Please enjoy this transcript of the episode “Ramit Sethi — How Creatives Should Negotiate.” This episode was a workshop on negotiating. Transcripts may contain a few typos—with some episodes lasting 2+ hours, it’s difficult to catch some minor errors. Enjoy!
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Tim Ferriss: Hello, boys and girls. This is Tim Ferriss, and welcome to another episode of the Tim Ferriss show, where it is my job to deconstruct world-class performers from the worlds of chess, athletics, entertainment, politics, military, etc., etc.
And this episode is actually a workshop. You are going to listen in on lessons in negotiating. Not just that, but you will learn about positioning. You will learn about smart negotiation versus dumb negotiation. And of all of the resources out there on how to negotiate, 99 percent of them are piss poor. Overcoming mental barriers related to entrepreneurship, what you should charge or how you should think about charging for your services, and then mock interviews. And the teacher is Ramit Sethi.
These lessons are all taken from a class that Ramit taught. It was a multi-day course on creativelive.com, which is one of the fastest growing startups that I advice, where you can find some of the highest depth, highest quality, and widest breadth in terms of topic instructional videos anywhere on the web. You will be very impressed, and there is something for everybody. So you should check it out at creativelive.com.
And Ramit is not your man if you’re looking for political correctness, but he is one of the best negotiators that I know. And he is hilarious. One of the quotes from my first long interview that I did with him, which detailed how he turned his blog into a multimillion dollar business, is, “Indian people don’t get punched, dude. We don’t get into fights. We’re busy doing spelling bees.”
He is a man who loves to speak truth, even when it’s uncomfortable, especially when it’s constructive. He’s willing to take heat for it. And it is, all in all, very entertaining. I was considering calling this episode How to Negotiate Like an Indian, because that’s what he would call it and does call it, but it could also be considered negotiating for creatives. And this is particularly true, even though I pulled a lot from this audio for myself, where I am in life. So there are things you can use no matter what stage of your career you happen to find yourself in.
But if you are an entrepreneur, perhaps just getting into entrepreneurship, thinking of taking the dive into entrepreneurship, or you just want to get out of a trap of your won making, I think you’ll find a lot here, especially as it relates to language-smithing. Pay a lot of attention to the word-smithing and exact scripting that Ramit uses. And if a particular section isn’t clicking with you, just skip ahead 20 minutes or so, and you’ll find yourself in a new lesson.
A couple of resources that I want to recommend before we get started because they helped me quite a lot are related to deal-making and negotiating. And they’re primarily books, but one article. So first article is “1000 True Fans” by Kevin Kelly. If you’re gonna read only one article on marketing, that is it. Then books, The 22 Immutable Laws of Marketing. The original edition talks about imported lite beer on airlines and whatnot. Not the version for the Internet. Blue Ocean Strategy. And both of those books really talk about creating a category of one, which just increases your leverage and negotiating ability.
Then two on the tactics and strategies of actual deal crafting and overcoming objections. Getting Past No, which is the real life, I would say, counterpart to Getting to Yes, and Secrets of Power Negotiation. It is by Dawson, D-A-W-S-O-N, who cut his teeth in real estate. And I would suggest getting the audio if you can.
And the last resource, and all these things can be found in the show notes at fourhourworkweek.com/podcast. And you can find the original two-hour conversation with Ramit at fourhourworkweek.com/Ramit. But the last is an eBook, and that was my dog smacking her head on the table. But never mind that. The last is an eBook called Breaking the Time Barrier. This was actually authored by the Fresh Books team years ago. I did an interview with the CEO before this came out, and it was very, very well-done. And you can find it online. I linked to that. This was well before they ended up doing anything with the podcast.
But for those who have asked how can I implement the principles in the four-hour work week if I have a service business, or I’m in a service industry? Breaking the Time Barrier answers a lot of those questions, so I encourage you guys to check it out. And there are a few things in these lessons that are not relevant anymore, such as, I believe, the negotiated app, and occasionally, Ramit will say tomorrow or the day after, we’ll talk about A, B, or C. Don’t worry about that stuff. I had to pick and choose from about 20 lessons to get to an hour and a half, so there are three or four lessons in here. Take what you can. Ignore what you can’t. And if you’re Bruce Lee, you would add what is uniquely your own.
You can find Ramit at ramitsethi.com, R-A-M-I-T-S-E-T-H-I-.com, and you can say hello to him and risk being ridiculed if you want to poke the tiger by pinging him on Twitter at @Ramit, R-A-M-I-T. And without further ado, please enjoy these lessons and conversations and idea teardowns with Ramit Sethi.
Ramit Sethi: We’re gonna talk about, oh, optimizing your spending. Who here believes that you could actually cut certain areas of your spending? Not by depriving yourself, but perhaps by getting a better rate, or negotiating some of those rates? Anybody?
Okay, we’re gonna do a little exercise where people are actually gonna negotiate. Maybe the people on the Web. They can negotiate some of this stuff. I’m gonna teach you the exact words to negotiate with some of the companies you do business with. And we’ll ask some of the people on the Web to negotiate, and maybe they can come back with their results. It actually doesn’t take that long.
All right, so I’d like to first introduce a concept called negotiating like an Indian. Okay, so basically I was raised since I was like four years old to negotiate. My mom used to take me to Macy’s and teach me how to negotiate with the clerks. She’s like, don’t talk to her. She’s too experienced. Go talk to her. She doesn’t know what she’s doing. And I would learn how to negotiate all this stuff.
And buying a car, for most people who were born here, it’s like you walk in there, you buy it. For us, it’s like a five-day event. We eat breakfast at the car dealership and we’d go home. I’m not kidding. We would do this for four or five days. It was ridiculous. But that’s just how we did it as a family. So Indian people know how to negotiate very, very well. And I wanted to teach some of this to people here because it’s not natural, right?
First of all, most of us are afraid of using the phone, which is so weird. I don’t understand that. But we’re taught negotiating is haggling, and it’s unsavory, and what if they say no? And all this stuff. Anyone here have somewhat of a fear of negotiating? Yeah. And it could be negotiating our salaries. It could be negotiating with clients. It could be negotiating with some faceless person at a credit card company.
But it turns out that let’s say – I’m just gonna make up a numbers. Let’s say you’re spending 100 bucks a month on cable or whatever, okay? With one phone call, if you could negotiate 20 bucks a month off that, that’s over $200 a year in savings, right? For doing nothing. For one phone call.
The reason I call this a big win is that you keep on locking in those savings for years and years. You do the action once, you get the results for years and years. Kind of like when you raise your rates with a client. You raise it once, you get the benefits for years and years. Does that make sense? So that’s a big win because you don’t have to keep doing the work and using willpower. You just do it once, boom. You get the results.
So we’re gonna talk about who we can negotiate against. And I’ll give you a list of companies right now, because it’s awesome. In fact, I was talking backstage to one of the crew, and he told me he just read my book starting on Saturday, and he actually negotiated his APR with his credit card company. In other words, the interest rate he’s paying for his credit card debt. Did anybody know you could do that?
If you have debt, let’s say you have five or $10,000. You can. It doesn’t always work, but it works sometimes. You can actually negotiate that rate down. I have people who have negotiated something like 18 percent down to eight percent. Many people are saving 100 plus dollars a month, many hundreds, if you have a high amount, on just negotiating.
So let’s talk about the thing we can negotiate, and then we’re gonna talk about how we can use that for our lives. Credit card. You can negotiate for late fees, easy. Easy. APR, you can do. It’s a little harder. Cable. Anybody ever try to negotiate with your cable company? We’re gonna try that in a few minutes. Gyms, that’s pretty hard, but you can do that. Cell phone companies. Anybody ever try to negotiate with your cell phone company?
Female Speaker 1: I just did it yesterday.
Ramit Sethi: Did it work?
Female Speaker 1: Yeah.
Ramit Sethi: How? How well?
Female Speaker 1: From $106 a month down to $79 a month.
Ramit Sethi: Beautiful. $500 a year.
Female Speaker 1: One hour and 33-minute phone call because the timer was on.
Ramit Sethi: Wow, very good.
Female Speaker 1: And it was stressful.
Ramit Sethi: That’s beautiful. $500 a year in savings. And next year, it’ll be even more, right? And that’s very impressive for one phone call.
Female Speaker 1: Seriously?
Ramit Sethi: Yeah. Run the math.
Female Speaker 1: Wow. My brain.
Ramit Sethi: So that’s very good. And that’s the kind of stuff we can do. So I’m gonna show you an actual script for how we can negotiate with some of these folks. And this is something that everybody can do today. All right? You can use this word-for-word script today and negotiate, all right? And I have a whole bunch more scripts.
Let me show you this. So here’s a script. Okay, here’s what’s going on in this. I’m gonna read it off, then I’m gonna analyze it for you:
Hi, my name’s Ramit Sethi. I’ve been a customer with your company for four years. I’ve been doing some research, and I came across some other companies that can offer me a better deal than what you’re giving me now. The thing is, I’ve been a loyal customer for the past four years, and I’d hate to have to switch to another company just because of a simple money issue. But you know, times are tough. So what can you do for me?
Okay. You could break that up, you could break it into three or four paragraphs if you want. But let me analyze what’s going on here. This isn’t just some script I wrote in my bedroom and then put it on this screen. This script has been tested with tens of thousands of people, okay? It’s been tested with cable companies, credit card companies, all kinds of companies, all right? And I have well over hundreds of thousands of dollars in savings for my students using this stuff. It works. Does it always work? No. Can it probably work for you with one of the companies you’re paying? Yes. Yvonne, you’re a great example. $500 a year. So let me analyze what’s going on here.
I love this phrase, “Times are tough,” right? It doesn’t really mean anything, but it’s actually very true. Times are tough. Okay, that’s your reason for calling up and negotiating. So if you feel guilty about calling up a company, the truth is, times are tough. You call them up and you say, look, times are tough.
I also like to focus on how many years I’ve been with the company. Do you know why? Do you know how much it costs for a bank to acquire you as a customer? Anyone have any idea? A lot. Hundreds of dollars, sometimes over $1000.00. That includes everything from billboard ads, technology, the clerk, etc. You have to count all that. So do they want to lose you for a $27 late fee? No. They want to keep you for years. So that’s why I specifically put in this and tested it how many years I’ve been with the company.
Also, hopefully you can do a little homework and you can find out another company is offering you a better deal. Let’s say you’re on company X for cable, and you learn that company Y is offering a special introductory rate. This happens all the time. You call up the cable company and you say, you know, I’ve noticed that this cable company’s offering, in your case, $110? They’re offering $75. Well, what are they gonna do? We’re actually gonna do a role-play right now.
So I want to take one person who wants to negotiate with me. You can pick what kind of company you are. I’m your credit card company, I’m your cable company, whatever, and we’re gonna do a little mock negotiation right now. Who wants to do it I’m actually nicer than I seem.
Female Speaker 1: Can I do a gym negotiation specifically?
Ramit Sethi: Gym.
Female Speaker 1: Because those people are tough.
