Jedi Mind Tricks: How to Get $250,000 of Advertising for $10,000

126 Comments

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These are not the prices I’m looking for. (Photo: hellochris)

Let us never negotiate out of fear. But let us never fear to negotiate.
-John F. Kennedy

In December 2008, well-known marketing consultant John Jantsch asked me what my small business predictions were for 2009. This was my answer:

2009 will be the year for small businesses to get advertising at 70-90% off. Recessions mean budget cuts for larger corporations, which means advertising cancellations, just as in the “dot-com depression” of 2001 and 2002. There will be fire sales on remnant advertising, whether print, TV, radio, or online. In 2002, I bought $250,000+ of radio advertising for $10,000 because a big pharma advertiser pulled out a week before the ads were to go live. If you play your cards right, you can cut your CPA (cost-per-acquisition) in half.

The following sample dialogue demonstrates exactly how someone can buy $250,000+ of media for $10,000, and how you can reap the rewards of an advertising collapse.

If you’d rather acquire profitable customers for pennies instead of dollars, this article is for you…

Jedi Minds Tricks: How to Get $250,000 of Advertising for $10,000

Life is not fair. For those who understand the few rules that matter in negotiation, this is good news—it’s possible to get much more than others expect to offer you.

Negotiating is, for most, an uncomfortable attempt at impromptu haggling. For the experienced “dealmaker”, a more useful term, it is a planned sequence of predictable objections and responses that can be orchestrated to produce the desired outcome. It’s like planning three or four moves ahead in chess, forcing an opponent to put themselves in check-mate.

Some of the most effective strategies and set-ups are illustrated in the following sample dialogue for a print advertisement. The dealmaker (D) in question has planned the entire sequence and all questions in advance.

Note: Even if you don’t practice all of these common gambits, some of which can end up being games of mutual make-believe, it is important to recognize them or you cannot counter them.

To preserve the flow of the dialogue and its usefulness as a template, the principles are put in parentheses ( ) when used and then explained at the end of the article. I have used three of them alone (1, 5, and 7) to get more than $250,000 of radio advertising on 150+ stations for $10,000, $20,000 full-page print advertisements for less than $4,000, and 50% off of car purchases, among others.

Negotiating is predictable and learnable. Simple phrases and questions can be used over and over again to reap huge dividends.

Practice small, practice often, and view it as a game—it’s a game worth winning.

First introductory call:

D: “Hi, may I speak with someone about advertising in your magazine?” (Transfer to Cheryl) “Hi, Cheryl, my name is _______ and I’m Director of Marketing at ________ Company. We’re considering advertising with you but are also looking at [competing magazine A] and [competing magazine B]. When does the next issue close and go to print? Can you please e-mail me your rate card and current discounts?”

June 20th at 3:30pm (1):

D: “Hi, Cheryl, we’re deciding today which magazine we’re going with. You’re competing against [competing magazines] and we can only choose one. We’re looking to do a full 12-month roll-out but are doing a one- or two-month test first. What is the best price you can offer on a full-page four-color ad?” (2)

Cheryl: “Hmmm… well, I suppose we could do $2,500.”

D: “$2,500?!! Yikes…” (3)
(or “$2,500?!! Wow. Based on the other mags, I was expecting a lot less…”)

30 seconds of excruciating silence later:

Cheryl: “Uh…It’s possible we could go as low as $2,300, but I’d have to speak with my boss.”

D: “What else could you add to that? Could we write a product review, add in a 1/6th-page ad, a classified? Perhaps we could get a one-time mailing to your subscriber mailing list? It’s important that we make this first time a homerun.” (4)

Cheryl: “I’d have to check.”

D: “OK, well I need to get on the phone with my board [partner, supervisor, etc.] in 15 minutes. I’ll tell you now that $2,300 isn’t very competitive. Can you call me in ten after speaking with your boss?” (5)

10 minutes later:

Cheryl: “We can do $1,850 but just this once. I can also give you a product review of 300 words and a classified.”

D: “Is that really the best you can do?” (2)

Cheryl: “I think so.”

D: “I have authorization right now to pay $1,200 (6), but I’d need to go through my [superior of some type] otherwise. Can you ask your boss now if we can do that?”

Two minutes later:

Cheryl: “She said that we can do $1,500.”

D: “I have to speak with my [superior]. I’ll call you back in five minutes.”

Five minutes later:

D: “Hi, Cheryl. Here’s the situation. I have them on the other line and they want to decide on one magazine now. I want to go with you guys but you’re higher than the other two competitors. We’re not that far apart here. If we can just split the difference and do $1,350, I can fax you the insertion order now and have a check FedEx’d overnight to arrive at your desk tomorrow morning. I have 20 minutes before FedEx closes. Can we split the difference to $1,350 and I’ll get the check off? Let’s just do it and call it a day.”

Cheryl: (after a pause and speaking with someone in the office) “OK, $1,350 it is. Where should I send the insertion order?”

That is how a hypothetical dealmaker gets a $5,000 package for $1,350. How $5,000? In addition to the main full-page ad, he or she secured a 1/2-page product review worth at least $1,500 and a classified ad worth $500, bringing the total package value to $5,000, purchased at 73% off.

Here are the principles in order used:

Principle 1: Negotiate just prior to the other side’s deadlines. If purchasing advertising, find out when the space or air time must be filled and negotiate last minute. No one will sell you hard goods such tractors for $5 to get rid of them, but this happens all the time with ad space, as it is worth $0 if not filled. It expires like food products on a shelf. The same approach can be used for cars if you find out when new models come in or when sales quotas are calculated. In this dialogue, assuming the deadline for ad submission is June 30th and the rate card for a full-page ad is $3,000, the follow-up call is around June 20th at around 3:30pm your time (just prior to FedEx drop-off deadlines).

Principle 2: Make them negotiate against themselves. Give them multiple chances to lower their own price before making an offering yourself. People will often offer less than you were planning to ask for.

