One Negotiation Skill That Will Save You Millions Of Dollars
Yuli Azarch | October 18, 2016 | No Comments on One Negotiation Skill That Will Save You Millions Of Dollars
Negotiation skills are very valuable because if you don’t negotiate things, you don’t really lower your price and you can be easily overpaying for things. If you’re doing any kind of business or you’re using any type of service worldwide or in your country, you probably could use some negotiation skills. Using this one trick can save you a bunch of money. No hype, no exaggeration. I think it’s worth millions of dollars. It’s that good.
I actually learned this from a business partner of mine. A few years ago, I wasn’t negotiating about anything. That’s when I noticed my business partner negotiating some things. He was lowering prices and getting to prices I didn’t think were possible. Let’s say we’re hiring a freelancer for our mutual business. It was supposed to be $1,000. Using negotiation skills, we’re now paying $500, literally 50% off. I was shocked. And to this day, I’m still shocked at the power of negotiations, and the power of prices, and how you can lower them using negotiations.
All this compounds and adds up. You can read about this trick in many books. You can learn the subject, and there are many things you can learn about it. But if there’s only one thing that you’ll do, literally one thing you should get in the habit of doing without learning anything else about negotiation, it will do the trick, and it will save you so much money it’s ridiculous. But it’s so easy, I don’t know why people aren’t using it. That’s the hard thing, to actually use it on a daily basis and get in the habit of doing it.
What is this one trick you’re wondering? It’s to ask. All you need to do is ask. Now think about it. Asking is completely free, 100% for free. It doesn’t cost you any money. It probably will take you 20 seconds to ask for a discount or to ask for a higher price from a client. Just ask one time. Worst case, someone will tell you no. That’s really the worst case. I’m not telling you to ask 10 times. Ask one time. Just get to the question, “Can I get a discount?” “Okay, what about the following prices, can I get a proposal?” It’s all about asking. It’s really nothing else.
I actually heard about a very cool challenge called the Coffee Challenge. I heard about it from Noah Kagan in an interview he did, and it’s a really cool challenge. The challenge is the following: For the next one or two weeks, all you need to do is ask for a discount wherever you go. If you’re a regular customer, it’s wherever you go for your coffee, wherever your regular parking place is. When you go to your regular coffee place, for example, even if the coffee costs $2, you’re actually going to ask for a discount. You can ask something like, “Hey, I’m a regular customer. Can I get a 10% discount?”
It sounds very ridiculous, but you’ll see how hard it is to do. What is hard is actually getting in the habit of asking. It can be good practice even if they say no. Sometimes they will say no, but most of the time, if you just ask, it will save you lots of money.
Obviously, you will be very surprised. All of a sudden the coffee place and the parking place will give you a discount. But this is small money. So if you save 10% on coffee, that’s nice, but if you get into the habit of asking, what if you do business? What if you pay someone $100 a month for a service and you’re using this service for a year? You get on the call and ask for a discount, and all of a sudden they agree and lower it to $80 a month. You save $20. So from one question, which probably took you half a minute, you save $20 a month. Twenty dollars a month is $240 a year. So if they agree, you would actually earn or save $240 in half a minute. Really, think of the ROI.
If you need something you’re probably going to use for the next 10 years, you save $2,400 along the way only from asking a question for half a minute. That’s all it takes. It’s so quick, and worst case, they say no.
What if you are actually paying higher amounts? When you’re doing business, you can do bigger transactions. If you get in the habit, the next time you get a 10% discount, it won’t be $0.20 for $1. It can be a $2,000 discount. All from asking, nothing else. If you don’t learn any more negotiation skills, all you need to do is ask, and you’ll see that amazingly you’ll get it. You’ll see it’s hard. It’s not very easy to ask. It was hard for me as well.
After I heard about the Coffee Challenge, I wanted to ask for discounts. Even to this day, sometimes I need to push myself, and I always do it just so I’ll get in the habit of asking. So even when I buy something for $5 in the market and I get a $1 discount, I’m building the habit up so next time when I’m doing a bigger transaction, it will feel much more natural when I ask for a discount without learning any further negotiation skills.