Ramit Sethi: Gym is tough. We can do a gym in a minute. That’s a very tough one. Who else has got something else? Who wants to negotiate?
Male Speaker 1: Oh, come on, stand up.
Ramit Sethi: They’re too intimidated. You can keep sitting in your chairs. Otherwise I’m just gonna pick someone. I’ll just cold call.
Female Speaker 1: I’ll do it.
Ramit Sethi: Okay, Yvonne, our champion. All right, so Yvonne, who am I? Am I your credit card company, your cable company?
Female Speaker 1: Credit card.
Ramit Sethi: Okay. How about I just issued you a late fee for paying late, okay?
Female Speaker 1: Okay.
Ramit Sethi: And the late fee was $35, okay? So hello, welcome to ABC credit card company. How can I help you?
Female Speaker 1: Hi, my name’s Yvonne. My account number should be there for you. I’ve been a loyal customer for the last nine years, and I paid my statement online, but it seems to have registered the following day, and I see on my latest invoice that there’s a $35 late fee. I’m not really pleased with that, and I’d like to see where we can get – yeah, I’m not satisfied.
Ramit Sethi: Okay. Let me take a look at your account, dadada. Yeah, I do see that late fee. Unfortunately, it was received past our grace period, and so unfortunately, we will have to keep that late fee on your account. I really apologize for that.
Female Speaker 1: Sorry, I appreciate that you’re trying, you’re at least listening to me, but I did make my payment, and there must be some leniency for someone – excuse me – who’s been with the company as long as I have. And if you look at my track record, I always pay on time. I think that there should be some extra grace in this case. I’d really appreciate more effort on your part.
Ramit Sethi: Okay. Okay, I’m able to waive that fee. Thank you very much for being a customer. We appreciate you.
Female Speaker 1: Thank you.
Ramit Sethi: You actually did a great job. And I want to point out – yeah, let’s give a round of applause for that. I want to point out what you did that was so great. And then I’ll give you a couple constructive things I might change. But honestly, it was great. I love that you didn’t end your questions with a yes or no question. That’s a critical mistake people make. They’ll say stuff like, “Can you do anything for me?” What’s the most common response someone gives you?
Female Speaker 1: No.
Ramit Sethi: No. Well, why would I want to do more work for myself and have to explain it to my supervisor? You said, “Surely you could do something for me.” And you also said, “I’m really not satisfied.” That is beautiful. You ended on a statement. I also love that you were not antagonistic. People think negotiation is about someone’s gonna break down and cry. No. You were very polite, but you were firm, right? Anybody else notice that? It wasn’t heated. We were just calm.
I also threw in a little no, and then you came back at me. And you said, “Well, I understand that, but blablabla.” So a lot of times, we don’t prepare, and we kind of get shot down. Then we’re like, uh, okay, bye. And we’re just like, oh, man. So you came back at me politely. You did a great job.
I might suggest a little tweak, which is, I like to start it off with a little rapport, a little friendliness, right? So you jumped right into it. I was like, damn, she’s here to play. But instead, you can say something like, hi, I really appreciate you taking the time to chat with me. First of all, before we get into it, I just wanted to confirm how long I’ve been a customer with you. I have eight years on my end. Do you show the same? And they’re gonna be like, “Yes, I actually show the same.”
So basically, I’m building rapport. Hello, how you doing? But I’m also laying the foundation for me about to say, hey, I’ve been with you for eight years, as we both stipulated. Just kind of making it a little friendly. It’s also possible that sometimes this company will just say no. And that’s the case. If so, you can say thank you very much. You can call back another time, all right? So there are ways to do it.
I’m gonna even show you this new iPhone app I have where I can show you exactly how to do it. But that’s a script. It’s very simple. It’s not complicated. But there are some key psychological triggers going on in here, right? Times are tough, there’s a competitor that’s offering a better rate, and I’ve been with you for X years.
All right. Let’s keep going. Let’s pause there, actually, for a second. Any questions about negotiation? I mean, there’s so many ways – this is an area where you can instantly save hundreds of dollars a year, and it’s a big win because you lock it in once, you get the savings forever. Sarah.
Sarah: Are there any situations where you would say, don’t negotiate? One of the things that you came out with, I guess a couple months ago, was negotiating your rent. I’m living somewhere where rent is cheap cheap. And I worry that if I were to negotiate that my landlord would actually raise the rent. He would be like, oh yeah, you guys are living out there. Actually I’ve been meaning to update it.
Ramit Sethi: Yeah, like he forgot about you.
Ramit Sethi: So I do have a mini course on how to negotiate your rent. And rent is actually very – it’s possible to negotiate. It’s a little tough. But it’s one of the biggest wins you can get, right?
Ramit Sethi: A lot of my students, they negotiate a couple hundred bucks off their rent, which is a lot of money. And that’s 200 bucks a month they’re saving for as long as they live there.
In your case, one of the things I advise is negotiating your rent isn’t for everyone. You want to first do a little homework, and I show you how to do that in the course, which is about let me understand, am I way underpaying rent anyway? If so, maybe I should just shut up and be happy with it. And if I’m getting gouged, or I’m a really good tenant, and maybe I have a little bit of leeway, you can actually do that. So you know that you’re underpaying. I probably wouldn’t do anything with that.
Sarah: Is that a general rule of negotiation? What are your general rules for not negotiating things? If you see a situation, how do you evaluate it?
Ramit Sethi: Great question. I negotiate when there’s massive opportunity for savings, and I know that there’s leeway in the price. So for example, if you’re buying an $80,000 car. I’m just using an example. There’s a lot of leeway to be negotiated. If I’m buying a hotdog on the side of the street in New York, I’m probably not gonna negotiate.
Ramit Sethi: I also use social norms. So do people negotiate at McDonald’s? I would love to, but I’ve never been successful. I just haven’t. So you’ve got to use your common sense. But I would say that most people, particularly in America, undernegotiate. They chronically undernegotiate.
And the fact is, okay, look. The savings from what you can save for something, you might save 10 bucks a month. You might even get rejected. But this is two-part. One, you can actually get big win savings because you lock it in forever. Two, when you start negotiating, you start realizing, oh my god. A lot of things are negotiable. Client rates, start dates when you start working with a client or a nine to five job. Anything, right? As long as you can bring value and you can communicate value to them.
So negotiation for me is two-part. No. 1, the direct savings. No. 2, the indirect benefit I get from knowing that a lot of things are negotiable. Okay? Yes, Drew.
Drew: My question is, in your script, you had “I’ve done some research and I found company Y offers this rate.” What would you do if you were trying to negotiate a price, but you’ve done all your research, and you’ve found there aren’t any lower prices, and you still want to negotiate?
Ramit Sethi: Yeah. First of all, I wouldn’t lie. I just wouldn’t bring that up. I would just say, look, times are tough. I just can’t afford this. I’d hate to have to cancel, right? And see how that works. If they say no, you say, what else can you do for me? What other introductory rates do you have going on?
A lot of times, cable companies – I’m using a cable company as an example – they’ll say, okay, there’s nobody else offering a better deal. But we have an introductory rate going on for our new customers. I’m happy to switch you there for six months or a year.
So right there, you’re locking in 30, 40 bucks a month of savings as well. And that’s not as big of a win because you’re gonna get shunted back, but you can often ask them what else can you do, which is kind of exactly what you said to me, Yvonne. Instead of saying, can you help? No. What else can you do for me? And let them figure it out for you. Okay? Got questions from the Web?
Male Speaker 1: Oh, we definitely do. Let’s start out with Inca, who is asking this from Cypress. What if you do not have the advantage of being a long-time customer, or you don’t have perfect on time payment track? How do you defend your position?
Ramit Sethi: Well, start making payments on time, first of all. There’s a nice little automation system I know about. You need to be a good – you can’t negotiate from a dramatic position of weakness. I mean, you could try, and I would say try, because what’s the worst they’re gonna do? Say no? But if you are not a good customer, then frankly, why would I say yes, right? These companies want good customers. They don’t want problematic customers. So I would say get your behavior in order in terms of making payments on time, etc., and maybe over time, maybe a year from now, you can go and negotiate. But probably no harm in trying.
Female Speaker 1: All right, this is a good question from Brenda and Rebecca Kirfman. And Rebecca’s in Nashville, Tennessee. And I also want to know how do I handle it when my clients try these negotiating tactics on me?
Ramit Sethi: Oh yes. Oh, everyone’s like, oh my god. So somebody asks, who should I not negotiate against? And I was gonna be like, me, because it will never work. People try to negotiate with me all the time. And actually, the people who work for me have used some of my own scripts against me. And I was like, damnit, here you go. You know what? Because they actually added such massive value that it wasn’t like I was being tricked. I wrote those scripts. But I realized, they convinced me that the value they added was there and was real and tangible, and so I actually awarded them at a raise.
This happened at another company I used to work at, and now at my own company. However, you will often find a lot of people who will try to negotiate you and kind of nickel and dime you. And I’m gonna talk about how to handle that tomorrow. We’re actually gonna do some hot seats, where I might be the nickel and dimer, and then you’re gonna have to come back at me. So tomorrow’s the day about turning your creativity into income, and we’re gonna work on that. I’m gonna teach you how to negotiate with clients, and what to do if they negotiate with you.
Female Speaker 1: That’s perfect, because for a lot of people in here who have standard fees, say, as a photographer, and are asking what happens when people try to negotiate those professional fees with me? So that’ll be great.
Ramit Sethi: Yeah. And I’ll just say one thing before we cover it tomorrow. You always want to think long-term. So if you see someone who is a potentially amazing client, and they just really hate the setup fees or whatever fees, you might actually waive them. But say, normally I don’t do this, but my goal is to work with you over the long-term, and I like what you’re doing. And I see that there are potentially 12 projects going forward. If I do an extraordinary job, the next engagements, they will have to include this. That’s just the way I work. But I’m willing because I want to invest in our relationship to start off here, and I’m willing to waive that fee if that works for you.
Who’s gonna say no to that? Plus, what have you just done there? You just locked in potentially 12 new engagements. So a lot of people, they get too fickle and focused on the near-term money, like don’t take away my $199 setup fee. But really, stop thinking about the $80,000 they can make for later. We’ll talk about that tomorrow.
Male Speaker 1: Kimbya Patrice is wondering if you find that there are gender differences in negotiation.
Ramit Sethi: Women chronically undernegotiate. They use certain words that cost them far more. I discovered this in my own research. It’s also validated in the literature as well. They say things like, “I think” or “Maybe.” They’ll end their tone with an upturned question mark. Anyone here do that?
Female Speaker 1: Yeah, so when I negotiated my salary, with a lot of your techniques, actually, at my most recent position, I was able to negotiate to almost double the initial offer.
Ramit Sethi: Can we get that on camera? Whoa.
Female Speaker 1: But a friend of mine who thinks that he would get along really well with you, and I probably agree, I sent him my email and said, what do you think of this as far as negotiating? And he totally tore it apart. And I had a lot of this, with the yes or no questions, saying can we try X amount? And they would have said no. Whereas he said, let’s try this going forward, and we can sort of talk about it. And so that, I think, was really valuable.
