*Disclaimer* I am writing this post in a personal capacity; the opinions I express are my own and do not represent my employer.
I think that more people and orgs (especially nonprofits) should consider negotiating the cost of sizable expenses. In my experience, there is usually nothing to lose by respectfully asking to pay less, and doing so can sometimes save thousands or tens of thousands of dollars per hour. This is because negotiating doesn’t take very much time, savings can persist across multiple years, and counterparties can be surprisingly generous with discounts. Here are a few examples of expenses that may be negotiable:
For organizations
- Software or news subscriptions
- Of 35 corporate software and news providers I’ve negotiated with, 30 have been willing to provide discounts. These discounts range from 10% to 80%, with an average of around 40%.
- Leases
- A friend was able to negotiate a 22% reduction in the price per square foot on a corporate lease and secured a couple months of free rent. This led to >$480,000 in savings for their nonprofit. Other negotiable parameters include:
- Square footage counted towards rent costs
- Lease length
- A tenant improvement allowance
- Certain physical goods (e.g., smart TVs)
- Buying in bulk can be a great lever for negotiating smaller items like covid tests, and can reduce costs by 50% or more.
- Event/retreat venues (both venue price and smaller items like food and AV)
- Hotel blocks
- A quick email with the rates of comparable but more affordable hotel blocks can often save ~10%.
- Professional service contracts with large for-profit firms (e.g., IT contracts, office internet coverage)
- Insurance premiums (though I am less confident that this is negotiable)
For many products and services, a nonprofit can qualify for a discount simply by providing their IRS determination letter or getting verified on platforms like TechSoup.
In my experience, most vendors and companies are receptive to haggling with staff members who have junior titles (my title was “operations assistant” when I haggled on behalf of my organization). I think negotiating these types of operating expenses can be a high-EV project with legible outcomes for early career staff to own.
For individuals
- Tuition/merit scholarships
- A friend was able to save ~40% off his undergrad tuition by sharing info about a scholarship from a different school with his college’s financial aid department.
- I’ve heard that certain graduate programs (MBAs, JDs, Engineering/Computer Science/Data Science masters programs at private universities) are especially negotiable.
- Rent/AirBnBs
- Friends have typically had more success negotiating longer term AirBnB visits (e.g., 2+ weeks) than short stays.
- Salaries at for-profit companies
- At my first job out of college (digital marketing), I was able to negotiate a 60% increase from the salary the company offered.
- A friend working at a tech company thought there was no room to negotiate his offer. After the friend tried anyway, the company increased his offer by 15%. The friend asked if they could go even higher, and the company did.
- Brokerages
- By calling your brokerage and mentioning a signup bonus offered by a different investment company, you may be offered a retention bonus to keep your investments where they are. A friend and I received $800 and >$1,000 respectively after 30 mins of calls and emails with Schwab (though I had no luck at Vanguard).
- Wedding expenses
- Vehicles
- Medical bills not covered by insurance (e.g., elective procedures).
Strategies for haggling
Preparation is most of the battle
In my experience, the single most effective negotiation tactic is pointing to alternatives and asking your counterparty to match them. This can be effective even if you have a strong preference for your counterparty’s product/service rather than an alternative, particularly if you can make the case that someone in your position would be price-sensitive. For example, you might look up:
- Nearby apartments of a similar size with lower rent.
- Similar companies charging less for a product/service.
- Another role you are qualified for that pays more than what you’re being offered.
In addition to preparing compelling alternatives, I would also recommend brainstorming the factors that uniquely qualify you or your organization for a better offer. Here are a few that you might consider:
- You’re a nonprofit,
- You’re loyal (have had an account for a while),
- You started your subscription or inquired about promotional pricing during Black Friday, Prime Day, Cyber Monday, New Years etc.
- You’re willing to commit to a long-term deal (e.g. annual instead of monthly),
- You have more users than average to qualify for a “bulk” discount,
- You can provide something besides money (like a sponsorship or review, or a reduced-cost product of your own),
- You have a unique use case (e.g. you don’t need some features that most clients do)
- You’re “lower maintenance” than most clients (e.g., you don’t need venue staff to help with your event, you utilize a small fraction of your cloud storage space, etc.)
Especially if you find negotiating uncomfortable, you might consider preparing language that signals professionalism and thorough research.
- Sample: “Hi, I’m calling in regards to [example]’s account. We’ve been examining the value [example product] adds to our organization and we’re considering canceling our subscription because price is a barrier. Before we make a tough decision about canceling, I wanted to check in with you to see if there are ways we could meet in the middle. Do you offer discounts based on [four or five possible qualifiers]? I really appreciate your willingness to work with us on this, I’d love to hear more about our options.”
If possible, I recommend starting to haggle well in advance of when you need to make a decision. This keeps your options open if your counterparty is slow to respond, and adds credibility to the case that you could switch to an alternative.
I find that it’s helpful to prepare a best guess of the value of the deal to your counterparty and what concessions they are likely to make. It’s possible they will ask you on the spot what you want - I recommend anchoring your answer to be about 25% below what you think they would be willing to compromise to. Contrary to negotiations in TV and film, I think it’s unlikely your request will be “insulting” and sour the relationship. More likely, you’ll help your counterparty get a win by meeting them in the middle and “outperforming your cheery price”.
Frame your request as a win for your counterparty
I’ve found that setting low expectations about reaching an agreement helps orient a counterparty to the domain of gains (salvaging something from someone who would have otherwise walked) instead of the domain of losses (making a concession to someone who really needs the deal).
- I think it helps to reiterate this throughout the conversation. E.g., when a counterparty says they’ll look into whether a discount is possible, I like to say things like “excellent, this helps get closer to a price we may be able to maintain our account for.”
I highly recommend being kind to your counterparty and laying on the wholesome charm! I’ve been surprised by the level of influence that account representatives at big companies can have - they often provide a recommendation to the company’s decisionmaker based on your conversation, and in some cases they have personal discretion over the deal offered.
The more your counterparty likes you and the longer a conversation goes, the better it is for you. This gives both parties a chance to find creative solutions, and gives your counterparty more time to say “ok I NEVER do this, but…”
A “No” Almost Never Closes the Door for Backpedaling
It's embarrassing to hear someone say “best I can do is X” after I ask “what about 25% less? 10% less? 5% less?” But in my experience, once your counterparty makes an offer, they’re basically never going to take it off the table just because you continue to respectfully negotiate. As such, I recommend digging until you get to at least one “no”. Anything less and you’ll be left wondering what would have happened if you’d tried.
If your counterparty doesn’t budge, that’s ok! Haggling is hits-based, and every once in a while you get caught with your hand in the cookie jar. After trying, I recommend you close by thanking them and confirming that no changes will be made unless they hear from you later.
If anyone is interested in learning more about negotiating for effective nonprofits, I would love to talk. I find it energizing to help organizations doing great work save money, and I'm always excited to share information and strategize with staff at these orgs - please feel free to schedule a time on my Calendly.
Finally, here are a couple of my favorite resources on negotiation:
Wanted to let you know that this post, reminding me about this possibility, just saved my org ~$1.5k. 🌟