Negotiating; Playing the Annuity Card

I have written several posts on negotiating with customer service and sales people as a way of practicing. You can do this almost every day at home as telemarketers prey on you and your family. It makes getting unexpected calls more interesting. In a recent webinar on fee setting (which is also discussed in my new book, From Vendor to Adviser – #VendortoAdviser), I talk about the need to understand the value, and get to the point where your client really understands, before quoting price. This same principle is key to the negotiating process as demonstrated on a call I had yesterday with Time Warner. Here is what happened…

I received an unexpected call from a telemarketer selling phone, cable, and Internet packages. He started by asking me what I do for Internet connectivity, then went to cost – how much does it cost me. Keep in mind, this is not a return on investment sale, but rather a classic TCO (Total Cost of Ownership) sale. When I told him, he said, “Wow, that’s high”. His comment was not scripted which made me feel like he was actually listening to me. This one principle kept me on the line in the midst of a busy day!

He then asked about phone and TV. I don’t watch TV, so he went right to the phone/Internet bundle and started talking prices while mentioning faster speeds. He did not try to argue DSL speed vs. Cable, which I have heard one too many times. I wasn’t complaining about speed – just price. So as long as the speed is comparable, the price is all I care about. So where does the negotiation come in? As soon as we started talking quote…

Once we came to the real numbers it came out that there is an installation charge of almost $100 between my two phones, fax, and Internet service. Knowing that annuity revenue far outweighs the installation charges, I asked told, “I’m good to go if we can wave the fees”. “Can’t do that,” he said, the people who come on site have to be paid. But we all know that the money I pay for installation is not going directly to the installer, and there is no way the managers of that group are going to give up two phones and an Internet for $100. I’ll be paying $100 every month from now until I die, unless a cheaper solution comes along next year, so I said, “I guarantee your manager will wave the fee to do this deal, go ask him.” He was skeptical, but willing to go to bat for me. Within 60 seconds we had a deal, free installation, and half my current bill, without a long term commitment! It pays to learn what matters most when negotiating.