Ramit Sethi: Very good. First of all, I appreciate you implementing some of the stuff I talk about. It’s easy for us to all be here and kind of nod our heads and be like, yeah, I’m gonna negotiate, and then not do anything. But I really appreciate that you did it. And you almost doubled your salary. I’m so happy for you.
The gender differences in negotiation are real, okay? And we kind of intuitively know this, but in some ways, it’s not politically correct to talk about differences between men and women. But I don’t believe that. I believe that we are different, and we each have our strengths and weaknesses. And I know from my own research doing my research for my course, How to Find Your Dream Job, that the women who came in for testing – we brought them into the studio – they were just at a very different level in terms of negotiation. And they had these chronic tells. An upturned tone saying, “I think I might do this,” which is very common. And as a hiring manager, I looked at them and I’m like, cool, that just saved me $5,000.00. That’s just $5,000.00 more. And you don’t want to be in that position.
The thing you said about can we do this? Never. I’m glad you actually went and talked to a friend who was strong at negotiating. So many of us never do this, right? We walk into a negotiation with a client or with a potential boss as if we just go into it for our first time, like a fresh doe. Meanwhile, this boss has done this 5,000 times, so you’re going up against a hardnosed negotiator. And you expect to beat this person without even practicing once? Are you out of your mind?
I love that you actually went to a friend. And we’re gonna cover negotiation in detail on day three. But your friend was right. Simple changes in language can actually make you 5, 10, $20,000.00. I’ll give you a script right now we’re gonna talk about on Friday. But I’ll just give it to you right now. A lot of people, when you’re going to apply for a job, they’ll say, what are your salary requirements?
Female Speaker 1: Oh, I actually know this, too. And I’ve taught this to other friends who have killed it in there. I told you, I’m a long-time reader. So you say, I’m happy to discuss finances a little bit further down the road. But right now, I’m just trying to see if this position is a good fit for the both of us, or some variation thereof.
Ramit Sethi: That’s exactly right. Beautiful. Now what you did with that, and we’ll talk about this more – what you did with that was instead of succumbing to that question – many people believe that if someone asks a question, you have to answer it.
Anybody ever watch a presidential debate? Are you out of your mind? You ask a question. Now these guys are the true, true masters at it. Now they may answer the question maybe 30 percent of the time. But they have a message, and they will do anything to get that message out, okay?
So let me just give you an example. A top performer would never answer that. Almost never. So if someone asks me, Hey Ramit, what was your last salary? I need to know for the salary requirements, I would say exactly that. I would say, you know what? I’m happy to discuss money down the road, but right now, I’m just trying to see if there’s a good fit for both of us. I’m sure you’re trying to do the same thing. Now what kind of person would say that?
Female Speaker 1: A baller.
Ramit Sethi: A baller. Someone who knows, I have five other job offers going on right now. By the way, I know I’m so good that I know the money’s gonna come. In fact, the money’s gonna come. Let’s just deal with that later. It’s such a detail.
And you know what? To me, it is. And to a top performer, it is. But to a beginning or novice person, it’s not. The first thing they want to do is, oh my god, well, I made $40 an hour at the last one, so I need to be making $43 an hour, right? They want to talk about it. And when you start talking like that, what do I know? As a hiring manager, a very experienced hiring manager, I’m like, okay, gotcha. Gotcha. Because maybe I was prepared to pay $60 an hour. But you said $43. I’m like, sweet. I just saved $17 bucks an hour. Boom, right? So we make these mistakes way back here, never realizing that 80 percent of the work is done before we ever get into the negotiating room. Let’s keep moving on.
We’ve talked about the differences between theory and practice. And I just want to take a second to highlight that we did a lot of stuff about negotiation. If you go to iwillteachyoutoberich.com/creativelive, I’ve got a bunch of scripts for you, okay? And you’re gonna feel pretty confident reading these scripts. Everyone can read in their room. It’s great. But actually doing it – Sarah, how did it feel the first time you actually negotiated?
Sarah: Oh my god. I sent this email that said let’s in it, and it was like four sentences long instead of this flowery – well, I think we can do well together. And I was terrified. They had already made the offer. I knew that they weren’t going to say, nope, we’ll hire someone else. The worst they could do was sort of laugh at my offer and give a counteroffer. But I was so nervous sending this email in.
Ramit Sethi: Yeah, and it’s interesting, you did it via email, something I don’t normally recommend. But if it works, it works.
Sarah: Well, it was in a contract negotiation that they were sort of sending via email.
Ramit Sethi: Ah, got it. But the point, even still, sending an email, you were terrified. Negotiation is very scary. Now it’s easy to sit around and read these scripts and feel like, oh, I’ve read the script. That’s enough. Wrong. Everybody today can go and negotiate probably one thing. We could negotiate a service provider that we’re paying, a credit card, cable, gym, whatever. These things will change the way you think about taking control of your money, okay? So that’s what I mean when I say the difference between theory and practice.
All right. Let’s take a couple more questions if we have some more. I know we had a bunch in the chat room.
Female Speaker 1: We do always have so many questions for you.
Male Speaker 1: Absolutely.
Female Speaker 1: Go ahead.
Male Speaker 1: So Claire of Auray is wondering, my credit card got sold to another company in February. How long would you wait to negotiate with them? My credit report shows my history transferred over. And I think this generally, the question of when can you start negotiating with a company? How long do you need to wait to establish that relationship?
Ramit Sethi: Just negotiate now. What’s the worst they can say, no? Call back in six months. Yeah, don’t wait. February to now is a long time. I say just get going. Call them up. What else?
Male Speaker 1: I love it.
Female Speaker 1: Let’s see. A question from Michelle Totes Photography in Atlanta. How do you answer the salary question when you’re just submitting a resume, say online, and it asks for your salary requirements?
Ramit Sethi: Easy. N/ A. Okay? But what you’re gonna learn on Friday is that if you’re already submitting your resume through the front door through a website, you’ve probably already lost.
Okay? That’s a very –
Female Speaker 1: Good point.
Ramit Sethi: Yeah, it’s a very different way of thinking about resumes. Most of us believe, if I just send out 50 more resumes, maybe I’ll get a call back. Wrong. You can sidetrack the entire game and find a totally different way of doing it, okay? What else?
Female Speaker 1: Well, I just want to let you know that Flares36 says, I just called my gym and I got them to lower my membership by $5 and give me access to all of their gym facilities within the States.
Ramit Sethi: Beautiful. That’s really awesome.
Female Speaker 1: Real-time action being taken all over the world.
Ramit Sethi: That, by the way, even the $5 a month is better than dreaming about a $50 a month reduction, right? $5 a month. Okay, at least we got started. Now I bet you this person’s gonna call 10 other companies today. These companies don’t like me very much, by the way. All right, what else? Anything else?
Male Speaker 1: Kier is wondering, can you negotiate insurance? A general question, what can’t you negotiate?
Ramit Sethi: You can negotiate insurance. In fact, if you Google Ramit Sethi car insurance, you will find an actual script to negotiate your car insurance. That’s a big win because you’re paying it year after year.
You basically call them up and you say, look, what kind of discounts do you have available for X, Y, Z? And insurance is such a massive difference in price, when I compared my insurance that I was paying – I don’t know what I was paying. I’m gonna make up a number here. Let’s just say it was $300 a month. Insurance ranges from $99 a month to $900 a month. It’s a vast range.
So you can use that script on my website to figure that out as well. By the way, as we continue with these questions, anyone reading who has used my negotiation techniques to negotiate lower rates or higher salaries or higher client rates? I want to hear from the Web because we got an almost double your salary here. I know a bunch of people watching have used my techniques. So I want to hear from them as well.
Male Speaker 1: DesignDiva says, I’m in Canada, where cable and phone companies have a monopoly that makes them difficult to negotiate with. I agree with you that how much it costs for a company to acquire a customer, but it doesn’t appear to have enough weight over here. Any suggestions on what could be added to the script for that sort of situation?
Ramit Sethi: No, in some cases, you just can’t do it. So move on. Don’t sort of belabor it. Move on and just find something else, either to negotiate or how to earn more money or automate your money. Yeah.
Female Speaker 1: So I want to go back to the gender thing because I find that really interesting. And I find that with many things in life, just acknowledging what those differences are, being aware of what you’re doing, can lead you to make those changes, or just to be aware. So NewGirl says, does a woman need to pretend that she is a man to negotiate, or is there a feminine negotiation style that is just as powerful and respected in the business?
Ramit Sethi: Of course. Great, great question. No, you don’t have to pretend to be a man. Not at all. Some of the best negotiators I know are actually women. And they use their unique strengths. For example, women smile more. They’re more personable. I’m generalizing here, but I know – I’ll give you an example of smiling.
Remember how I told you I applied to 65 or 70 scholarships? So I wrote pretty good essays, but I started getting this interviews, and I would go on these interviews, and I was like, yeah, I’m so good. And I kept losing every scholarship interview. It just didn’t work. I just kept losing them, and I was like, what is going on? And I finally videotaped myself, and what did I learn? I learned that I wasn’t smiling, right? At all. I just didn’t smile that much. And once I changed that one tactic, everything changed for me. I started getting scholarship after scholarship.
The first thing I would suggest, and we’ll cover this on Friday, is videotaping yourself. You’re gonna be very surprised at how you come off versus how you think you do. Some women will smile too much. That’s bad because you’ll come off as a little flirty or giggly. That’s not good. Some won’t smile at all, and as she pointed out, maybe with the idea of being more masculine, you can actually have a nice blend.
You can be yourself, but you also want to be really cognizant of certain phrase you use, like can we do X? And be careful about focusing on the things that are about negotiation rather than, can you do this? No. Okay, bye. If I were to come to you and say, hey, I want you to shoot my wedding, or whatever, what would you say, if you’re not a wedding photographer?
Female Speaker 1: I would say I don’t have the lighting, and a second shooter.
Ramit Sethi: Good, good. I don’t have the equipment. Very good.
Female Speaker 1: Right.
Ramit Sethi: Now forget the wedding example. What are other ways that you’ve said, I’m not an expert to someone.
Female Speaker 1: I’m not as good as somebody.
Ramit Sethi: Very good. I’m not as good as X. Good. Drew, what do you got?
Drew: I don’t usually do this, I don’t usually shoot weddings, but I’ll do it. Aka, I’m not gonna be the best, but I’ll still do it.
Ramit Sethi: Okay, I actually like that. That’s a nice way of overcoming that mental barrier. I’m not usually X, but I’m gonna do it. We’ll talk about that. That’s very good. What else?
Female Speaker 1: How does that fit in with [inaudible] though?
Ramit Sethi: We’ll talk about that later. Yeah. I know you want to jump ahead. You’re the advanced student. Okay, what else?
Female Speaker 2: I don’t know enough about how to do that.