Principle 3: Use a “flinch” whenever someone mentions their first discounted offer. Recoil in shock and then be silent. DO NOT speak, even if the other side says nothing for minutes (I often check e-mail during this battle of wills). The tension is uncomfortable, and the salesperson usually fills this void with a concession.

Principle 4: Increase value while lowering price. Ask for bonuses as you negotiate on the original dollar amount. Most people across the negotiating table let these slip while too focused on negotiating a single price. Our goal is to get the most advertising per dollar, so add to the package as you cut price. This also gives you items to later concede or remove for further discounts.

Principle 5: Never be the ultimate decision maker. Having partners or superiors, often imagined, with veto power allows you to negotiate hard and make impossible demands without being viewed as a bastard and damaging the ongoing relationship with the other side. This is the same reason business people perfectly capable of negotiating their own deals use lawyers as go-betweens: to blame points of disagreement on “legal” and create a non-hostile bargaining environment where egos don’t collide.

Principle 6: Use intelligent “bracketing.”
If the list price is $2,000 and I want to pay $1,500, for example, I’ll offer $1,000, creating a $500 buffer on either side of the target price. The other side will offer $1,750, I’ll compromise at $1,250, and then we’ll settle at $1,500. “Let’s just split the difference” creates the illusion that they are getting a concession from us when, in fact, it was all pre-planned.

Principle 7: Practice using the “firm offer.” This is when, rather than asking the non-committal “Can you do $___?” you make an if-then commitment such as “If you can do $____, we will pay you now.” The latter is an offer of payment rather than idle haggling. To circumvent this entire phone conversation, it is possible to use a pre-emptive firm offer and send an e-mail stating that you are prepared to immediately pre-purchase one ad—whether full-page, half-page, or 1/3rd-page; whichever they prefer—at 30% or 40% of rate card. To make this “firm offer” even harder to resist, FedEx them three signed checks for 30% of each of those ad sizes and tell them to cash one, whichever preferred, or rip them all up.

Negotiate once per item (whether a one-page ad or a 12-month radio campaign) and do it hard.

Once a price is agreed upon, do not renegotiate the price again. Be tough as hell but be fair. A deal is a deal.

Here are a few other tips for purchasing media:

1. If dealing with national magazines, consider using a print or “remnant ad” buying agency such as Manhattan Media or Novus Media that specializes in negotiating discounted pricing of up to 90% off rate card. Feel free to negotiate still lower using them as a go-between.

2. Ask for a 15% “mail-order discount” or “first-time advertiser discount”.

3. Ask for a discount for paying upfront vs. net-30 or ask for the standard 2% discount for paying net-10 instead of net-30. This can often be negotiated with their accounting after settling on the ad price with a sales rep.

4. Once you have strong cash-flow and know ads in a certain magazine are consistently profitable, offer to pre-pay 3-12 issues at a time for an additional 30-40% off. Don’t ask—make a firm offer to show that it’s not window shopping.

Posted on: February 19, 2009.

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126 comments on “Jedi Mind Tricks: How to Get $250,000 of Advertising for $10,000

  1. This is priceless! I am so self-conscious when I try to negotiate (like I’m being cheeky or cheap). It is useful to have it spelled out as a process or a formula in this way. It makes it much more concrete, which I am sure will alleviate some of my reticence.

    Thanks!

    Adam

    Like

  2. This is my first comment ever to you Tim.

    Your book and blog posts have caused a positive change in mindset for me. Because of your teachings, I now work smarter instead of harder.

    I am an entrepreneur and still work ridiculous hours even after reading your literature; however, my quality of life has significantly improved. I now spend the same amount of hours working each day, but focus on the important aspects of my company so that we have the highest chance of succeeding possible.

    I am going to use these tips on negotiation above this week to optimize our advertising campaign.

    I hope to cross paths some day

    – Jun Loayza

    Like

  3. On a different scale, this sort of negotiating happens on a daily basis in most Asian markets and stores. I remember my mum purchasing fish, vegetables and other daily necessities in a street side market using exactly these techniques.

    There are cultural aspects to consider – for example, most Chinese shopkeepers have a belief that the first person who walks into their store when they open _has_ to make a purchase in order for the rest of the day to be prosperous. I once got a $200 pair of shoes for about $80 in Singapore because I was the first one who walked in when he opened his doors.

    Like

  4. Wow Tim, thanks. I guess it happens so naturally if you know what you’re doing.
    Many of these tactics I haven’t considered before, like waiting for a deadline for example, sounds like a very good one and easy to implement.

    Thanks for sharing. Great Post!

    p.s. I guess great minds do think alike, I just released a free report on how to get $3,500 worth of Advanced Marketing Education for $5. Smaller numbers but very similar idea :)

    Like

  5. Thank you for everything Tim.

    We’ve been using your book as a bible for our business since we first borrowed it at the library (After reading it essentially overnight we had our own copy on its way from Amazon). The economy downturn has had major effects on our pocket book, but your book has saved us from otherwise going belly-up.

    I’ve been using your negotiation techniques as outlined in your book and PDF for the last year (for those wondering, essentially the same info as above). Saved us thousands of dollars. In one case negotiated a full page ad listed as $24,000 for $6,300. And this is just one example!

    I’ve been recommending your book to anyone who will listen (and not dismiss it as some sort of scam). So far, everyone who has read it has noted major improvements in one area or other of their business which in turn meant major improvements in their life.

    Cheers from Canada,

    Eric

    Like

  6. What happens when you are on the wrong end of that deal?

    This is great practice for those needing exposure in major media outlets. Smaller companies cannot fork over the capital needed to get full blown coverage. Getting to them before deadline is key and may be something you need to do a month or 2 in advance to begin to leverage yourself.

    Great stuff Tim.

    Like

  7. Fantastic article.

    I am not a very good negotiator so these little hints will hopefully help make me a more savy negotiator.

    My wife and I own a small business and are working hard at making it not just a “mom and pop” but something much bigger.

    Thank you very much for your advice and I will look forward to future articles.

    Dave

    Like

  8. I have to agree with @Jun’s previous comment.

    Tim, your work has had a dramatic effect on the way I think about my work/life balance and I can’t thank you enough.

