So tell us about the pie, just start off with the basics. Why negotiate in the first place? >> Great, so in a situation, people try and figure out when I should negotiate, when not to. It's not the case that when you come to Yale you get to negotiate your tuition, although maybe with financial aid, there's some opportunity to do it. When I go to the lunchroom here and order my lunch, I may negotiate for an extra fry, but not for the price I'm going to pay. >> You don't get the discount? >> Damn, I- >> [LAUGH] >> I missed that one. But I thought I'd give an example that might make some people uncomfortable, but also illustrates, I think, a larger perspective on when to negotiate. >> Perfect. >> And the story takes place last Thanksgiving. I was in New York City and I wasn't really expecting to end up by a Stuart Weitzman shoe store. But it turns out there I was and my wife was with me. And they had these pair of shoes that were just amazing, and in fact- >> He's got a strong shoe game. >> Here they are. >> Okay. >> And my wife, they fit her, they looked great, and they were also a little expensive. And, now, normally I wouldn't go and say, look, can you get them for less? On the other hand, it was the Tuesday before Thanksgiving, and therefore, when the salesperson told us what the price was, well, do you expect these shoes will go on sale on Friday, Black Friday? And she said yes, they will. They may not have your size if you wait. On the other hand, I have this preferred customer discount of 30% that I can give you if you want to buy today. >> And were you a preferred cusotmer? >> I was not a preferred customer, but I'll come to that in a sec. So I said, we're done, sold, and we had the shoes. >> Okay >> So afterwards when we were all said and done so I had had the shoes, I said well, how did that all work? I wasn't one of your preferred customers. And she said, you were in luck because if you'd asked a different salesperson, you might not have gotten this, but I'm new at the store. And as a result, I don't have a set of preferred customers. So I have the ability to give this out to a group of people who will then become my preferred customers and hopefully you will now be in that category. And, therefore, she was able to offer me this discount that totally luck. Now, here's my point. If I went into the shoe store today, I wouldn't go and ask to see if there's a discount because I don't have a reason. >> I see. >> It's not just please do charity for me. Can you give me a lower price? I can't really afford it, or I can afford it, but I still like [LAUGH] to pay less. That's not going to work, it's silly. On the other hand, here I had a reason. The reason was if I wait three days, I could save $120. That's actually pretty good. And you think, well, okay, Barry, why are you wasting, is it really worth your time to negotiate for 120 bucks? Yes, I said, well, if it takes a minute. >> Yeah, it's a five hour lie. >> $120 is what $720 so $7,200 an hour, and by the way, that's post tax so we're talking about over $10,000 an hour. >> Cause the money you save when you're negotiating is the money you have paid or owe taxes on. >> Exactly, so it's basically, that was a $10,000 an hour rate. >> Yeah. >> For asking a question. >> Pretty great, and if you're doing it the right way, she might say no, but she's not going to kick you out of the store. >> Probably not, >> Yeah. >> And I appreciate that some people may not feel comfortable negotiating a situation like this. And I'm not proposing that you all now go into Stuart Weitzman and find ways to get these shoes for less. The big point is, when you're in a situation where you think you might be able to get a lower price, don't just ask for it by itself. Think about why it makes sense for them to offer you a lower price. And what is it that they're not so sure about? Well, they're not so sure that you might or might not come back on Friday. And they're not so sure that you'll come to the same salesperson. >> Yeah, it's a cheap favor for her, and what she also gets in return is by framing it this way, preferred customer, now if you do come back, you probably seek her out. >> You know I'm looking for her. >> Yeah, awesome, yeah. And what we teach, so you and I teach together. We've taught probably thousands of students by now. And something that you and I do that's excruciatingly rare and about to hit us in a week or two is so he and I meet in our offices every single incoming MBA student. And we review recordings of them negotiate and give them coaching and all of this. So it's a great learning experience in both directions. But often some of the things, when they want to talk about negotiation projects or outside things, they often do have these kind of bad examples of where it's just begging. >> Yeah. >> Yeah.
