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Negotiating Strategies when Pricing Services

July 14th, 2006

Last week I posted on pricing your services, and then I promised you I would tell you about a different school of thought when it comes to establishing prices and negotiating the best price when selling your services.

This post is offered only as a differing opinion, it is NOT the philosophy I subscribe to when it comes to pricing.

My clients often end up booking a presentation a year or two in advance in order to secure the date they want. There is a strategy behind this that I want to encourage. Others disagree, including a good friend of mine.

My friend suggested that when they book far in advance you should quote a higher fee since it takes greater risk for you. That is, you have no idea what wonderful opportunities might arise in the future that you would have to pass up in order to honor this commitment. As the date gets closer, he suggested you could start lowering your price, until if they call the week before and you don’t have anything planned, you might offer a deep discount just to keep from sitting at home doing nothing.

Sorry. When I occasionally get a day or even better (and even more rare) a group of days with nothing booked, it is a welcomed respite. I love to perform, but I also love having time off to spend with my family. If anything, I would RAISE my prices if they call at the last minute!

In fact, I would tend to be more obliged to give a discount for future bookings (I don’t however), but I would sooner give a discount than charge a premium. Why?

Because, when clients book in advance it sets a precedent for other clients to follow. It provides a sense of security for my family. It means I am working with a client who is organized and prepared, not scampering about at the last minute. That almost always means fewer headaches for me.

Having clients book a year or two in advance also eliminates a certain level of advertising and marketing that would otherwise have to be invested to fill those dates. For example, this summer I booked 81 presentations without sending out a single direct mail piece, making a single out-bound telephone call, or in any other way marketing the program. Just repeats, and word of mouth.

That is a significant savings on marketing and advertising expense.

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