    Everyone around me has noticed a change in the way I handle everyday situations, and my new found ability to say “No” has given me so much time to do more important things instead of just being “busy”.

    Thanks again!

    Like

  9. These are the very steps lined out in The Secrets of Power Negotiating. I got that book a while back. As a matter of fact I was reading it at the same time as 4 hour work week. hahah.

    Great tactics. Thanks for another useful article Tim.

    Like

  10. I just came back from a trip to all around turkey a few months ago and I’ll tell you a 3 week trip there will turn you into a hard negotiator. i’ve always loved debating, negotiating so this stuff is fun for me. im actually going to china for a month in a few weeks and looking forward to doing some great negotiating there as well.

    don’t suppose you’re going to be in china during march are you tim? by the way i still have that funny pic of you and rohit bhargava at the web 2.0 expo, the one where you were holding his book…ya i’m the guy who took the photo…remember?

    hope all is well with your travels/endeavors/history channel stuff.

    hope we can meet again soon.

    jacob

    Like

  11. Great advice, it definitely reflects a lot of experience. What I’m wondering about is the ethics of principle 5, not being the ultimate decision maker, particularly when it’s a one person show. What’s the bright line in the ethics of negotiation?

    Like

  12. Perfect timing!! I am firm believer in things coming into a persons life at the right moments and this is a perfect example. This is exactly what I needed today!

    I am going to be in contact with a vendor soon about purchasing some of their product. I am going to try my hardest to get them to comp the product for me, but at the very least get it at substantially discounted price. This article gives me some great tips on how to be firm and still fair to get what I want.

    Thanks Tim!

    Now I am off to commit this to memory.

    Like

  13. Great walkthrough Tim. I find the example really puts me in the shoes of the dealmaker. I find I get a bit nervous negotiating large deals, so I try to practice at farmer’s markets. It has really helped me with my negotiating. Keep up the good work!

    Cheers,

    Jeremiah

    Like

  14. Great post Tim!

    Another thing that my employers have done is negotiated a deal for in-kind sponsorship, where we receive advertising for our business in exchange for promoting the services of the PR company. Advertising costs are zero, but the benefit is great for the time and effort invested. This is also known as a value transaction, whereby people arrange a deal where both parties receive value but not necessarily in the form of money.

    Like

  15. This might work for larger magazines that belong to big publishing companies that can sustain temporary losses on advertising.

    Unfortunately if your product is in a niche market, and you prefer to advertise in smaller, independent magazines that tightly (effectively) target that niche, attempting to push them down to 75 percent below rate will, in pretty quick order, put those magazines under. So you’ve just lost an advertising venue that directly targets your key market, and may have to transfer to another one that takes a broader stroke approach (not as effective).

    This is a short term strategy that seems likely, in some cases, to result in a lose-lose situation.

    ###

    From Tim: Mel, first, thank you for the comment, but please don’t attack other people on the blog. Not cool, so I deleted it. Second, media sellers will go as low as they can afford while making an acceptable profit. No one is forcing them to sell it at a 75% discount, and — as someone who has also sold media — I can tell you that the hard negotiating happens on both sides. Not only that, but that the media sellers themselves admit that no one who knows what they’re doing pays “rate card”.

    Best,

    Tim

    Like

    • @Mel and All,

      Mel, first, thank you for the comment, but please don’t attack other people on the blog. Not cool, so I deleted it. Second, media sellers will go as low as they can afford while making an acceptable profit. No one is forcing them to sell it at a 75% discount, and — as someone who has also sold media — I can tell you that the hard negotiating happens on both sides. Not only that, but that the media sellers themselves admit that no one who knows what they’re doing pays “rate card”.

      All of the magazines I negotiated hardest with from 2000-2004 are still in existence.

      Best,

      Tim

      Like

    • I have to say that there is no price that is too low the day before the magazine goes to print, it’s the same with flight tickets, if a seat isn’t sold, it’s better to sell it for £1 above cost than to not sell it (as long as you don’t risk damaging your brand).
      for media sellers, if they’ve not got an ad to put there, they get nothing for that space, so 75% off is still a lot more than getting nothing to fill the space!
      What *do* they fill the space with if they don’t sell it anyway?

      Like

  16. Great post Tim. I can definitely use this post specifically in my advertising efforts for The GMAT Coach. Our next session is this weekend in Atlanta, followed by Seattle on the 27th and then back to Atlanta March 6th.

    If you ever want to see if you can ace the GMAT in > 3 days using 80/20 principles, shoot me an email (Amy has it)

    Also, LOVED the gift you sent. The Planet Earth DVD’s were a great choice. They are such a joy to watch. Thanks so much.

    Cheers,

    Lee Burrell

    Like

  17. Tim, you bastard. I’m in sales and am well aware of these tactics from the seasoned buyers. They have names like “30% Jim” and “50% Frank.” Now you’ve let the cat out of the bag for everyone!

    I will say that one tactic everyone should learn and practice is silence. The uninitiated (which is 99% of the population) can not tolerate silence. They will start yapping every time. Try it the next time you are on the phone with a friend… or anyone. Just see how long you can sit quiet as the other person gets nervous and does all the talking.

    By the way, turnabout is fair play. How about a list countering these tactics!?!

    -Jeff

    Like

  18. Hi Tim,

    This is my first post as well! I will definitely be trying to use this tactic in the near future. Hopefully the magazines won’t pick up that we’re all using the same tactics on them! Can you share with us how you got your car at 50%?

    Thanks!

    Love,

    Diana

    Like

  19. Tim, that was a very informative post and reminds me of haggling in Cairo. I got a great deal because I didn’t want what the vendor was selling (really did, but anyway). Using these techniques and going in with a plan will save you lots of money on any item with a soft price. Don’t forget that you can even get good price cuts at stores like Wal-Mart and Best Buy.

    Like

  20. Cool post, it follows up the book you recommended in your book. I have a case study I would like to submit. It is a bit different but thing it may have merit, I will let you decide that. I will have typed for you tomm and send to you. Enjoy your training weekend.