Ramit Sethi: Yeah. How about, I’d like to do that, but I need a couple more years before I get there. Right? Interesting. So what else? I mean, clearly there are other phrases we say. Everyone just nodded at that. Everybody chimed up. What else?
Female Speaker 1: I don’t have enough experience.
Ramit Sethi: Uh-huh. I’m too young.
Female Speaker 1: Too young. 22 years old in a city with all of these sort of writers in their 30s and 40s.
Ramit Sethi: They’re not gonna take you seriously.
Female Speaker 1: Yeah.
Ramit Sethi: Uh-huh. See, the language is so important. If I sit here and just give these slides, and say I’m not an expert, people are like, okay, that sounds fine. Check the box, move on. But when we talk and the actual words we use, everybody’s nodding their head. Did you notice that? Did you notice how when I put this slide up, everyone was like, uhh, and then when I said I don’t have enough experience, or I’m only 22, everyone was like, oh my god? What do we have on the Web?
Male Speaker 1: Ryan is saying, I’m still learning.
Ramit Sethi: Mm, really good. Okay, what else?
Female Speaker 1: Tagstreak Jet says, I’m afraid that by doing something I love, it will turn into just another job.
Ramit Sethi: That’s good. That’s not I’m not an expert, but that’s definitely a mental barrier. What else?
Male Speaker 1: Susan is saying, I can’t guarantee that I will be as good as somebody else.
Ramit Sethi: I can’t guarantee. What can you guarantee? Okay, very good.
Male Speaker 1: Emtree Hollis says, I’ve never been paid to do this before.
Ramit Sethi: Ah, I love it. Okay.
Female Speaker 1: Good one.
Ramit Sethi: These are so good because we’re getting way beneath the surface of the strategy or the mental barrier, and we’re actually understanding, what are the words we say? Again, I’m doing this because I want you to understand the importance of language, right?
You could go to a client and you could say, I’m easy, fast, and secure. And what would they say? Get out of my office. I don’t even know what you’re talking about. However, if you say, listen, I understand that I have my own three kids, and I know how difficult it is to take photos of them, because they don’t want to smile. Sometimes they’re irritable. Last week, I took a photo of someone who was vomiting all over the store. But I actually have developed my own way of reaching out to these kids, specifically kids between the age of two and four. And let me show you some photos I’ve taken. This little boy was crying for two hours. Then I did X, Y, Z. Look at the photos we got.
Oh my god. That mom just started to cry. She feels every fear handled. See that? All right, let’s keep moving on.
Male Speaker 1: By the way, if I could really quick, an interesting one. Grub says, I have dreadlocks down to my butt and people don’t take my appearance seriously. So that kind of is along that same lines of I don’t look like people think an expert looks.
Ramit Sethi: Yeah, very good, very good. I mean, that’s actually true for me. When I started off, people were like, who’s this guy talking about money who’s 23 years old, back in the day. And they wanted me to change the name of my site because iwillteachyoutoberich, frankly, to a lot of people, sounds like a scam. And that’s very true. I mean, how do you kind of get around that? We’ll take about that. Okay. Oh, look at this. I’d feel weird charging people for something I enjoy doing anyway. Or in other words, if I were to charge for this, I worry that I would hate it. Anybody here ever heard somebody say that, or maybe you said it yourself? It’s super common.
Female Speaker 1: Friends of yours. What do you mean, Yvonne? You’ve got a camera. Why don’t you just bring that along? Why should we pay you?
Ramit Sethi: Right, well, that’s a whole other thing about freeloaders. We’ll talk about that. I love freeloaders. Actually, I love showing you how to deal with them. Yeah, Drew.
Drew: I mean, I was just gonna say that that can be also an excuse for, I’m not gonna charge you because if it’s not good enough, then I’m gonna look like an idiot, and nobody’s ever gonna hire me again.
Ramit Sethi: Very good, very good. Lot of fear. Creatives are struck and paralyzed by fear that they’re not good enough, etc., etc. And ironically, they’re simply focusing on this area, never understanding the game that’s being played around them. The game of the client not even really understanding or caring about you being at this outer end of the concentric circle of being world-class technically. They probably – I’m not saying for everyone – but probably, they’d be happy if you’re here, good, not amazing, good, but you also understood their hopes, fears, and dreams, which we’re gonna get into deeply.
Lululemon could have understood my hopes, fears, and dreams, addressed it by putting up a sign that said men, and I would be a customer probably for a long time. But they didn’t. A video crew could have understood my concerns by not even talking about cameras in front of me, because I don’t know or care, and saying, Ramit, I understand that you’re on a tight timeline. One thing we can commit to in writing is that we will always turn around our videos in 24 hours. And if we don’t, I want you to charge us $300 a day in late fees. Boom. Charge me anything you want, signed.
But instead, people want to focus on getting to the outer end of the concentric circle, as if that is going to make them incredible. Anyone here know an absolutely amazing creative, world’s best writer, world’s best photographer, whatever, who can’t make a dime? Yeah, because they don’t know any of this other stuff that we’re talking about today. Okay. I love this barrier because it’s so weird. All these barriers are so weird, but yet so true. And what are we actually saying here? I feel weird charging. What we’re saying is exactly what your online friend said, which is I’m worried about succeeding because then I’ll have all these problems.
For example, if I actually do all the things Ramit is saying, I’m gonna be way too busy, and I don’t want that because I don’t have enough time as it is. Really? Could you potentially raise your rates so you could actually make triple the revenue in a third of the time? Yeah. You know what? It’s a good problem to have. That’s something every creative needs to remember. You want to have good problems. Good problems are too many clients because you could raise your rates and cut those out. Good problems to have are too many options, etc. So let’s not preoccupy ourselves with things that might happen down the road which are gonna be good, all right? Let’s stay in the present and deal with it when it comes.
Okay, next barrier. This is a big one. I hate selling myself. Let’s hear the words that people have used to describe this.
Female Speaker 1: I feel like a car salesman.
Ramit Sethi: Yup. Dawn, you look like you have one.
Dawn: I [inaudible] we were talking about with people who have done this before. It just feels so dirty, dishonest. It’s just gross.
Ramit Sethi: Good, good. What else? Talk to me about it. Megan?
Megan: I say that phrase. I say, I’m no good at selling myself. I’m not. And I’ve had people actually offer me money, and I’m like, no, I’ll do it for free.
Ramit Sethi: Yeah, very common, very good. All right, I like that. Kathy?
Kathy: This happens a lot, where people will be like, oh, I want this thing. And kind of similarly, I’m like, oh, I just kind of freeze.
Ramit Sethi: Um-hum. Anything from the Web?
Male Speaker 1: We do. CGuthrie is saying, I feel creepy.
Ramit Sethi: Uh-huh.
Female Speaker 1: And Ryan says, I hate being sold to, so I don’t want to do that to other people.
Ramit Sethi: Good.
Male Speaker 1: WolfX3 is saying, I was brought up not to brag about myself.
Ramit Sethi: Yeah, me too. That didn’t work out so well.
Female Speaker 1: Like selling out, right? We’re creatives [inaudible].
Ramit Sethi: Totally, selling out. This is, again, one of the weird pathologies of creatives, which is you’re selling out. And I want to tell you a story about this because I went through this myself, and it was actually very emotionally gut-wrenching.
So on my site, IWillTeachYoutoBeRich.com, I started it when I was in college. And it was a free site. I never monetized it for years and years. I believe it was three or four years. My friends, a lot of them went to work at Google. This is back in ’04, ’05. They were like, hey, put ads on your site. You could make a lot of money. And my thing was like, why? I don’t want to do that. First of all, is it gonna make enough to cover my rent? If not, why do I care? Second, I’m gonna spend all my time worrying about these monetization things and all this stuff, and not even worry about what I’m really good at, which is writing and changing peoples’ behavior. So three years, I didn’t monetize it at all.
I actually paid out of my own pocket, and I was fine with that because it wasn’t designed to make money. It was just, I needed to get this out to the world. Well, finally, I had a lot of readers. I had maybe 100,000 monthly readers at that point, or something. And I said, you know what? I’m gonna try something. I’m gonna create an eBook.
And I created an eBook. And it was maybe 30 pages. And I charged $4.95, which is so laughable because one of my most recent courses was $12,000, okay? $4.95, and I was petrified. In fact, if you want to read what being petrified looks like, Google Ramit Sethi 2007 Guide to Kicking Ass. That’s what it was called, all right? I was a juvenile young man. And you can see it in that sales copy. I’m afraid, I’m nervous. I literally said, why am I charging for this? And I actually went on to explain it. Like let me defend myself from you Internet weirdoes.
And guess what happens? People were like, this site jumped the shark. Oh, I see. IWillTeachYoutoBeRich means I will teach me how to be rich. I could find this for free on Google. All this crap. And it was like my worst fear coming true. But people were ordering. A thousand people ordered it. So I was like, what? All these chatterers who are telling me, you’re sleazy for selling a $5 eBook after writing free stuff for three years. I felt so unappreciated. And yet, there were all these people buying it.
It was very emotionally taxing, to tell you. So there have been two big emotional taxing parts in my business. The first was, for the first year and a half of my business, it wasn’t a blog. It was me teaching informal classes at Stanford, and everybody said they would come, and then nobody came. And it was really tough to go through that. So I started the blog. The second emotionally taxing part was this. And it took me another two years to really get my head around selling.
If you look at my new material, right? Anyone here from the Web? Let’s just hear if anyone here is an Earn 1K student, or a Dream Job student, or a No Stress Negotiation student. These courses are hundreds or even thousands of times what I charged for my eBook. And guess what? I feel way more comfortable charging for them. I never defend my price. I tell you, look, this is it. In fact, I don’t want half of you to buy this. This course is like a $3000 course. I’m like, you have credit card debt? You’re not allowed to buy it. And the tenor and the dynamic has changed so much because I’ve mentally gone along that road of being comfortable with selling.
By the way, my revenues are way higher, okay? And it’s great. No more emotionally taxed Ramit because I’m not even dealing with those clients. You understand? I have been super clear about who I serve, super clear about who I don’t. When we say things like, I hate selling myself, it’s just like the person yesterday who said, Ramit, this automation thing sounds great, but it sounds like you’re gambling. And do you remember my response? My response was, that’s coming from a place of fear. It’s not that this person has rationally, calmly read three books and evaluated the differences in asset classes. They’re just like, I don’t understand this, so I’m scared.
Like here. For all the people that have said, I hate selling myself, selling is sleazy, slimy, scammy, I feel dirty, have they ever taken one class on sales? Have they ever studied marketing? No. What we do is we immediately jump psychologically to the worst thing we can imagine. Some dude with really sleazy slimy hair coming up to you at some party like, hey, here’s my business card. We should talk. You should buy this. And we’re like, I don’t want to be that guy. But that’s not real sales. That’s not real marketing. Again, my courses are quite expensive. And my students love to pay it.
When I do consulting, which I almost never do, I charge an extraordinary rate. They’re happy to pay it because I was able to listen, connect, understand what value they wanted, and overdeliver. Selling is almost the last thing I do. And that’s what we’re gonna learn today. So let’s throw it to the Web, and let’s throw it to reactions from here as well, and see what people think about that.
