A strategy that yields results!
How to Win a Price Negotiation
by Harrine Freeman
Negotiating the price of a good or service can save you a few dollars to thousands of dollars. In the United States, consumers do not negotiate prices as often as other countries. Turkey, Egypt and The Middle East are the negotiation centers of the world. Greece, Italy, Spain, Vietnam, Korea, China, Thailand and Vietnam also offer excellent negotiating opportunities.
Chris Voss, CEO of Black Swan Group Ltd and author of Never Split The Difference: Negotiating As If Your Life Depended On It states, "The secret to gaining the upper hand in negotiations is giving the other side the illusion of control. We want them to see our position, we want them to see the issues we have, and we want them to see the constraints we have."
Psychologist Daniel Kahneman's research at the MarketWatch Centre for Negotiation found, "that negotiators can claim up to 42% more value in a deal by creating a relationship based on trust and collaboration." Use these six tactics to negotiate the price of anything.
Prior to negotiating, take a few minutes alone in a quiet place and take ten deep breaths to clear your mind. Pause before you begin speaking. Do not let your emotions or fear overwhelm you. Be confident in what you want. It will show during negotiations and help you get the terms you desire or close to it. State the facts and remain calm when speaking. This will help you become more persuasive and increase the chances of getting what you desire.
Do not rush the conversation or blurt out statements. This shows that you lack confidence and are nervous. Do not make threats. This shows you are desperate. Be mindful of your body language and do not show any reaction, positive or negative. Read the body language of the people in the room. Mimic the people speaking and their mannerisms. This generates more empathy and creates win-win opportunities that focus on a mutual gain for both parties.
Identify Common Goals
Use analysis skills to determine if both parties have a shared goal. This increases the chances of the negotiation resulting in a close. Use "we" versus "I" statements. If negotiations stall, recap agreements made thus far and ask questions to help move past the stall. Brainstorm ideas or use mind maps to find solutions and come to an agreement.
Negotiate, Negotiate, Negotiate
Let the other party start the negotiations. Actively listen to what the other party is saying. Write down questions that you want to ask. Think about what you want to say, and then respond. Do not accept the first offer given.
Continue to negotiate until the other party refuses to negotiate any further and then take that offer. Ask for what you want and be persistent. Make sure the deal is fair but be willing to compromise.
Know the accepted standards and norms, which support a negotiation like gender, culture, language, accepted benchmarks, and accepted market value. Experienced negotiators, especially large companies, make decisions on offers based on the accepted standards and norms that they have adopted.
Present a Counteroffer
Be prepared to counteroffer if your offer is rejected. Prepare follow-up questions. Look for alternatives by creating at least two additional offers that can be presented after the counteroffer. Provide explanations for why your offer should be accepted. Make sure both parties get something in return if the counteroffer is accepted.
Both parties anchor a price that they are willing to agree on, but neither party expects the other party to accept the initial offer. Determine your bottom line or break-even point. Ask for more even if you get the offer you desire.
Create a list of mandatory and optional items. Do not disclose pertinent information unless the other party is willing to do the same. Analyze if the deal makes sense and is reasonable. Know the market value; know what the offer is worth. It is difficult to negotiate if you do not know the value of what you are offering or what you want to receive.
Create a win-win situation by giving the other party multiple reasons why they should close the deal with you. Show them how valuable the offer is to them. Show the other party how giving you what you desire will benefit them so they can get what they want.
Close the Deal
Close the deal by stating must-haves and asking for extras. When something is not negotiable, find something else that is. Present facts or arguments to help close the deal. If you are the buyer, sweeten the deal by offering to pay for services that day with a credit card, cash, cashier's check, or personal check. Both parties should walk away happy. However, be willing to walk away if both parties cannot come to an agreement.
Reviewed October 2017
Take the Next Step:
- Start using these 5 tools to get a better deal...on anything.
- Find out: Could acquired needs theory save you money?
- Learn these savvy shopping strategies for scoring the best deals.
- Keep your finances on track by visiting our money section where you'll find tools and resources to help you with your finances.
- Stop struggling to get ahead financially. Subscribe to our free weekly Surviving Tough Times newsletter aimed at helping you 'live better...for less'. Each issue features great ways to help you stretch your dollars and make the most of your resources. Subscribers get a copy of Are You Heading for Debt Trouble? A Simple Checklist And What You Can Do About It for FREE!
Share your thoughts about this article with the editor.