    Best

    Jose Castro-Frenzel

    AKA: Blog posts that would work: Learning Sign Language Quickly & How to Obtain VISAS on the ASAP and avoid the red tape. AH, nothing like personal experience to inspire thoughts. : )

    Like

  21. Hi Tim,

    Thanks for your response and my apologies – I intended to respond to a particular word in another blogger’s comment, not attack them directly. I only meant to make the point that somebody always pays the price of massive discounting, and if a seller finds themself in a market where all their clients have been encouraged to believe they can/should get gigantic discounts, it won’t be long before that business goes to the wall.

    Like

    • @Mel,

      No problem at all and completely understood. The point you make is an important one.

      @Talani (sp?),

      Soho is a deal. I’ll need a sherpa to help answer some questions about the Sports Marketing and entertainment worlds :)

      Tim

      Like

  22. Priceless, as always. Any recommended reading, what was your negotiating bible? Do you EVER speak on the east coast like in NJ/NYC? Your a Tiger (P.U.) don’t forget about your roots on this coast :)

    In all seriousness, you have been a great model during my technology re-birth. As they say “Don’t hate, IMITATE.” I have relationships with many celebrities, athletes and executives from my background in Sports & Entertainment, but my secret weapon is this blog.

    Next time your in NYC, Thai in SoHo on me.

    Health and Profits
    Talani

    Like

  23. @jeff waters. Countering tactics? Turn the buyer away at the first sign they try to wheel and deal. If they want your services bad enough, they’ll come back (and then you’re holding the cards)

    I admit there are good tips here, many based on ‘closing’ techniques, but I rarely lower my prices if pressed like these examples. Further, it’s usually the customers that want to knock your prices down are the same customers who require the most attention and time later (costing you more money). I believe Tim had a page or two about that in his book.

    Like

    • @Eric,

      I’m glad you brought up the concept of identifying high-maintenance customers, as it’s critical.

      Here’s the important distinction: the customers who negotiate hard but fairly — and once — often end up being excellent long-term business partners. Customers who want to repeatedly renegotiate and apply price pressure are nothing but headaches. Be tough but be fair.

      And, yes, if the buyer wants it badly enough, he or she will agree to pricing that you set. In negotiation, he who cares less wins. It’s all context dependent.

      All the best,

      Tim

      Like

  24. thanks for the reminder of how to do this! It’s very timely obviously. We negotiated a huge deal at our local Tractor Supply in summer of 2008, and it was amazing how easy it was. All we had to do was ask. Now we negotiate everything if we can afford to walk away and use another company, and usually the other side does come down. And we weren’t even using any real strategy. Now with this reminder, I can’t wait to do it the real way!!!

    Again, thanks for the strategies, I have a new project to use them on already tomorrow!

    Like

  25. Hi Tim,

    This is spot on. I just used many of these tactics to get a great discount on some web development work I’m having done. I also used to work in online display advertising and saw this kind of negotiation every day.

    I’ll add a few more counter-intuitive ideas to the pot.

    1. Talk to the most senior person you can.

    If by some stroke of luck you connect into the organization via a high title holder who no longer does most of the day to day sales himself (hence out of touch with prices) and put in a low ball offer, this will often turn into an irrevocable must do for the people underneath him.

    2. The sales person is actually on YOUR side.

    Especially when they are paid on commission. They are hot to make a sale, any sale, and see the commission check lighting up in front of them. Profitability does not matter to them since their pay is usually based off of revenue. What happens on the back end is they turn into a champion for your cause and your price. I’ve seen it happen time and again the sales person will hammer the pricing team until they relent, or go to higher management to force the sale through. Very few sales people are capable of playing hardball. They are paranoid about losing the sale and will make nearly any concession to get it.

    The parrying steps back and forth are not so much important in and of themselves as understanding the psychology of the situation. Having some understanding of competitive prices is also great in helping you figure out what you can get away with, and shortcutting the negotiation process.

    Like

  26. The leverage has shifted away from advertisers for the time being. With more and more big companies cutting costs, smaller business can jump in for a deal that wasn’t there a few months ago.

    “Principle 5: Never be the ultimate decision maker. Having partners or superiors, often imagined”

    That’s the number one tactic of every salesman I’ve met while shopping for cars. A few of them went overboard with it and lost the sale. You have to keep some authority.

    Like

  27. Very useful tip, particulrarly for women, who tend to ask less naturally, as some studies showed, perhaps because they feel they would seem rude.

    Viewing negociation as a scenario and a technical ability changed tremendously the way I felt toward it. Before, I felt bad asking anything. I am not yet very good because I get nervous but my progress excite me (I tried for fun to negociate my gym membership, and it worked ! I am sure I could have obtained more with more silence on my part, dammit).

    Not related but you asked on twiter if I remeber well what topics we would like you to write about on the blog. Having a page on your blog where we could post suggestions of topics or vote for suggestions of other would allow you to see which topics are popular. Would this be possible ?

    Like

  28. Hi Tim,

    Another great section from your book and is relevant to my business. I believe that this information is even more valuable today given the present economic situation. Bottom line, advertisers (magazines, radio stations, newspapers, etc.) are hurting. They have tons of unused inventory because a lot of businesses are not advertising. During the past couple of months, I have found it a lot easier to negotiate with advertisers. In some cases I am even getting advertising for free through joint ventures.

    This crazy economy definitively creates huge opportunity in the advertising arena.

    Thanks for all your advice.

    Hunter Ogletree

    Like

  29. A thorough and fulfilling post.

    As a representative of the volunteer and charity sector I can state that charities are always on the look out for a discount in this area. No doubt the charities get discount but every little helps.

    Azzam

    Like

  30. Another way to save on advertising is to set up your own in-house ad agency. Usually, a separate bank account (Acme Advertising) and a letterhead design is all that’s required. Have your “agency” buy your space and get the discount.

