Do you want to learn how to negotiate your salary, get discounts on goods and services, and achieve better results for your business? If so, you’re in the right place.
As a buyer for a large automotive company, I engage in negotiation on almost a daily basis, sometimes dealing with upwards of $100 million dollars at a time. Although every negotiation is different, there are several principles that are effective in nearly every negotiation scenario.
1: Opting Out: Always have another option
This is by far the most important thing to consider before going into a negotiation. In an education setting, this is known as your BATNA, or “best alternative to negotiated agreement.” Prior to entering the negotiation room, it is essential that you put yourself in a situation where you don’t have to say yes. By having another option, you are able to walk away confidently if you aren’t getting what you want. Walking away confidently is a powerful negotiation tactic. It shows that you don’t need what they are offering and that you are willing to throw the negotiation away. You may never have to walk away, but by at least having another option you are not forced to accept terms that you disagree with. This will help you set the tone for the negotiation, and put you in a comfortable position to either succeed or walk away.
2: Beggars can’t be Choosers: Never be needy
When you appear needy, your adversary knows they own all the leverage. Whoever is needy loses. If you need a car today, a salesman doesn’t need to offer you a discount or free floor-mats to sweeten the pot. A mistake that rookie negotiators often make is rushing to close a deal too soon. You may want to get out of the negotiation quickly. Displaying urgency to finish a negotiation also broadcasts neediness. Jim Camp discusses the danger of neediness in his book “Start with No.” Make sure you are in a comfortable place, with other options available. That way you are not forced to agree to terms that are not advantageous to you. It’s okay to want an agreement to happen, but if you are in a situation where you need an agreement then you have lost your advantage and are at the mercy of your adversary.
3: Poker Face: Use silence to your advantage
We often avoid silence at all costs. It is uncomfortable, especially with someone you may not know very well. In a negotiation, you may exchange proposals with someone, reject each other’s proposals, and then silence sets in. You may not have anything to say, but rush to fill the silent awkwardness with any sort of dialogue. By talking for the sake of talking, you run the risk of giving concessions simply to break the awkwardness. Embrace the silence! Use it as a tool! Don’t shy away from it simply because you dislike the feeling of uneasiness that goes along with it. The longer you sit in silence, the more this feeling grows. Luckily, this feeling is likely growing in your adversary as well. By letting the tension build, you are putting your adversary in an uncomfortable position that they want to end. Keep your poker face!
4: Get a leg up: Find your leverage, or fake it
You never want to be needy in a negotiation. However, you do want to create neediness to increase your own leverage. Find a way to make your adversary feel that it is essential to make this deal. In salary negotiations, you may be able to build your leverage simply by strong job performance. Have you created an efficiency in a company that has saved money or time? If so, you have created personal leverage. What if you cannot build leverage over time? You may be able to create an illusion of leverage. A classic example is when a realtor tells you that you need to put in a quick offer because there are other offers. In reality, they may not have any other offers, but by creating an illusion of leverage they may be able to rush you into one. Perhaps even a higher offer than you had planned.
5: Defense: Learn to combat unfavorable leverage
How can you combat artificial leverage? You can use the other tips in this post. Don’t be needy. Find another house that you are interested in as a backup. By not being needy, you can simply say “if you already have another offer feel free to take it.” You can leave the realtor your contact information if anything changes. You have to try to determine if you think there really is another offer, or if the realtor is simply trying to get a leg-up. How much do you trust your adversary in this situation? The reality is simple, if they do have an offer, you will not get the house. If they were bluffing, however, you may get a call asking if you are still interested. In the latter scenario, you effectively shifted the leverage to yourself and put the realtor in a position of need.
As it is with any other skill, the main secret to being a good negotiator is simply practice. Practice negotiation as much as you can, and start small. Try to negotiate a better deal for yourself when buying a mattress or a TV, or see if you can get your cable bill lowered. In many negotiation scenarios, there is nothing for you to lose. If the mattress store won’t give you a discount, you can leave or buy it for the regular price. With nothing to lose and everything to gain, get out there and start working your negotiation muscles.
Check out Business Insider for some additional negotiation tips.
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