I never get tired of reminding people that negotiating is a way of life. We are practically born negotiating. Kids bargain to stay up late. Parents negotiate to get their children to eat their peas. Our entire society revolves around the absolutely natural process of people asking for what they want and offering something of value in return. And that something of value isn’t always monetary. People exchange time, attention, goods, services, promises, permissions – anything that offers some appealing value to the other side. I don’t see any possibility of escaping the need to negotiate about something, somewhere, at some time, no matter where you live or what you do. Since negotiating seems to be inevitable and unavoidable, we all might as well try to become as good at it as we possibly can.
To that end, here are a handful of commonsense hints that can help you improve your negotiating power. They are easy to remember and simple to use and, if you use them, you will soon notice that your effectiveness as a negotiator can improve dramatically.
First of all, remember that most people start out by asking for more than they are willing to settle for. This is certainly true in negotiations for the price of so-called “big ticket” items, but it is often true even in department stores. I have a good friend who routinely goes into the city’s finest upscale retail establishments and asks for discounts. After picking out her merchandise, she will call over a sales clerk and ask, “How much would you be willing to take for this dress?” The clerk’s reaction is usually one of surprise, but my friend quickly follows up with her next question, “Would you be willing to take ? ?” and she names her price. At that point, the clerk usually calls over the manager and my friend repeats her offer, and the bargaining begins. Does this really work? All I can tell you is that my friend hasn’t paid the full retail price on a department store purchase in years!
For best results, do your homework. There really is no substitute for being well informed about all aspects of the situation before you go into a negotiating situation. Even my savvy shopper friend has a pretty good idea of the mark-up on the merchandise she wants before she goes shopping. In that way, she knows she is offering a fair price, rather than simply insulting the manager. If you are negotiating at the business level – especially if you are in sales – doing research and asking questions is an absolute must. Learn as much as you can about your customer’s business situation before you call on him, and ask plenty of thoughtful, intelligent questions when you meet with him. Find out what he needs, what he is looking for, what he cares about (and doesn’t care about), how soon he wants to take action, etc. Make sure you know what he is willing to commit to before you make your first offer. And always make sure you know who the competition is and what they are offering, so you can counter their strengths with strengths of your own.
Learn at least a couple of quick and easy negotiation tactics. “Legitimacy” involves citing industry standards, company policies, published research – even family traditions – to justify your position. You are saying, in effect, “We would never agree to your proposal because of the research just released by the FDA.” Another very effective, simple tactic is called, “the flinch.” It works just like it sounds. When the other party names their price or makes their proposal, all you need to do is react with look of shock and surprise, and maybe scrunch up your shoulders a little bit. Throwing in an “Ouch!” or a “Wow!” for extra effect can’t hurt. You now have clearly communicated that the proposal is way out of your comfort zone. In most instances, this will cause the other party to panic just a little bit, and start searching for ways to get closer to your expectations. Once he starts backpedaling, you are on your way to getting a better deal.
When it comes to negotiation, just as in most areas of life, practice makes perfect. Get in the habit of at least trying to negotiate more of your life’s transactions. Whether you are shopping, remodeling or repairing your home, or ordering from vendors on the job, don’t hesitate to say something like, “Is this the best price you can give me?” Be sure and wait quietly for a response, and let the pressure slowly mount on the other side. If the answer you receive doesn’t make you really happy, don’t forget to flinch! Be friendly and pleasant but remember, it never hurts to ask.
Finally, remember that sometimes it is just better to walk away. Knowing your bottom line may be the most important single decision you should make before you enter into a negotiation of any kind. If you settle in advance on the maximum you are willing to pay or the minimum you are willing to sell for – or the limit of your flexibility in the area under discussion – then you are less likely to panic or get confused and get sucked into a deal that you will regret later.
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September Negotiation Quick Tip of the Month – “Split the Difference?” Or Not
Nothing sounds more reasonable and fair during a negotiation than an offer to “split the difference.” On paper, it seems so obvious; I am coming halfway up to you from my position and you are coming halfway down to me from yours and we are meeting in the middle. But be careful here. This concept of splitting the difference is a great way to take a lot of money out of your pocket, especially if you are the seller. All a buyer has to do is open with a very low offer, one that is calculated to get him up to what he intended to pay in the first place when he eventually magnanimously suggests that you “split the difference” with him. He ends up paying exactly what he wants, and you may be manipulated into giving up way more than you intended to. What is your defense against splitting the difference? Settle on your bottom line before negotiating with anyone. If splitting the difference takes you below that number, you know it is time to walk away.