    My favorite, though, is the “earned-rate discount.” Most publications give advertisers a break when they buy ad space in multiples -say, 3 ads to run over the next few months. If you’re just buying single ads, when you come to placing the third ad, tell them you’re taking the “earned rate,” and take the discount not only on your current ad, but on the last two ads as well. Great way to get the rate down!

    You should check the pubs’ rate cards -most have discounts at 3, 6 and 12 insertions, and there’s no reason you can’t earn all those discounts, even if you don’t have a contract for multiple ad insertions.

    Like

  31. Tim: I have just recently been introduced to your blog by a good friend and avid reader. I like what you do here.

    I am on the other side of the desk – I sell advertising space in trade publications. If helpful, I’d like to present my feedback for your consideration.

    I’ve been selling ad space for 16+ years and I deal with folks using these tactics on occassion. My challenge with this model? It’s very short term. I work hard to build my business on integrity and care for my customers. Sometimes I have to say no to business because the organizations I represent don’t care to do business this way. Our goal instead is to provide the best value to all advertisers equally and to make a profit.

    In each of my experiences with the approach you offer its been used forcefully and leaves me feeling disrespected. I often ask what the negotiator would say if the tables were turned. I usually get no answer.

    The folks I find myself working hardest for are not those that use this strategy, but instead those that seem most vulnerable; those that don’t know the rules of negotiation, that don’t seem to understand frequency discounts or added value, etc.

    I think a better approach – at least in the world I find myself working – is a very human, honest, relationship building exchange of “how can you help me get the best value for my money, and if I trust you are doing that for me, I’ll trust you with my business.” That keeps me on the straight and narrow, helps creativity flow, and allows for a long term relationship built on trust and mutual respect. And its a very rewarding approach.

    Them’s my [more than] two cents. Keep it up. Thus far, I find my friend’s enthusiasm for your contribution well-founded.

    Like

  32. Love the much more meaty version of this angle, Tim!

    . . .the book covered it nicely, but this is like a sales script. . .awesome. I’ll definitely be using this approach in 2009 and have already gathered publications using the strategy you’ve outlined in the book, so from here it’s just a matter of figuring out the budgeting and ironing out our approach based on your suggestions. Thanks!

    P.S. Other than Talani, if you find yourself in need of experts in the entertainment world (music at least) I’ve got several friends from way back that I’m sure would pick up the phone to chat with you. And, most are in NY or LA so you’re there often enough for an in person meetup as well. Cheers, D

    Like

  33. Tim – Let me paint a different picture, so your readers can make a sound business decision understanding the negative side of rate raping.

    Buyers, please understand that by spending your dollars with a magazine (or any other form of media) you are not doing them a one-sided favor. You are not buying advertising, you are investing in advertising. Do you buy stocks because they are cheap or because of their potential return? Consider your advertising dollars in the same way.

    Here’s the reality: Rate raping isn’t new, it’s called remnant advertising. Remnant advertisers never get called by an ad rep until the close of an issue and only if space is available. Yes, magazines actually do sell out of space. If a magazine is full, guess what? You don’t get to advertise. And, do you know what the key to advertising is? Consistency. If you’re going to risk advertising to an audience only once, don’t do it at all, you’re wasting your money. Tim, I challenge you to find me one successful company that thrives (or better yet, survives) with an inconsistent remnant advertising strategy.

    Lastly, advertising reps can be your biggest asset in terms of editorial coverage. Remnant advertisers are NOT a priority to advertising reps and thus, you’ll have very little support from them in terms of pushing your company for coverage.

    If you are content with a failed advertising strategy, remnant advertising is the way to go. If you want your advertising to succeed, consider viewing it as an investment, not a commodity.

    @danerobert

    Like

  34. Tim,

    Those are definitely great tips, and personally as a publisher playing both the ad sales and ad buying game, you would not be a very good client.

    Constantly discounting rates really devalues the overall investment and is hell for a salesperson. You clearly are calling in to the company, thus showing your interest in the brand, and your understanding of the value of advertising in their magazine/website.

    As a salesperson, you shouldn’t rely on discounts to sell anything. As a good salesman, your job is to articulate the value in your company. As long as the ads are competitively priced, cost reduction is not going to build a relationship with a client, and will not be worth it in the long-term.

    Like

  35. Great article, and reminder. It seems that to be successful, one needs a plan that is driven largely by the mind. Once that becomes “natural”, it’s then possible to rely upon emotion, intuition. But, for the inexperienced negotiator, having these principles “in mind” is so important.

    I have a client who is “pushing” on me right now, seeking discounts – and he’s good at asking – but, it’s important that I (and others) stay firm to our structures. Instead of making an emotional decision, stick with the principles.

    Thanks Tim –

    SN.

    Like

  36. Tim,

    You make some good points. But I don’t think I would be comfortable invoking imaginary superiors. That just feels dishonest to me.

    >We’re looking to do a full 12-month roll-out but are doing a one- or two-month test first.

    Is the 12 months genuine here, or just a line to get a better rate?

    Like

  37. …….Just a note. Have you noticed how things posted on wordpress seem to rank higher on google. I have observed this and it was brought to my attention today by someone who helps me with my websites. This can be very helpful when building a site. Please anyone feel free to correct me if I am mistaken, Thanks : )

    Cheers

    Jose A Castro-Frenzel
    Dallas Tx

    Like

  38. Tim,

    This article is absolutely terrific! Looking back on my (first) salary ‘negociation’ (overstatement BTW), I now see how I can do much better next time (coming up). (I don’t intend to drive the hardest bargain possible BTW, for obvious reasons).

    Question: 20 and 30 June seem so far apart. Why not 30 June minus the time Fed-ex needs to deliver the goods (aren’t ads just emailed these days?). Apologies if this question has an obvious answer (but it isn’t obvious to me – I’m not American and not familiar with the process). Thanks!

    P.S. one of your best posts ever!

    Like

  39. Sorry, I see that FedEx only mails the checks (I should have read more carefully before posting. I guess I was too excited by the article :-) Still the question remains: why not wait until June 28?

    Like

  40. Great Post Tim! I love to negotiate and have fun with it. These are tried and true principles maxed out!
    These can be used in any industry at any time..from personal experience.
    Thanks.

