Pricing

Over the next few installments I want to examine the issue of pricing, especially the question of why it is so hard for many people to ask for money on their own behalf.

When negotiating fees I take a counterintuitive approach: mentally downplay the link between the price I'm charging and what will eventually end up in my bank account.

Because my clients are huge companies, not individual customers, I am never negotiating with anyone with a direct (personal) financial stake in the decision.  My 'opposite number' will get the same paycheck regardless of the outcome of our negotiations.

Of course my client will always be operating within a finite budget but that's a different thing.  Most managers deal with budgets vastly larger than their own salary and so, barring (isolated) instances of outright graft, they treat those budgets as abstractions.  Because big organisations aren't good at rewarding individuals or departments for underspending, budgets are just big numbers there to be spent, or even overspent, by the end of the accounting period. 

What I need to avoid at all costs is the client making the link between his big number and my personal bank account.  The moment he thinks "His fee is about 15% of my annual salary!" then I'm in trouble.

A key tenet of successful fee negotiation is to treat the money as an abstraction, because that's how the client views it.