Female Speaker 1: I feel like I’m completely stuck in the first circle.
Ramit Sethi: Yup.
Female Speaker 1: When you shifted from a point of selling an eBook for $4.95 to somewhere close to charging three grand an hour for consulting, did you feel like you had hit your external challenges? Had you checked off those other circles? Were you there?
Ramit Sethi: It took me years to get these checked off.
Female Speaker 1: But had you challenged yourself by learning the things that you didn’t know yet before you transitioned to saying, I’m this expensive?
Ramit Sethi: No. I went up a gradual path. We all go up. Look, if you’re charging $30 an hour, you’re probably not gonna charge $300 an hour next month. You’re going to go $30.00, $60.00. At each level, you’re going to have to understand different types of clients, and you’re gonna have to develop your skills.
The skills that I have at $3,000.00 an hour are very rare. That’s why I can charge it. And I also deal with a very small amount of clients who can afford that, or who even see the value in it, right? But when I was back charging $20.00 an hour, that’s a whole different client base. They want different things. They speak in different words, right? A $3,000.00 an hour –
I’ll tell you an example. I recently did a small consulting engagement. Again, I do maybe one or two a year. The money’s really not even that attractive to me. It’s about making a big change. And frankly, I would make more money spending that time working on my own business, okay? Which tells you what kind of business I’ve built.
So I worked with this gentleman who’s a pretty senior guy in New York. And the sales process was less than two minutes. He knew what I do. He knew what I kind of do on a day-to-day basis. He said, listen, would you be willing to come in and talk to my team about this? I said, sure, I’d just charge you my normal day rate. He said, what is it? I told him. He said, you charge that much? I said, yeah. I have a very rare skillset, and for the right type of client, it makes a lot of sense to pay that. He goes like this. Okay, send me an invoice by this afternoon. And that was that.
So that is what happens at a $3,000.00 an hour level. He’s not debating me. What time are you gonna show up to my office? All that is assumed that that’s gonna work. But for a $30.00 an hour client, you’re gonna be having agreements in place. You would talk about what time are you gonna show up, how soon are you gonna deliver this, right? It’s a whole different thing. At a different level, as you move up that value chain, you’re just gonna assume that someone who charges that much is gonna get it down.
And by the way, I overdelivered to him, right? He said something to me. He said, listen, would you be willing to come in a second time if we need you in? Which would have exceeded my hours. Do you know what I said? What would a $30.00 an hour consultant say? No, we’re gonna have to write that down in a contract. I’m gonna have to bill you, bill you for my time, bill you for my taxi. What did I say? Of course. Because it’s about building a long-term relationship. Let’s not overfocus on the $3000 an hour thing. Let’s focus on what we do today and how we can grow our business. It’s very different.
My point to you is at each level, as you move up, which you will – by the end of today, you should be able to increase your rates by 30 percent, easily. Easily. You will experience different types of clients, different needs, different language, and you’ll have to adapt. So when I charged $147.00 for a product, or whatever, that was different. When I charged $12,000.00, it was totally different, okay? All right. Let’s go to the Web. What do we have? And we’ll come back to you, Kathy.
Female Speaker 1: I love what Susan says. She says, it makes me think that if I’m comfortable with my prices, I can be okay with them saying no thanks.
Ramit Sethi: So good. We’re gonna talk about that today. Yes. You’re not gonna serve everybody. What else?
Male Speaker 1: Along the same lines, Peter V. says, just because I wouldn’t pay that much for my own services doesn’t mean someone else wouldn’t. Fear and regret [inaudible].
Ramit Sethi: So good. What else? Kathy, you had one?
Kathy: Yeah, so I noticed shifting from – I was in corporate sales, and I didn’t give a shit. And I’d be like, blablabla. So from moving from corporate to small business and something I really love, I had a lot of fear, and I still do have a lot of fear around – I care so much about this thing that I sometimes forget it’s a business, and you’re just building relationships versus selling.
Ramit Sethi: That’s right. Yeah, you’re adding value. And we’re gonna totally change the dynamic. Again, a lot of us jump to the idea that I have to sell someone. I have to convince them of 800 reasons why they should use my services and not go to all these other cheaper photographers or writers. The truth is, if you’re playing that game, you’ve already lost. You have already lost.
What you are doing – if that’s your problem, if you go in to clients – listen up carefully, everybody, especially online. If you’re going into client meetings and you find yourself almost arguing, saying this is why I’m worth it. This is what I do, look at me. Yeah, you could go to those other guys, but this is what I do, you’ve already lost because you’ve already missed the entire game of what are you needs? Of asking without selling, which I’m gonna show you how to do. I’m actually gonna do hot seats where I bring people up and we do that.
You’ve already lost if you’re sitting there debating price, okay? When I sell, I’m like, listen. Take it or leave it. This is what kind of value I can add to your life. Here’s all the people that have benefited. I understand your concerns. I understand them better than even you understand them. And they read it and they’re just like, oh my god. This guy is like my mother. He knows me. And take it or leave it. And by the way, this thing is gonna close at a certain point. So we’ll talk about that. You had one, Megan.
Megan: Yeah. I think it’s key, what you said about overdeliver, because when Sue Bryce was here, she kind of spoke to that. And she was saying she charges $3,300.00 for her portrait package. And somebody asked the question, well, would you ever charge more? Because they were kind of wondering, could she make more money? And she was like, well, not until I feel like I can deliver a product that’s worth more than $3,300.00. I mean, because she already felt like she was delivering all that she could. And she was overdelivering for the price that she was charging.
So she really drove that point home that you have to value the product that you’re offering. You’re not some hack that’s trying to convince somebody, oh, I’m good enough, I’m good enough.
Ramit Sethi: Yeah. So love that point. Love it. Overdelivering can be – what most creatives think is, I need to overdeliver by taking a higher resolution photo, or whatever the hell you say. Writers think, I’ll deliver an extra 10 words, or whatever. It’s irrelevant. You should be delivering an amazing product. You need to be doing that, otherwise get out of the game.
But over delivering can be things like, you know what? I’m gonna include a complimentary DVD for you to share. I’m gonna include – I’m gonna come back to you six months later and do a photo refresh for free. I’m gonna come to your office instead of you having to come to mine because I know you’re a busy executive and I understand your needs. That’s overdelivering. And at that point, you can charge a lot.
Your clients will love you because you actually understand what no one else does. Everyone’s sitting there saying, I’ll give you five photos instead of two. I don’t care. You’re actually addressing my needs. So all of these things are about overdelivering. For my courses, my goal is to overdeliver at least 10X, sometimes 100X. I charge a very extraordinary rate, but I want to deliver much more than that as well. So that’s absolutely key. Okay. Let’s take a couple from the Web, and we’ll move on.
Male Speaker 1: So a couple of people have been saying that they get it, but they’re just hardcore introverts and have a hard time talking to people.
Ramit Sethi: I have introverts. In fact, I’m gonna do a case study right now. And then we have one introvert tomorrow who’s gonna come on. This guy, he’s amazing. He’s not particularly the most socially skilled guy. He’s even said that himself. And you’re gonna see that you don’t have to be Mr. Extroverted, Mr. Networky to do it. No. There are plenty of people who even work with me who are just – they’re very quiet, and they don’t get their energy from being around people, but they know how to ask the right questions and deliver value. Some of them are more comfortable emailing me proposals. That’s a way to get around that as well.
What I’m gonna challenge you with is the person who said that, they’re immediately jumping to all these conclusions. Like I can’t sell myself because I’m not so fluent with words, and I get nervous, so I could never do it. Wrong. A better way to think about that is, okay, one of the areas of weakness for me is I get a little nervous around people and it drains me. So what are my options? One, I can practice. How many of us actually do that? No. 2, I can go around that problem by emailing people instead of going out to meet them. Etc., etc., right?
So instead of making it a total weakness, let’s turn it into how do I get around this? How much should you charge? Huge questions on charging and raising rates and stuff like that. So my suggestion to people is really start out with an hourly rate, okay? This is controversial stuff, but this is what I’ve found to work for my students. Start off with an hourly rate.
I like to understand the scope of what my competition charges. So let’s say I’m a photographer, or let’s say I’m a writer, and my competitors, which I’ve looked around at, they charge anywhere between $30 and $45 an hour. Okay, let’s just say. So I’d probably try to charge right in there around $40 an hour. Not the highest end of it, but pretty high. Why? Because I’m going to be doing valuable work that’s gonna be way more valuable than other people. Other people are gonna be here in the laborious tactics of their craft. Well, my craft is good and getting better, but I’m also gonna be doing all these other things that my editor cares about, like being interesting, like driving page views, like blah, blah, blah.
So I don’t want to charge at the highest, because if you charge at the highest part of your range, then people are gonna be like, hey, why? Why are you charging so much? But over time, you will actually often be able to charge the highest and even higher, like Dean, or like other folks who charge even astronomically high rates.
Does that make sense? Okay. You will have to deliver value. You will be able to raise your rates. But this is a basic framework for how much to charge, all right? And you can find how much people are charging online. You can just Google that, okay? Very simple.
We’ll get back to some of the questions, but I want to work through these quickly. Oh god. Should you ever work for free? Okay. Creatives want to kill me right now already, and I haven’t even said anything on this slide. Because they throw around words like spec work is evil, oh my god. You’re destroying and keeping the man down, blablabla.
You don’t know what you’re talking about, okay? Free work can work strategically. You do not want to go around to everyone and be like, yeah, I’ll work for free because you’re gonna devalue yourself. And who cares about devaluing the field? You’re gonna devalue yourself. This is not a political discussion. We’re talking about ourselves and our business here.
However, free work works when done correctly. I know because I’ve done it, and it has dramatically accelerated my career. And many of the people who work for me worked for me for free. This is early on. And I ended up hiring them, and they’ve been paid lots of money.
So when do you do free and when do you not? You do free if you can ascertain that the person you’re trying to work with has some characteristics, like they are massively influential. Like for example, a New York Times columnist who has connections everywhere, or a blogger with 500,000 readers a month, okay? Or an author. I’m not trying to say come work for me for free. I don’t want anybody to pitch me right now. But there are a lot of people, or a really famous photographer in your field.
But what do you do when you work for free? You don’t want to just say, I’m gonna work for you for free forever. You say, listen. I’m a huge fan of what you’re doing. I really like the new magazine that you’re building. My normal rate is actually $55.00 an hour, but I’m such a fan of what you’re doing that I’d like to build a portfolio, and I want to help you grow this magazine, especially with your launch in the next one month. So if you’re willing, I’ll be more than happy to actually do this project for free, with the understanding that once we’re done, you give me three referrals to other people you know. Or, with the understanding that if I do an extraordinary job, we go back to my normal rate.