    Like

  41. Hey Tim,

    Great article, por siempre. I am wondering if you could post something reflecting your views of using Google Adwords nowadays… It seems that prices have gone up significantly since your wrote 4hww. Do you use/recommend a different strategy?

    Like

  42. Atleast have the courage to cite Roger Dawson for these tricks. Don’t make it sound like you invented these gambits.

    ###

    From Tim:

    Be calm, big fella! #1: I cite Dawson in my book and give him full credit for popularizing a lot of these gambits. #2: He didn’t “invent” them either. 3. I never claimed to invent any of this.

    Tim

    Like

  43. This is a fantastic piece of information! I have some products that I want to market very soon in print and I will be referring to this article each step of the way! Thanks for saving me some serious cash!

    Like

  44. I spent a number of years in the publishing industry (as a production coordinator, not in ad sales) and I can confirm that “rate card” pricing is not unlike the price that a car dealer slaps on a windshield. Nobody actually pays “rate card” prices; they are simply a price-positioning statement on behalf of the publisher.

    That said, many successful publishers won’t spend much time with potential clients who attempt to grind down prices too much. Publishers I know of – and I know a number of them, personally – have a lower limit, beyond which they simply won’t even entertain a conversation. They will simply move on to the next client and spend time working with them, rather than spend time and resources chasing a low-balling client.

    Getting an ad rate-carded at $5000 for $1350 is great for the client, but doing so may also diminish the perceived value of ad space, which may prove damaging in the long term to the publisher.

    So while I’m all for negotiating, the outcome has to make sense for both the publisher and the client. A fair price is a fair price; if one side feels shortchanged, then the outcome is sour and doesn’t lead to a good working relationship between provider and client. And having a successful publisher in your corner who will go the extra mile and extend deadlines or credit when necessary can be a huge boon to an entrepreneur.

    Like

  45. Tim, Happy b-day! (My youngest sons b-day is today!)

    I think it’s good that you are putting this out there right now to remind fellow entrepreneurs that negotiation isn’t just for selling, but buying as well.

    In fact, I just negotiated a deal for our new office space last week using similar tactics as the ones you mentioned here and was able to get my space (complete w Herman Miller furniture) for 70% off market!!

    This stuff works. And the landlord was thanking me over and over for bringing them the business.

    Keep it coming!

    Denny

    PS- it was great meeting you at blogworld! You were super generous to all of us with your time.

    Like

  46. In the cases where Principle #1 may not apply (i.e, the purchase of online services or subscriptions where the vendor may publish or quote a fixed price or rate), assuming it is appropriate to ask for a discount, what discount should one expect to negotiate?

    Like

  47. So saving money, or making it, in this way is about lying. Now that I recall, lying to your enemies was a big part of the Jedi arsenal.

    Like

  48. The ideas Tim brings forth here do work! being in advertising and marketing for over 15 years i have seen it and done it first hand. everything especially when buying media is negotiable. dont be afraid to do it! whats the worst that will happen, someone will say “no”? in these economic times especially try to make your money go as far as it can. those who push hard advertising now will be “top of mind” to buyers when the economy booms again. everyone who is keeping their wallets close to heart now and says they cannot afford to advertise are doing nothing but losing ground everyday. build your brand now! speaking of the economy, they say we are in a recession. if so how come every restaurant i go into is packed every night????? very interesting.

    Like

  49. Interesting to realize that such tactics can not only be used by you but used against you by those wanting a better deal, and who can blame them. How about a post on how to counter such tactics?

    Like

  50. Who doesn’t love a discount? Ask and you shall receive. Ask nothing, and you receive nothing!
    @Gordon Hunt-I agree with your assessment. Its a turnoff when too many people are looking to cut into your profits right from the start. I get this on a daily basis.
    @Dana-Absolutely! An inconsistent strategy is a waste of money. I think the example above works best if you are an established brand introducing a new product, not for a startup.

    Like

  51. What tips do you have to avoid giving in to this same pressure from others to maximize your profitability both personally and for your business?

    Like

  52. I will push myself to be more assertive
    and hang in there to get best deal.

    These are exciting times for the
    little guys to get big breaks, now the corporate world
    is shaking.

    Thanks for the ideas, now action…….

    Like

  53. Wow. No joke but i just went through a similar conversation about 15 minutes before reading this. I was calling a restaurant to get price quotes for them to cater food for our fraternity dinner (about 100 people).

    1. I made it sound like we wanted something for next week, even though I was just getting a price quote to know what to expect later. We don’t actually have any dinners planned in the near future

    2. I mentioned the competition I was talking to and how they were much cheaper

    3. When I got the first price, it was a range. i flinched and asked for a more precise number. He went to the low end of the range. Then i pressed further he went even lower.

    4. I said I had to check with the “fraternity president” who makes the final decision. “But unfortunately he’s kind of a cheap bastard so he might not like this price”

    I ended the call with a price almost half of where we started, and left with a good relationship with this person. I got his name and direct contact number. Now in the future when we actually do need to plan a dinner, i’ll be all set (or will negotiate down even lower, starting with this new base price)

    Last week I went to the Lakers/Warriors game and I got some tickets well below the asking price. I saw an ad, I called the person (not email, too slow), and made an offer. “I’ll pay you $X and i can send it to you via paypal in 10 minutes. Let’s just get this done.” I think a direct offer like that, without all the fuss, really made a difference.

    My dad is an amazing negotiator. I learned a lot from him. Man, I could tell some *ridiculous* stories about this negotiating skills. Really wild stuff. I really enjoy negotiating.

    Like

  54. @tim: Concerning your call for “what is the hardest fitness test” on twitter (don’t have twitter so I respond here).

    Have you tried CrossFit? They’re supposedly extremely hard. Also they specialise in not specialising, which sounds like something you’d like. Tell us how you like it! CrossFit.com it is.

    Like

  55. This is totally unrelated to the post above, but I thought it would be interesting to see if you would add a couple of activities to deconstruct since you like deconstructing them so much.

