Thread by @minethatdata

You charge $35,000 for a project. Possible client says they will only pay $20,000 for the project. You say NO. Possible client walks away. Did you make a mistake?

Ok, the responses are interesting. Take a look at the vote, and then take a look at the responses. Then come back to my comments.

1 - My first year of consulting was 2007. I was maybe 3 months into my tenure, and the CEO of a $500,000,000 business is on the phone. The project cost is $20,000. He thinks this is a stupid amount of money to charge for project work. He asks me to adjust the price.

2 - I tell him I don't do that. He tells is me it is "customary" for vendors and consultants to provide deep discounts to earn business.

I don't respond.

He says "I ask you again, how much is the cost of this project?"

3 - I tell him that the cost of the project is $20,000 ... I tell him that I do not adjust the price of my projects (I've been in business for 3-4 months), that my work stands for itself.

The phone is quiet for a good ten or fifteen seconds (or so it felt that long).

4 - Then the CEO says "Ok, let's go with $20,000".

5 - Lesson #1 = Charge a fair price, and hold firm.

Lesson #2 = Know your industry. Know that your price is fair (and is likely more fair than what your competition charges).

Lesson #3 = Be confident ... don't waver.

6 - Lesson #4 = Use scope devaluation (i.e. I'll do 40% of the work for 40% of the cost) as a threat. That's not a viable business model, but it is a viable negotiating technique.

7 - Lesson #5 = Structure your project work so that the client "needs you". The more the client needs your unique skill set, the more you can charge.

8 - Lesson #6 = Be willing to walk away (if you can afford to).

9 - When you negotiate your price lower than what you list, potential clients talk. You devalue all future work because Client X tells Client Y that you charge 40% less than what your list price is. You hurt future revenue. You become JCP or Macy's. You don't want to be them, ok?