Okay, so what happened there? I told them what my normal rate is. I said I’m willing to work for free under these conditions. In other words, I’m taking the power. I’m not letting this guy, some freeloading guy, tell me, oh, you’re just a writer. You’re working for free. Never. I would never do that. But I would take the power in the relationship and say, you know what? I’m willing to work for free because I need X, Y, and Z. I need a portfolio piece. I need a recommendation from you. I need this. If you’re willing to agree to that, I’ll be more than happy to do it. Does that make sense?
Female Speaker 1: Um-hum.
Ramit Sethi: Is that surprising? Anybody doing death threats out there? What do we have?
Male Speaker 1: There were a lot of people who were just laughing when you said, should you work for free? But then people were saying, I’ve done it for nonprofits that I previously selected. Only if it’s worth something to you in the long run, in exchange for referrals, I do trades.
Ramit Sethi: Great, very good. All these things are great. Notice that the people who complain about free work and spec work, they don’t even understand how this works. They’re off complaining about this game, but they don’t understand the game is, sometimes if you’re finding that your clients don’t trust you because you have no portfolio, you have to do whatever it takes to get a portfolio. And that might mean working for free for one or two clients, doing an amazing job. And now you have your portfolio, and you’re off to the races, right? Comment?
Female Speaker 1: Can I share a story about that?
Ramit Sethi: Yeah.
Female Speaker 1: So I had a failure with this and a success with it. So my massage therapy business, when I first started, I was all nervous. I’m like, what am I doing? And I would give things away for free, completely devalued, lost so much money, took so long to raise my rates, etc. So starting that business.
Now I’m transitioning to kind of helping people with marketing and creative project management, and I’ve worked for free for a year for my mentor and advisor. That has led to a portfolio of a great site and a great start. And but he connected me with a political strategist. And then this job came up with a company, and because I had this team and worked for free on this portfolio, I now had a decent proposal. I could be in the game and in the conversation for a new field which was outside of the other one.
Ramit Sethi: Beautiful.
Female Speaker 1: So I think it’s totally worth it.
Ramit Sethi: You’re working step by step. I love that.
Female Speaker 1: Yeah.
Ramit Sethi: When I was doing research at the Persuasive Technology Lab, my professor said to me, do you want to take this for credit or for pay? And I said to him, what do you suggest? And he said, honestly, I would take it for credit, because if you do it for pay, then I’m just gonna have to give you a bunch of menial work. But if you do it for credit, I’m gonna actually teach you a lot of stuff. That really shaped the way I thought about it. There are more valuable things than money in the short-term. Way more. So really think about it.
And another guy who ended up working for me, helping with my book launch, a guy named Charlie Hoehn, he came to me and he pitched me all these things. He was like, hey, I think that your videos could be improved. In fact, I already did it. Here you go. Take a look at this video.
Now why did he do that? Would he do that for everyone? No. He knew that I was about to have a major book launch. He knew that I would probably have connections to other people, and indeed, I sent him so much business, he didn’t even know what to do with it. So you want to work strategically with the right people. Not always for free, but in certain cases, it can make sense.
All right, let’s keep going. And if anyone has any questions, think of them now because we’ll have about five minutes for questions at the end of today. And of course, we’re gonna be back here tomorrow.
All right. So I believe this is the last one here. How to go from one client to many, or three clients to many, whatever. One thing I like to do is a referral strategy right when I agree. Notice that I’m taking a lot of concessions from the client, because if I’m a top performer, I’m like, all right, fine, I’ll work with you. But you have to agree to a couple things to work with me. That’s what a top performer does.
Now you’re not being condescending about it. You’re being really polite. Say, listen, one thing I do is – I just want to see if this works for you, but whenever I work with a client, I make an agreement that if I do an extraordinary job, they agree to refer me to three people at the end. Does that work for you? And of course, they’re gonna say yes because first, you have to do an extraordinary job. You’re actually holding yourself to a higher standard, and then you’re getting referrals at the end.
The other thing is, remember when we did the ask without selling technique? So I’ve interviewed 20 moms or 30 people who want personal organizers. I didn’t sell them on anything. I stay in touch with them. I have a little templated email, stuff like that. And at the end, I might say, listen. I actually decided, based on what you told me when you recommended I talk to Sue, that I think I really want to do this personal organizing. So I’m actually launching a service. I’m probably gonna put up a website in a couple days. But do you know anyone I should talk to? Anyone that might be interested in discussing having a personal organizer?
Well, if you do that to 20 people, how many referrals do you think you’re gonna get? A lot. So these are easy ways to go from three or four clients to many, many, many more. Dean talked about it in detail. We cover it in detail in Earn 1K. But basically, if you have clients, you already have a gold mine to go forward with. You can ask them how they found you, what sites do they read, where do they go, and then you go there, and you present yourself.
Male Speaker 1: Mika is wondering, when asking for referrals, do you ask these clients to talk to the potential clients first, or do you cold call these referrals based on the referral itself?
Ramit Sethi: Well, that’s a good question. If they’re willing to do it – you always want to respect the client. You say, what would you prefer? Would you prefer to send an introductory email? I can actually write it for you if you want. Or would you prefer that I just use your name when I reach out to them? The client’s probably busy, so whatever they want is what you do.
Female Speaker 1: Okay. A question from Adrianne Farr in England. How do you research what your competitors are charging when many of them do not discuss their prices until they’re trying to close a sale?
Ramit Sethi: I mean, if you know your market – it sounds like you don’t really know your market.
Female Speaker 1: Well, that’s very relevant for photographers.
Ramit Sethi: Yeah. There are places – if you know your market, you’re gonna have friends who are in the market who are gossiping about this stuff all the time. You’re gonna see it in blogs or forums. You’re also gonna just have friends who have personal relationships who are like, man, did you hear what they closed that deal for? That’s a great way to do it.
The other thing is, you want mentors. So mentors and advisors, something we’ll talk about tomorrow, those people are deeply connected to the field. You might be starting out. They’ve been in the field for 20 years. You’re like, listen, I’m really stuck. What are people charging? I don’t understand how to think about my pricing. They’ll be able to tell you because they have their finger on the pulse. So if someone comes to me and they ask me about pricing in a specific area, and it’s an area I know, I’ll be able to tell them because I’m deeply in that market. So getting advisors and mentors beyond relationships is critical.
Male Speaker 1: That’s great. Sid’s Design is wondering, what about if I charged a certain amount and booked a bride, and then eight months later, doubled my prices? The bride referred me to another prospective bride and told her how much she paid. Do I give her my new prices or the prices that I gave to the original bride?
Ramit Sethi: New prices, but you have to explain why. You can’t just jack up your prices and be like, hey, that’s how it goes. You say, look, I appreciate you reaching out to me. I had an amazing time shooting the wedding with April and John. Remember, you’re not jumping into pricing immediately. Too many creatives are jumping into pricing. Pricing is the last thing. And if you do it right, the kiss, everything has already been done. It’s been done right. The kiss is almost like; you know? It’s like it’s already been decided. It’s not even a thing.
So if you’re concerned about pricing, my guess is you’re messing it all up over here. You’re not connecting. You’re doing commodity stuff. You’re rambling about yourself. But you also need to explain why. And of course, she’s gonna be alarmed. Wait a minute, I thought you charged three grand. You’re charging me six grand? Well, I’ve actually grown my business since then. Since then, I’ve added three additional services. Because if you’re charging double, you need to be adding more value. So one of the things that you’d be getting that’s new is X, Y, and Z. And I’m also happy to do this as a complimentary service to you. Remember, if you have that much margin, you can throw in a little bit of sort of bonus material for free.
Female Speaker 1: All right. Oh, we have a question in the audience.
Ramit Sethi: Yes.
Female Speaker 1: A tag question to that. In photography, there are a lot of clients who are solely price-driven, and they may have looked at your web presence, blog, website, Facebook, whatever. But when they come to you, they ask wedding or portrait or something, but they go directly in for the price kill. How do you take them back to the first kiss before you –
Ramit Sethi: I don’t deal with those clients. People do that to me sometimes too. I mean, first of all, you’ve probably not conveyed value on your website. Second, you’ve probably had them email you. The first email saying, how much do you cost?
Female Speaker 1: Hi, we looked at your site. We were interested in what your prices are.
Ramit Sethi: Yeah, they’re price shopping. And if you want to be that service provider, then you can answer them. If not, you say, you know what? This is what top performers who charge really high prices will do. They’ll say, well, I really need to understand your needs first. And they don’t just say that to back you off. They actually want to know; what kind of wedding do you want? Etc., etc., etc. If you just answer their question, you’re not doing them a service.
But also, I’m really comfortable – people will ask me that, and I actually say to them, if price is your first question, this probably isn’t right for you. But then again, that’s all part of – it’s very congruent with how I am, right? I’ll just call people out, and they know that. So if someone comes to me and the first question’s about price, I know they’re not gonna buy. I know it.Because if you simply look at my price, you’re like, wait a minute. I could get something similar for one-tenth the price. You can’t get the value.
So there are price shoppers, and you’ve got to be really careful about simply answering them. You want to ask them why, what are your needs, etc.? And if you find out their needs are, I’m just looking around for the cheapest price, well, you know what? I really appreciate that, but I’m probably not the right photographer for you.
Female Speaker 1: So do you recommend not having pricing on your website?
Ramit Sethi: That depends. Some people do, some people don’t. If you’re charging a super premium price, you’ll discover that many or most providers don’t, all right? If you have a price, it’s really easy to compare. I don’t understand what the difference is between $400 here and $200 there. How can I? I’m just a client. I don’t live in your world. And it’s your job to teach me. Not my job. My job is to simply compare, like a menu, who’s got lower prices. That’s what I think. But your job is to show me the aspirational side, the experience. Why you understand me better than anyone else. Okay.
Male Speaker 1: I can actually back you up on that. I am currently wearing shoes that are about three times what I had planned to pay for shoes when I went to buy some. But before I tried them on, we didn’t talk about price. The guy just grabs them, was like, here, put these on, walk around in them. And I looked at him. I’m like, I love them, and I walked out with them.
Female Speaker 1: Literally.
Ramit Sethi: Literally. Anyway.
Female Speaker 1: Okay, so next question is from DC3. For hourly consulting, is it better to price in packages and let people cancel at any time than simply to price hourly to start with?
Ramit Sethi: I like to start hourly. I know this is controversial, but I like to start hourly because it’s really simple. With Dean, you start at $30.00, and you just quickly find out, the market will tell you. If you’re reaching out, actually, most creatives don’t reach out enough. They’re like, oh, well, I reached out to two people. I’m like, try 10Xing that. Try reaching out to 20 people a week, and the market will quickly tell you if you’re pricing right or not. It’ll quickly tell you stuff like, are people actually listening to me? Are the words I’m using resonating?
So I like the hourly thing. Once you nail that hourly thing, once you nail it, you know I’m in my sweet spot between $55.00 and $65.00 an hour, then you can start doing packages. And those packages, like Jackie did, those will actually take you higher and higher, and actually add more and more value. But you’ve got to first nail the foundation before you start going to all these fancy packages. Let’s take a couple more.