    Standardized tests — everyone has to take them and I know very few people who enjoy the experience. If you cracked these guys and helped others jump through these hoops, you’d really be doing the world a service. I know I would never want to do this without needing to, but you doing this would be akin to a lawyer doing pro-bono work. Yea it sucks, but you’d be helping a lot of poor smucks out if somehow you had some sort of breakthrough.

    (side note: I just took the Law School Assessment Test (LSAT) and it was a
    very sobering and frustrating experience which is why I have an interest in
    the subject at all)

    Golf — I personally love this game, but after 12 + years of playing, I still suck at it. Many teaching golf professionals teach students to expect 5 years of practice to change one small flaw, such as grip position on the golf club. I feel this would be one activity, that if one deconstructed and internalized, could be mastered (or at least achieved above average status) quickly. Also, I don’t want to hear no, “My body is only good for lifting heavy objects,” excuses. There are some awesome players out there that have physical deformities, weight problems, and MS. If they can do it, anyone can. Also, golf has wonderful therapeutic qualities, especially if you can play without cursing.

    Whether you do decide to take on either of these activities or not, it would be awesome if you had some sort of status update that told everyone what you were working on mastering on any given week along with the challenges and rewards you have experienced. I know I’d find it interesting.

    JB

    Like

  56. Great post Tim,

    scripting and planning all the probing questions and scenarios coupled with some negociation theory is definitly the best way to deal with such situations.
    Keep it up, that was one of the posts I wait for all month long :D
    Cheers from Canada

    Like

  57. Great Post. First time commenter. I am a huge follower though. Love it and try to live it. The book was awesome, am looking forward to revised books. You are the man right up there with Michael Gerber. However I am struggling on a personal issue with smoking (cigarettes:) any advice or streamlined way to quit? I am down to 3 a day but cant kill it. Maybe its my will power, but I have so many triggers such as coffee (no i will not quit coffee) Sorry I know this is a random question.

    Like

  58. Hello All. I am looking for a serious 4 hour work week mentor. I am a educated woman ready to apply the principles of this book with a bit of structure. Can someone point me to / or would consider one on one coaching? Serious/ successful replies only. I must admit I am quite disappointed to read that Tim does not have classes or coaching available for individuals such as myself (not YET able to pay 5 or 6 zeros )who is really looking to make something for her life and family. There’s gotta be a network.
    Any direction would be greatly appreciated.
    ndkelly@optonline.net

    Like

    • @Indy,

      Please do get on the forums (see it on the navigation bar of the blog) and you can search “4hww” or “4-hour workweek” on http://www.ning.com. I hope to have some events in the near future that don’t cost as much as my speaking engagements, and I’ll certainly announce them on the blog if/when they get confirmed.

      Best of luck,

      Tim

      Like

  59. Interesting points from Gordon and Dana on reasons why Tim’s strategy may not always be the best way to proceed. However, seems to me the only way to really determine this is to test them. Anyone successfully used the “help me get the best value for my money” vs the hard negotiation a la Tim?

    Like

  60. Hi Tim,

    Thanks for this wonderful advice! Read about this in your book on & on the resource page for readers!

    I think I must test it out else I would not know. My guess is that it will work in perhaps most context!

    I would love to share any experiment I have :)

    Cheers!
    Ai Ling ONG
    Singapore

    Like

  61. Timothy,

    l will be honest with you, this is the 2nd book i have ever read in my life & i wish i would have read more through out life now 30years old.I have always lived life thinking “just stack up more and more, & it will get done” , like we get more time, to get more done, as we get older (WRONG). Now operating my number (4) company with 1,2,&3 keeping head up above water @ the same time, i have learned to better manage my time by planning my next step while making my next move, and being able to pan out the (time consuming clients) to (clients that consume more money than time) in a much easier to follow technique.My (VA) with a team of other (VA’s) are continuosly making progress with more done and less spent (hours,money,brain cells, etc..) thus creating technique to better follow and live a little bit more on the free side. (free from cheaper advertising to comparing what needs to get done, compares to how much will it cost me to have a VA accomodate that task). Not rambling, just excited that a new passage of life i have found and educated my everyday tasks with is working to my benefit.

    P.S (thanks again Timothy for sharing your technique of a quality lifestyle, compares to an early death of over-exhaustion while spinning my wheels)

    Best Wishes,

    A youngster inspired by your moves
    Pete
    INK CARTEL CLOTHING COMPANY

    Like

  62. I help people set up their own therapy or coaching businesses and have referred dozens of people to this piece on how to get a good deal with advertising. Before I saw this post I often recommended that people avoid direct advertising as it is too expensive and rarely creates the return they need in the short term. But with this way of getting a discount, it makes advertising affordable at last.

    Thanks Tim!
    Matt

    Like

  63. I really want to start a website right now and I read your book which gave me great advice. My question is where should I spend my money first to get my website and product noticed other than the free or close to free outlets like ebay, craigslist ect.? Given I am on a tight budget at the moment and a grand is a lot right now.

    Like

  64. I have run a retail bicycle shop for years. I used to wheel and deal all the time but after a few years I got really tired of haggling.

    Your approach is great. I like it because the cost to the vendor is probably minimal and you know it.

    Deadlines make negoitiations a lot easier.
    Great ideas.
    Rick

    Like

  65. Hi Tim,
    Have been putting my toe in the water as a new entrepeneur with my art website, launched in Nov ’08. Still zero sales. Have read and reread your book. Many thanx! A Zen practicioner for 30 years, I think I have the lifestyle thing honed pretty well, but have almost always been a wage slave. Am cautious about laying out more money at this point for ads. It seems like the sharks outnumber the dolphins. What to do?

    Like

  66. I’ve got to admit, that was a pretty interesting read. The cool thing is, is that this actually works but people give in to easy because it’s uncomfortable. Which it is, but you stand your ground, you will easily get a discount etc.

    Like

  67. I’m in the press industry, and I can tell you that this is the kind of advice that is threatening to drive my business and the rest of the industry into the ground.

