I believe in the rule that just about anything and everything can be negotiated. When you think about it, you’ll find that it’s really true. The trouble is that so many of us never take all the opportunities we have to negotiate and that happens for a myriad of reasons. You may think of negotiating in some areas as common and welcomed but you also may think of other areas as places where it is just not appropriate. You may be nervous about it or feel you don’t have the skills to do it. And that’s the problem. If you don’t try to negotiate for what you really want and need, you won’t ever feel assured that you’ve done the very best you can do for yourself.
I didn’t know anything about how to negotiate when I was young, but as fate would have it, when I was just age 23, I got a job as an assistant buyer for R.H. Macy Corporation. I was thrown right into the position of negotiating purchase prices, terms, advertising, and all the rest for my department, all of which affected the bottom line profit. I can tell you this, you either learn to become a good negotiator or you are out of a job pretty quickly in a situation like that one. So, I started learning from some of the very best negotiators around the company and what I learned all those years ago became part of my skills forever. Those skills carried over from the buying office to my everyday life and they have served me well for almost 50 years.
Now frankly, it’s not brain surgery. It doesn’t matter if it’s negotiating car insurance, construction prices, buying furniture, a new or used car, or even salary and benefits at a new job. It is a style that enables you to better get what you want by practicing a series of principles that I call “The Principles of Negotiation”. Practicing these principles will enable you to be very effective and successful, but at the very least, it will enable you to hold your own against serious and experienced negotiators.
My Principles for Successful Negotiation
1. Remain calm
You would be surprised by how many people get very nervous during any kind of negotiating and when you appear nervous, you become very vulnerable. When you are relaxed, you are presenting an air of confidence and that confidence can make the process tilt to your advantage.
2. Never make an offer of price or terms in a “range”
If you say that you’re willing to pay between $1,200-$1,500 for something like a new refrigerator or a home repair, you can bet that you’ll wind up paying the higher rather than the lower amount. Making an offer like that is a concession.
3. Do your homework before you negotiate
You should always shop around and check the “going rate”. Check competition and find out what was and was not part of any deal. Make sure you know that what you are negotiating for, and who you are negotiating with, has a track record of honesty and dependability.
4. Those who act first finish last
Don’t throw out the first salvo on price when negotiating. The rule of thumb is to work out all the other details and requirements before price is discussed. It’s almost written in stone when price comes out first, everything else will be an add-on to the cost. Advantage: seller.
5. Get everything in writing
It doesn’t matter whether it’s a Macy purchase order or building a deck in your backyard, everything has to be in writing and signed off on. Assuming that what you verbally discussed will be “taken care of” almost always means trouble.
6. Ask for something outrageous right from the start!
What’s the worst that can happen, a no? But sometimes it’s a yes. If someone really wants to sell you something, they may bend more than you might think. No salesmen wants to spend time with a customer and then have the deal fall through over something that they can compromise on. There are more salespeople out there that may just give you the outrageous.
7. Never give without getting
Whenever you have to make any concessions while negotiating, make sure that the other side is doing the same. Compromise works a lot better than resentment and in any deals you make you want to walk away feeling good about what happened.
8. Hang on to your leverage
Pay part at signing, and the balance only when you are completely satisfied, Big companies don’t pay their bills until they get what they ordered or have agreed to and you need to use the same technique. After you pay, your only recourse may be court, not the way you want it to go.
9. Try to get the deal sweetened
If you make an agreement, you may be able to get samples, perks, and/or freebies as a throw-in. Those things that are worth retail bucks to you are much less costly to the seller. If you are buying a case of wine for example, ask for a free bottle thrown into the sale, a retail bottle that sells for $75, may only cost the seller $25 to produce so it may just be to both of your advantages to sweeten things that way.
10. Don’t let personality get involved
You don’t have to become friends when negotiating. The only requirement is that you can work together and that in the end what you seek is delivered. Too often personal feelings stop negotiations.
11. Close the deal
Wow, sounds like a given, doesn’t it? If you don’t ask for the agreement, it may not come on your terms, so say it out loud. “This is what I need to make this deal right now.”
12. The “A” or “B” principle
This is one of my very favorites and I’ve used it for almost 50 years. Whenever I want to include something in my negotiations, I seek out more than one acceptable variation of it and present it to the other side. Instead of insisting I want item “A” and won’t compromise, I offer a choice of items, “A” or B”. Almost all the time, the negotiations end well with one or the other being agreed to, and for me it’s always a win since I can accept either of the choices. The result is, when given the choice, people think they’re making the decision and are more willing to agree.
13. Be prepared to walk
The one move you should never be afraid of is to walk away if you are dissatisfied. My experience is that if you do, you will most likely get a call in a day or two asking to re-discuss and meet. That may be your best chance at concessions and if you haven’t found a better deal in that time, this may be a great opportunity.
Negotiating isn’t easy if you aren’t someone who has done it very often. But, it’s possible to learn the principles of negotiation and it will mean saving money and feeling good about being in control of your money in the long run. The younger you are, the more benefit you will derive over a lifetime.
What have you negotiated successfully that saved you money? Are you comfortable in negotiating? Do you have a mentor in your life that can teach you the skills you need?