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Why discounting is negotiating with terrorists—and how to stop scope creep
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0:00I've been giving discounts to almost everyone who asks. Honestly, the people who haggle the hardest are always the most exhausting clients, and I'm running myself into the ground for less money. >> I mean, the obvious one is stop discounting. I call discounting negotiating with terrorists. As soon as you present a price and then you say, "I'll actually do it for less." You tell that customer in your first interaction, the most important interaction, which is that you are somebody who won, your word doesn't mean what it it's supposed to mean, and that everything you have in this business is negotiable. And as soon as that happens, guess what? Scope creeps. Because if I could negotiate on price, then it means that I can hit him up and beat him up for value later, which means I want you to do this, too, and I want you to do this, too, and I want you to do this, too. And so, you just have to hold the line, which is that you have done the math on your pricing, and this is the price that you're willing to do the service for.
0:48And that's because there's certain margin that you already discovered is what is required in order to run this business and grow it to reach whatever goals you have. Now, I want to tell you a secret, which is that when someone asks for a discount, it's actually a buying question. They've already usually made up their mind to buy, and now they're just trying to ask basically logistical questions of how good of a deal can I get. Give you an intangible one that you can use, which is if you have any kind of guarantee that you include with your product or service, at the lower price point, remove the guarantee. Say like, "Hey, at a thousand bucks, I guarantee the work. At 700, I don't have a satisfaction guarantee or a time-based guarantee." Talk about this entire process in my Money Bottles book.
1:18It's payment payment plan down sells. But either way, you're never selling the same thing to two different people for two different prices.