Male Speaker 1: This might be a quick one. Mika is wondering, can a creative like a musician or actor use the same three steps to generate leads for gigs and landing movie roles?
Ramit Sethi: Yeah, that’s a softball question. Yes. No, of course they can. It’s a little more difficult because entertainment has such a supply of people who just will do anything for low rates. But there are certain techniques you can use that we talked about today and tomorrow about building relationships and side-stepping the entire game. What else?
Female Speaker 1: Oh, I thought I had a hand raised over there. This is from Derek. Do you have to tell a story to convey emotion every time you’re pitching a client?
Ramit Sethi: Almost every time. I didn’t learn this for many years. But the power of narrative has been incredibly strong. We want a story. Even products that shouldn’t have a story but do. Pick up the book The Power of Habit and read the chapter about Febreze, and how that was gonna be a multi, multi-million dollar failure until they found that story. It’s not false, it’s true. Look at the story of Listerine. Look at the story of all these classic commodity products that actually sell for five, six, 10 times the price. And actually, people experience more value because of the narrative.
The story and the narrative is absolutely critical. You don’t just come to my site, see a list of products, and then buy something. I don’t even put my products on my site. I don’t even think you can buy anything right now. Because I want you to go through the entire experience. I mean, think about the experience of walking into Tiffany, the jeweler, versus somebody at your mall. You’re gonna get champagne, you’re gonna be pampered. You’re gonna have a very sort of high class person, probably a woman, showing you around, really telling you what looks good. Also saying, you know, I probably wouldn’t do that if I were you. Totally different experience.
Now are we all Tiffany? No. But we are all trying to think about how to add more value to our client’s lives. If we do that and we do some other things correctly, then the money will come.
Advertising technology. Why? Why this?
Male Speaker 1: Well, I’ve seen a number of people that I know closely follow advertising. They absolutely love it. And I want to find something that I actually can follow and love for my first career.
Ramit Sethi: Okay, good, good. Better. Try this. Try this. I actually thought about that a lot. And when I was first deciding where to work, I looked at both industries. I actually went out and researched it with 10 or 20 people from each industry. But when it came down to making the decision, I thought back to when I ran my Russian frat.
And actually, that is like 25 people. And one time, we had to figure out a way to generate $75,000.00 of revenue by next Tuesday. Hey, can you actually imagine having to do that with a bunch of college kids who don’t even know what they’re doing? So we actually ended up using advertising to drive a ton of revenue. And we were able to send $60,000.00 to the local charity hospital. To me, that’s when I realized the power of advertising, and that’s when I knew that I wanted to work here. And after I started doing my research, Acme beat was pretty much the only choice.
Male Speaker 1: You make it look really easy.
Ramit Sethi: Well, thank you very much. But what did I do there, right? The smile – and I’m not a smiley guy. Actually, I told the Creative Live staff to remind me to smile, because I actually still find it a struggle to smile a lot. That’s true. But what did I do with the smile? What did you notice while I was smiling?
Male Speaker 1: It made it a lot easier to have this conversation. It wasn’t like an interview. It was more like just a conversation.
Ramit Sethi: Yeah. And I completely disarm – or you, when you smile, completely disarming. In fact, you almost short-circuit me neurologically. Not actually, but you almost short-circuit me when you smile. That’s why I said, it almost doesn’t matter what you say, because when you smile, you actually connect on a totally different level.
And you know who knows this really well? Women, because they smile naturally. And they can see your reaction instantly, right? They see things that men don’t see, for a variety of biological reasons, and social reasons, too. So guys, and that’s the reason I wanted to bring you up here. One of the things that really tests guys is body language. And body language can be this, because we tend to sit back. Our legs are really spread. And also just smiling. We’re like masculine dudes. And when I talk about smiling, you’re kind of like, hey, this is kind of weird. This is like a little bit weird. But actually, it’s very important.
So I’m not saying grin like this all the time. I’m saying use it strategically because what I did was I took that smile. Who noticed what I did with the smile? I talked – what did I do?
Female Speaker 1: You smiled a lot more in the first half than you did in the second half. And interestingly, I looked around the room. We were all smiling back watching you.
Ramit Sethi: You can’t resist it. You cannot resist smiling when someone else smiles in a genuine way. What’s that doing? It’s instantly making you connect. And I smiled. Now watch what I did. I smiled and I said, it’s funny you mention that. And I said, I was deciding between these two. I researched 20 people, subtlely showing that I do a lot of work. And then it made me remember back to my Russian frat, which I ran, and we had to raise $75,000.
Now it’s a pretty emotional topic. And then I make a quick little G-rated joke. Can you imagine doing that with a bunch of college kids that don’t know what they’re doing? And the guy’s like, hahaha. But it’s not an X-rated joke. It’s a G-rated joke. We can all agree, haha, that’s funny. At least this guy has a sense of humor. Move on.
So then I Was like, we had to raise $75,000, and this is how we did it. And we did advertising. I was able to give $60k to the hospital. That was a nice little – I made that up. But it became clear that there was only one choice. I mean, the guy’s like, Jesus, sign. Here’s the offer letter right now. But it’s not just what I said, right?
And obviously, I have a lot of practice doing this. We can all get really good. But what I’m highlighting here is the power of the narrative. You can brag about yourself without bragging. I bragged about my accomplishments in a story, right? We’re gonna do one more question and then we’re gonna wrap it. It didn’t seem like bragging, did it? I mean, a little bit. I probably come off a little bit more, let’s say, cocky than the average person in an interview. I know that, I acknowledge it. I have to consciously work with that, smile, kind of self-deprecate, because I know myself.
Other people know that they come off as too self-deprecating, so they have to actually pump it up. So know yourself and manage it.
All right, we’re gonna do a couple more questions here, one or two. We’ll say – this is a tough one, all right. So Drew, what is your greatest weakness?
Drew: Ooh. That’s a tough question. I would say my greatest weakness is – wow, I really gotta think about that. Can I ask you a question first?
Ramit Sethi: Sure.
Drew: Out of it?
Ramit Sethi: No.
Drew: All right. This is tough.
Ramit Sethi: You can ask me a question as your interviewer, though.
Drew: No, I don’t want to do that.
Ramit Sethi: Okay.
Drew: I would say my greatest weakness is having a tendency to do too much, and doing too much work. There’s always a deadline, and there’s always an amount of work you need to do. And sometimes, I surpass that and do too much.
Ramit Sethi: Okay, stop right there. Who here believes that answer?
Drew: No one.
Ramit Sethi: You don’t even believe it.
Drew: It’s because it’s not true. You have to give me a second to think about it.
Ramit Sethi: I know, I know. Okay, so this is an answer every single person – now, this is an answer that everyone needs to prepare to answer, a question you need to be prepared to answer. You didn’t believe it. We knew you didn’t believe it. We didn’t believe it. So I want to highlight this. I’m not coming down on you at all. This is a tough question.
If you bullshit your way through an interview, they will know. An interviewer is way more skilled than you. He sees more interviewees than you can imagine in a day. So do not try to lie. Do not try to take my Dream Job scripts and make them your own if they’re not true, all right? The point of this is to make it your own. Who here has a good weakness answer? Go ahead.
Female Speaker 1: So I’ve dealt a lot with being an overcommunicator. There are times that I think it’s important to give a lot of information, and there are times that I think it’s important to do your job and deliver the deliverables, cut the fat. I’ve noticed that in myself, and it’s something that I’m working towards. And I’m excited to deliver the optimal amount of communication in our relationship together.
Ramit Sethi: What do you guys think? Wow, applause. I think it’s actually pretty good. I’m gonna tweak that a little bit, but you actually followed the structure almost perfectly. Okay, what people don’t realize is when someone’s asking for your greatest weakness, what are they really asking? They want to know what your weakness is, yes. In fact, every interview question follows the same pattern. They want to know the answer to the question, but they want to know the deeper answer. They want to know your key message, okay?
So when I’m asking about your weakness, what I really want to know is first of all, that you’re knowledgeable enough to acknowledge that you have a weakness. Everybody ahs weaknesses. Top performers, the best people I know. The best people I know. They are so candid about their weaknesses. They’re like, well, you know what? I’m actually good at a couple things, but I’m pretty bad at a few things. And then they want to know that you are self-aware enough to be working on them to improve it. Now you just said you’re working to improve it, but that’s generic. You need to show me. So let me try to say that back to you, okay?
Female Speaker 1: Sure.
Ramit Sethi: Why don’t you ask me the weakness question?
Female Speaker 1: So, Ramit, what is your weakness?
Ramit Sethi: Well, there’s a lot. But one of the ones that I’ve really noticed in the last couple of years has been that I tend to overcommunicate sometimes. So for example, I might have a senior person, like my senior manager at my last company, he might say, listen, I need this by tomorrow. And I will ask him, I understand that. Can I also add this? Can I also add that? What about this? Will you need this as well?
And a couple of times, I noticed him being very curt with me, just saying, look, just send it to me, okay? I have other things to do. And that was when I kind of started paying attention to knowing when to give the right amount of information. Sometimes you actually need to send this much. Sometimes you don’t need to send this much.
So a couple things I did to try and improve that. One, I actually went to a Dale Carnegie Institute. And I attended that. And that really helped me learn X, Y, and Z. And the other thing I’ve been doing is just paying attention to the senior people at my company, really studying how they communicate. The emails they send, sometimes they’re short, and sometimes they’re this long. They intuitively know how long to send. And I’m just learning that. So it’s something that I’m definitely working on. Hopefully in the cover letter and resume and emails we’ve exchanged, you see that it’s something that I’m certainly trying to improve on.
Okay? So. You don’t have to applaud me. This is what I do for a living, so don’t interview me. So I think I actually messed up at the beginning. I said, there are so many. That was just nervousness. I don’t need to say that. That’s self-deprecating. This is an interview. This is not Mr. Ramit Sethi’s therapy session, all right? So I overdid that. That was not good. I thought the rest of it was good, but I thought it could have been improved. It was a little long. What do you guys think? What did you notice in that answer?
Female Speaker 1: When you ask this question, you’re establishing three really clear facts in the candidate. Are they self-aware? Do they know themselves, strengths, weaknesses? Secondly, can they be proactive once they identify it? Do they crumble when there’s a mistake, or are they willing to take action and fix it? And I forgot the third, sorry.
Female Speaker 2: Something I noticed as well, just picking that up, is that I think, especially younger people, right, Drew? When things happen to us at work that are negative, like the terse emails, how many of us just sit around and bitch about it? And we’re like, this person’s terse to me. This sucks, this company sucks. I liked what you did where you said, I noticed that this was happening, and I looked internally for the answer.
Ramit Sethi: Yeah. Taking responsibility. Super high competence trigger. Top performers always do that, always. They’re like, look, I could blame a million people, but there’s one person I can blame. We’ll go to the Web in one second.
The key thing I did there that nobody quite picked up on was I told a story. You cannot stop listening to an engaging story. Humans physically cannot stop listening to an engaging story. I took you along that path with me. And at each point, just as I did in the earlier frat, you couldn’t stop listening. Now, the story wasn’t that interesting, really. I had a frat, $75k, I mean, whatever. But I had pauses. It got emotional.