    Your use of the word “negotiator” is an euphemism for “haggler” in every sense of the word.

    During Japan’s rapid economic growth in the 70s, there was a culture of respecting the sustainability of adjacent markets; thus haggling was extremely discouraged. That was one of the few less-well-known factors of the post-war recovery.

    Oh, by the way, I don’t condone Japan’s xenophobic attitude, but this is one of the primary reasons that the Japanese hate doing business with foreigners — and I can’t blame them.

    Question… where exactly do you plan to go to advertise when the advertising industry is destroyed as a result of this sort of 1:25 devaluing? Don’t you think this is a little too short-sighted?

    Like

  68. And I forgot to mention — the consumers end up paying for all of their media when the ad market is hurt. Why? Because advertising is the only other way, aside from having the audience pay, for media companies to pay for their expenses.

    Information doesn’t come for free, believe it or not. Translators, editors, designers, writers, paper, programmers, administrators, web servers — none of this comes for free, nor should it.

    Like

  69. Ok, so I’m looking at wedding venues and my comment is a bit off topic, but I think it applies here with regards to the art of negotiations.

    Usually, After the Matire D or B Manager takes me for a test drive of the place, we generally go to the ofice to discuss prices. Of which, I’m usually gently probed as to how many places have I looked at, in what price range and what did they offer, etc.

    Probing and asking questions is the best strategy when you’re the one ofering prices. I’m noticing that based on my answers, the MD adjusts the pricing, services, etc. Smart! It means that he still as a markup from his competitors or he could offer more or give the preception of more for less or for the same price.

    @r, I don’t think this blog entry suggest doing this all the time with the same advertiser. Just a way to get more if yor simply ask. We live in a bargain society so when you’re on the other end you should expect the commission, lower pricing or discount questions. Having what the competition offered in hand, you can effective set yourself apart by comparing line by line.

    Tim, you should write a post on the opposite end and when you’re on the other side of the negotiation table.

    Like

  70. Dearest Tim

    Your work is also having a profound impact on my young family’s life. We are moving to a village in central Europe with the children to get us out of the rat race and have TIME, the key ingredient, to follow our own path and project ideas.

    Zsuzsanna, my wife is setting up a educational program for Roma and disadvantaged children by using a new innovative English language program to build ability and escape from the cycle of poverty.

    So in appreciation, please accept this small article that I think you with find relevant to your new projects.

    Kindest regards
    Gordon

    PS: Drop in if you are in Hungary

    Athletic Ability May Lie in a Single Gene

    The ability to learn new motor skills is affected by a slight genetic variation
    By Roberta Friedman

    Scientists know that small variations in certain genes can predispose people to cancers or heart disease. Now researchers are starting to show a direct, quantifiable effect on learning traceable to these types of genetic influences: single-nucleotide polymorphisms. A difference in just one amino acid in a protein might explain why some people learn new motor skills faster and reach higher levels of performance.
    The protein, called brain-derived neurotro¬phic factor (BDNF), is a key driver of synaptic plasti-city, the ability of the connections between brain cells to change in strength. This plasticity is an important factor in learning, explains neurologist Janine Reis, who led the study at the National Institutes of Health. According to Reis, this finding offers the first evidence that slight variations in BDNF’s structure affect learning ability.
    Volunteers with one type of BDNF learned faster and performed better at a task in which they had to grip a handle more or less tightly to move a computer cursor through a sequence of targets. Those with a different variant never reached the skill level acquired by the faster learners. (The researchers excluded people who play video games.)
    Other groups have found that the BDNF version that Reis linked with poorer acquisition of skills is associated with reduced function of the hippocampus, a brain region involved in motor learning.
    This difference in BDNF may be a clue as to why certain people excel at athletic perfor¬mance, Reis says, or it may help predict how well patients will recover motor skills after a stroke. Her team and others are gearing up to look at gene variants in stroke patients, hoping to find new targets for drug therapy.
    Note: This article was originally printed with the title, “A Gene for Athleticism?”

    Like

  71. Hi Tim
    I love your idea with password from book to “reader-only resources” etc… cool
    I like “relax in public” as well, hehe
    Take care and Big Thx for Knowledge

    Like

  72. Tim,

    I read your book for the first time about a year ago while a wage slave for a major Canadian auto company. Since my departure, I swore to never return to a wage paying job again. Some of your insight definitely shifted my of thinking over the year, particularly the “comfort challenges” (relaxing in public is still one of my favorite exercises of the soul, so to speak). To cut to the chase though, I want to say that I’m in an interesting position right now. I’ve undergone a permanent emotional shift for the better and have dedicated the rest of my “working life” to adapting your style of money making to my situation (called life). The only beef I have with your website is the section that explains how if one becomes a “twitter member” or something to that effect, “followers” (ugh!) will receive freebees. The freebees are great, don’t get me wrong. It’s the distasteful use your pupils as followers. I realize that it’s just a word and that no offence is intended but I’d rather think of myself as your student. Nonetheless, I am going to buy your book instead of borrowing it, then study your principles until my eyes bleed cuz what you’ve offered, man(Tim), is the closest thing a householder has to heavan.

    Thanks a gazillion,

    Sincerely, Sammy B

    Like

    • Dear Sammy B,

      Thank you for the thoughtful comment. Just because I don’t comment much on the blog doesn’t mean I’m not listening :)

      If it were up to me, I wouldn’t use the word “follower”, but — alas — that is the word used for Twitter. I would take it one step further and prefer to view you all as a community of fellow experimenters, instead of my students. I’ve easily learned as much from you all as vice-versa.

      Have a great weekend,

      Tim

      Like

  73. Tim, just getting started with all your advice. This post, your blog, and your book have been a tremendous inspiration. I’m giving it a go at my own business. Having recently been laid-off from my job as an attorney, I’m looking at the situation as a blessing, not a curse…thanks in great part your words and the words of so many encouraging folks along the way. Taking a plunge like this has never felt better.

    Will be in touch in the comments section. Hopefully you can take a look at my product when it’s up and running. All the best.

    Like