Let’s talk about a few more examples. Right now, in one business of mine, we are paying $1,500 to another company for services they give us. We buy licenses. We actually have been using them for years, but one year ago, we asked for 20% discount. We said, “Hey, guys, we’re a long term customer. We plan on staying and buying more licenses. Would you give us a 20% discount?” All we did was ask, and they said yes. And that’s it.
Since then we’ve had 20% discount. So this $1,500 could potentially be $2,000 if I would just ask. This is already $500 savings a month. In a year, it’s a $6,000 saving from an e-mail we sent to the company that took us 1 minute and that’s it. If we’re going to continue using it for 5 years, it’s a $30,000 savings from nothing but asking.
Another great example is a client I had that I gave monthly services. During the negotiation of the prices, I suggested a higher price. I didn’t go to my lowest price. The client said yes. It was just an extra $100 for me. But think about it, an extra $100 a month is an extra $1,200 a year.
This client has actually been using the services for 2 years, so I’ve earned $2,400 in those 2 years just from asking them 1 question. And he could have said no. Worst case, I get a lower price, but he said yes. What if he continues using this service for another two years? That’s another $2,400. The list can go on and on. It’s literally with everything, and really, it’s all about asking.
I’m going to repeat again and again this thing about asking because it sounds so simple but it’s not. It’s a bit more complex because it’s not easy to do it. It’s not easy to start asking for discounts. I know this as someone who gives services, but many times I see customers who don’t ask me for discounts.
I would give them, but they just say yes to the first price I give them. Others with good negotiation skills ask me to drop to the lowest price and ask for discounts. Obviously, every service is different. I’m not going to give a discount for everything. It depends on what we’re talking about. But in general, just ask. It’s free. The worst case is they tell you no.
But it’s really ridiculous how people are not using it. Nobody around me is using it. It’s simple to ask for a discount for a service. Most of the time, they’ll say yes. So for me, I don’t understand why people aren’t using it. I hope you’ll really start using it. Just get in the habit of asking for discounts.
You can actually learn about this subject. I recommend a great book that is “Secrets to Power Negotiating,” by Roger Dawson. After reading this, I improved my negotiation skills a lot, and right now, I’m a better negotiator than I was one year ago, obviously much better than two, three, and four years ago. I understood the power of it as a regular consumer as well, someone who pays for services, and someone who does business.
If you want to get more into the topic, you can. I see myself as a life learner of negotiation skills. I’m going to continue learning more about it. There are more tricks that you can easily do. After reading this book, I saw how people were doing tricks or strategies on me as well. It’s a great read. I highly recommend it.
But if you don’t want to get into it, don’t want to read the book, or don’t want to do anything, then just do one thing: start asking for discounts. It’s ridiculous the amount of money you can save. In the examples I gave you, I saved $500 more, $200 more here, $20 there. Before I noticed it, it kept piling up, and in a year, I saved thousands and thousands of dollars.
Many times, your services are for 5 to 10 years or more, so it adds up. Add up tens of thousands of dollars each year, and slowly we’ll see how you’ll get to a million dollars of savings whether over a lifetime or 10 years, depending on the amount of deals you do. That’s how you can get to it. Because people can see they saved $10, but that $10 is $120 a year, and in 10 years, that’s $1,200.
Again, this can be done for every single thing. It doesn’t have to be business related, but especially if you do business or if you’re getting services from people like freelancers. But what if you actually paid the TV bill, the air conditioner bill, the electricity bill, the water bill, or the regular bills you’re all paying? What if you’re able to get discounts on those, something you’re paying for the next 5 to 10 years? So even that $10 or $20 that you can get a discount from a 2-minute call or 1-minute question from e-mail, it can save you so much money.
There are many more specific scripts you can do to ask for discounts, but I don’t want to get into it. I want to keep it really simple. So if you use one thing and take only one thing from this video, it would be to ask. It’s free to ask, and the worst case is they say no.
As an action step, try the Coffee Challenge. Maybe think of some of the places you usually go, and ask for discounts. Or maybe just call some of the services you’re already using right now, and ask for a discount. Get in the habit of doing it. I think it’s a great practice.
I hope you enjoyed this, and would love to hear your comments below.