Same thing here. I took a Dale Carnegie Institute – by the way, that brought down the house in this room. Everyone was like, Jesus, this guy just – how did he do that? I made it up. I made it up. So it’s easy to make it up on the spot, right? It’s easy with a lot of practice. But what could you do to address your biggest weakness? Everyone right now, you know that you’re gonna be asked in an interview, what is your greatest weakness? So what are you doing proactively to fix it? You could take a Dale Carnegie Institute class, all right? You could take this class. You could buy the recording of this class and watch it and practice it again and again, okay? So there are many things you can do. Or you can sit around and do nothing and be unprepared for the question.
So the main points there were the story. We’re gonna do one last question. The main points there were the story. I told a story. And you came along for the ride, and I wrapped it up with a tidy bow at the end. Something you will learn with practice. Okay, last question. You know, Drew, I’ve really enjoyed talking to you today, but I’m gonna be totally candid with you. I have a lot of applicants. There are some people who have more experience than you. There are some people who, they may have a better GPA than you. Why should I choose you?
Drew: Well, I’m a very quick learner. In college, it would take me – it would be easy for me to help out my friends because I would learn things quickly. Over the other candidates, I think I stand out because of that fact. I’m losing it right now. I’m completely trainwrecked.
Ramit Sethi: It’s okay. Pick it up from the top. Why should I choose you?
Drew: Okay. I stand out because I’m a very quick learner. Other people may have a better GPA, or other people may be more qualified, but I think that since I’m a quick learner, I can come in and I can really get ahold of things quickly. I can learn what I need to learn. I can give you what you need. Yeah.
Ramit Sethi: Okay, all right. Thoughts? How’d you feel saying that?
Drew: Not great.
Ramit Sethi: Okay, why?
Drew: I had no idea, but it just didn’t feel good.
Ramit Sethi: It didn’t feel right. You ended on kind of a dot dot dot, right? One thing I learned from my mentor, BJ Fopp, he said, at the end of a presentation, some experts say don’t say thank you, because the audience should be thanking you, or whatever. He’s like, end on a strong note. I learned this with a lot of practice.
You’ll notice every professional goes on TV. They always say, dadada and dadada. And that’s why I did dadada da. It’s like a song almost. But you didn’t know where you were going so it kind of just dragged of. At the very least, you can restate the question. You can say, so that’s why I think that I stand out among my peers, or something like that.
Anybody else notice anything here? It was a tough question. For this type of question, because I’ve asked you so many broad questions, these are intentionally really tough. I said tell me about yourself. Oh my god. You could go in a million different directions, right? But there are frameworks you can apply to each of these questions, where it’s almost like this what happens.
When I started getting really good at this, they would ask a question, and I would instantly see the map in my head. Do you guys remember that movie with Nash, the mathematician movie, right, and he sees those things? It wasn’t like that. I’m not that cool. But it wasn’t actually anything at all like that. But I knew the type of question he was gonna ask because I’d seen it, because I’d done a lot of interviews. I also knew that I had a bunch of stories right here in my back pocket, in my quiver, right? In my story toolbox. It just came together. I also use certain techniques, like I have a couple of fillers that I can use at the beginning while my mind ramps up and it all comes together. Again, this happens with practice. So can I take a crack at that?
Ramit Sethi: Ask me the question. Wow, why should I choose you?
Drew: Why should I choose you?
Ramit Sethi: Well, that’s a really tough question, but I think a really fair question. Candidly, you probably have a lot of people with more experience than me, so why would you choose someone who’s relatively inexperienced? But the way I think about it, I think about it in three different ways.
The first one is a demonstrated interest in advertising. So I didn’t just choose to interview with you because I had nothing else to do. If you actually look, I ran the advertising club in college. I actually applied some of that by running the Russian frat and using that to generate $60,000 and donate it. This is something that I’ve been fascinated in both on a practical level and even on an academic level, attending conferences about advertising, things like that.
The second thing is – oh, it’s actually slipping my mind. Oh, excuse me. The second thing is that I want to take what I’ve done and apply it to a larger stage. So I’ve been working on a small level, at a college level, etc. But now I want to take it to a bigger league.
And then that leads naturally to the third one, which is I, like you and like anyone, want to work with the best. So we all know that Acme is the best. And I’m not just saying that to butter you up. The things you’ve done in terms of the X, Y, Z campaign and the A, B, C campaign. Those are things I studied. Those are things I think that I could contribute to, but I also know that I have a lot to learn. So yes, there may be people who have more experience than me, but I think if you actually consider all the things on balance, the demonstrated track record, wanting to take it to a bigger stage, and also knowing that I can contribute so much and also learrn from you, then that is the reason that I would actually select me.
Okay? So I actually – did you notice how I messed up in the middle? My brain just went boom.
Female Speaker 1: Was that real, though?
Ramit Sethi: That was real. I actually couldn’t think of it. It was real. I didn’t mess up on purpose. I’m trying to make this flawless. Let’s edit that out, please. Actually, I did mess up. My brain went blank because I wanted to take the smaller stage to the larger stage. I wanted to make that the third one, the crescendo. And then I couldn’t think of the second one. So I was like, aw, shit.
So I put that as a second, and then I came up with a third one as I was doing the second one, okay? It seems like black magic right now because you’re like, how is this guy doing all this stuff, whatever. But this is just practice, practice, practice.
Imagine you break it down. You start to answer interview questions, you start to see the same questions over and over, testing you answers. You know the questions they’re gonna ask. You know the words they want to hear and use. You get so good at this that you can answer almost anything. You see why I said that my Dream Job students, they can take my scripts and they can probably get a second round interview, but the top students actually know how to internalize it. They can take and parry and genuinely answer virtually any question. So does that make sense to you?
Ramit Sethi: What do you take away from this exercise in terms of your interviewing?
Drew: Well, I know that I need to sit down and actually think of the questions and think of my answers.
Ramit Sethi: Yeah, uh-huh.
Drew: And more importantly, I need to be able to come up with relatable things, stories from my background, and use concrete examples from things I’ve done, and be able to relate them not just to you, the interviewer, but the company as a whole.
Ramit Sethi: Awesome job. Well-done. Awesome. Amazing. So anyone else totally impressed by Drew? First of all, just the fact to get up on stage is incredible. That is ballsy. And then the answers, for never really having done a mock interview – is that your first time?
Drew: I’ve done like one interview before.
Ramit Sethi: That’s incredible. Really, really great stuff. It shows you that with just a little bit of practice, you can take those answers. And in fact, he did that on the first one. He took an answer that was a bit rambly. He made it really good.
Imagine if you do that five or 10 times. Just five or 10 times in your life, how much better would you be than everyone else? Incredible. That’s how my students go on to get $20,000 raises, $30,000 new jobs. It’s not because they’re the biggest geniuses in the world. They understand the systematic process, and they actually put in the work and went through it.
Anybody have any reactions, questions, comments on that? And then we’re going to ask one of my students, Robert, to come out in just a few minutes. Reactions from here and reactions from the Web. What do we have from here, anybody?
Female Speaker 1: I’m highly impressed that you’ve only ever done one other interview. And you were, with him, of all people, with this huge audience, oh. I mean, that is insanely impressive that you were that calm and did that well. I really hope that you feel that and take that confidence with you because I couldn’t have done that. I don’t think a lot of people watching could have done that, so big old konas on you, man.
Drew: Thank you.
Ramit Sethi: Massive props. Okay.
Female Speaker 1: The Internet, as well, Drew. Folks are saying, awesome, Drew. I was sweating bullets just watching you. Great job. Drew did it great. He was so calm.
Male Speaker 1: Yeah, that gave me anxiety watching. Good job, Drew. He’s so cute.
Ramit Sethi: Drew! Oh yeah!
Male Speaker 1: That was [inaudible] Ninja.
Ramit Sethi: Drew slipped me a 20 before so he could do a little singles exercise up here. Boom. All right. So.
Female Speaker 1: I do have a question.
Ramit Sethi: Okay.
Female Speaker 1: People are asking about how you can practice this sort of thing?
Ramit Sethi: Oh, great.
Female Speaker 1: So toastmasters, people are bringing up, or other coffee chats, or?
Ramit Sethi: Very simple. There’s two or three stages to it. The first is, you actually write down the questions that you’re gonna get. You can predict 80 percent of the questions, just on the top of your head. And if you don’t know, go to Google and search for common interview questions. Five minutes, okay? This is the laziest thing people do. They walk into an interview and they’re surprised. I’m like, you’re surprised? They asked you the questions that everyone asks. All right? So you can predict those.
The second thing is, so you can write your answers for them. Literally script them out. Then you can start saying them. I actually just say them out loud. And people are like, oh my god, that’s so weird to say it out loud in front of a mirror. I actually think it’s weird to be losing $50, $100, $300,000 over your lifetime because you were unwilling to do this for one weekend.
Then what you do is you call up one of your friends who’s pretty good at this kind of stuff. They don’t have to be a master interviewer. They just have a good job. You say, listen. Would you be willing to interview me and give me some feedback? They’ll come over on a Saturday. They’ll ask you this.
The final stage is to videotape yourself. Videotape this interaction. Now this is really scary. I’ll tell you, I went on TV, I went on a lot of places before I went on a book tour. And I told my publisher, will you guys get me media training? They’re like, why? We think you’re really good. We’ve seen you on TV. In my head, I was like, uh, because you’re gonna pay for it. But I told them, I want to perfect my craft. So they send me to media training. And media training was really good. They took my book – she had read it, and this was Clarity Media Group, by the way. I’m happy to promote them. The lady who was there was terrific. She asked me some questions that I would get on a TV show, and they videotaped my answers. And I thought I was so savvy.
And I watched the videotape, and I was like, oh my god. I hate this guy. I hate me. I hated myself. And we did it over and over and over again in one afternoon. And I became much crisper, and able to anticipate and wrap it up. So right now, if the cameraman tells me, wrap it up, I could wrap it up right now. Or if I need to stretch it out 20 minutes, I could do that too. Just a lot of practice. So that’s how I do it.
Tim Ferriss: Hey guys, this is Tim again. Just a few more things before you take off. Number one, this is Five Bullet Friday. Do you want to get a short email from me? Would you enjoy getting a short email from me every Friday that provides a little more sort of fun before the weekend? Five Bullet Friday is a very short email where I share the coolest things I’ve found, or that I’ve been pondering over the week. That could include favorite new albums that I’ve discovered, it could include gizmos and gadgets and all sorts of weird shit that I’ve somehow dug up in the world of the esoteric, as I do. It could include favorite articles that I’ve read and that I’ve shared with my close friends, for instance.
And it’s very short. It’s just a little tiny byte of goodness before you head off for the weekend. So if you want to receive that, check it out. Just go to fourhourworkweek.com. That’s fourhourworkweek.com, all spelled out, and just drop in your email, and you will get the very next one. And if you sign up, I hope you enjoy it.
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