“$3,000 upfront and a portion of the per minute charge,” he said. I immediately responded with a tone of disapproval and shock. “$3,000 upfront and portion of the per minute charge?” He rapidly reiterated some key “selling” points from his presentation. However, I wasn’t moved!
Since I understood how this particular company earned its money and I knew the amount required to start, I quickly decided what I wanted, and began to state my case.
“Listen, it appears that your company will earn a considerable amount of money off the per minute charge. Therefore, the more your customers use your service, the more money you earn over time. Right?” The rep responded in the positive. I continued. “In order for me to attract clients, I will need to market my number by advertising in the newspapers and business journals in my city. In order for me to get a rate that makes sense, I will have to commit to a multiple run agreement. So I’m looking at spending about $2,000 per month. Bottom line is, if I give you $3,000 upfront, I’ll have less money to invest in marketing my number.”
Undoubtedly, you’ve probably already guessed that I didn’t agree to pay $3,000. Therefore, I’m curious to know what amount you believe I was able to negotiate. If you guess correctly, I’ll send you copy of an interview I conducted with a gentleman who negotiates multi-million dollar contracts on a daily basis. Enter your guess in the comment section below. Hope you win!
Bottom line — Often times it doesn’t occur to people to ask themselves the question: “Are there other ways to give someone what they want, so that they’re willing to give me what I want in return?” Most negotiations that end with a “win/win” begin with the preceeding question.
With your success in mind,
Ron
P.S. I will reveal the answer on my radio show, Immediate Influence next Monday night at 6:30pm PT, 8:30pm CT, 9:30pm ET.
My guess is this. In theory, the upfront cost, if you have the decision makers open minded attention, IMO, should be negotiated down to zero…but to get to that, you would have to give up more on the fee per minute, so the close is simple…at some point in the formula of upfront & per call vs. just per call, you can show of it’s much more profitable for them to have a bigger piece of what you do. It really just depends on how open minded someone is in working with you. If I’m on the same side as the other person…help me make money, and I help you, and there is true communication, trust, etc. then anything can be negotiated. for instance…a Over/under line … under this many minutes it’s this much, but once over, the cost per minute to me goes down. The attitude that I am the golden goose, is life better with or without me.
So, in my opinion, salespeople should be some of the easiest closes to make, especially if what you do for them makes them more money if you are more successful. Sincerely,
brucebski
P.S. That’s a long way to go when I could of just said 0.
The tipping point. At what point does it make more sense for them to have a piece of your action then to have a big upfront cost?
Great story – I can’t wait to hear your radio program and learn the answer!
I want to agree with Bruce and say 0, but for the sake of contrariness, I’ll say $500. Enough to show you’re serious and capable of spending $2,000/month but not so much to use a material portion of your funds.
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Hi James!
I actually forgot to reveal the answer on my show last night. Are you ready for it? $150!
Warmly,
Ron
Bruce,
You were close. I negotiated the fee down $150. However, I wasn’t asked to pay a higher per minute rate to the company. Fascinating?
Thanks for stopping by and adding your comment!
Warmly,
Ron