I sent the following email to a popular exercise instructor on Youtube. His website had a page listing his hourly rates for training and educational services. His company thanked me for the email and said they’d make my recommended changes immediately.
The thought process in the email is applicable to any instance where the interests and values of stakeholders is uncertain. In life and business, we want to create informational asymmetries, situations where we have more knowledge about the participants and rules of engagement than everyone else.
Business isn’t Blackjack; there are no rules dictating how you play the hand you’re dealt.
Turn that sucka face down..
Life is a series of negotiations, some more subtle than others. Revealing your bargaining position prematurely is an inferior strategy: don’t lie about your interests during a negotiation, but don’t rush to volunteer information either. Self-disclosure is one of the keys to building strong relationships in your personal life. but it can really do a number on your competitive standing elsewhere.
When faced with a complex situation, play it close to the vest. There are other ways to get to “win-win” without placing yourself on the front lines.
The e-mail starts below…..
I stumbled onto your youtube channel today; it’s excellent. Your blog doesn’t disappoint, either.
I have a suggestion for your ‘speaking’ page that should help you land more gigs—at a higher rate.
Don’t broadcast your hourly rates on your page.
You’re fine with a general “If you’d like to hire me….contact me” statement on that ‘speaking’ page. Once they contact you, you can lay out the parameters of your employment.
Displaying your rates cedes a ton of negotiating leverage on your gigs.
There will be some people who cannot afford your rates (or choose not to afford them). There’s not too much you can do here. If you quote ’em a rate and it’s truly out of their range, you can adjust accordingly or just pass on the job ; with your stated hourly rate you would’ve lost them anyway.
Where you are hurt the most is with the other contingent of prospective buyers—people/companies with the willingness and the resources to pay you.
You’ll find that many of the companies that might hire you would be willing to pay you significantly more than your stated $300 hourly rate. They’ve got sizable budgets that allocate money for pertinent resources (e.g. team-building or a health seminar for some fortune 1000 company). With the right negotiating plan, you could land increased pay for the service you already provide—without doing a lick of extra work.
Of course, you will never know how much you could have received because your cards are already laid out on the table; your rates/expenses are there for everyone to see.
Bye, bye negotiating leverage….
I’d also suggest you start quoting a daily or weekly rate, instead of an hourly one. That sort of proposal framing is much easier to stomach for most people and leads to less clock-watching for both parties than an hourly amount. Something like “my daily rate is $1600 plus travel/lodging expense and you’d have me for up to five hours”. Odds are you don’t spend up to five or six hours at a stretch teaching a seminar, so it’s feasible for you. You could always adjust the numbers.
Fortunately, the most important part of your business is rock-solid, your expertise. You’ve got a gift for explanation and practice of good fitness fundamentals; No reason you can’t maximize it.
I enjoy creating strategies to solve problems in competition and social settings, so your blog is right up my alley.
Thanks for reading my email. I look forward to hearing from you.