Negotiate everything. You will succeed less than 10% of the time. 90% of the time, they will say No. Still, practice makes perfect. I’ve negotiated at restaurants, grocery stores, electronic stores, and even Wal-Mart. I enjoy the discussion. I enjoy the process of finding a deal where both parties win. Don’t be afraid to simply ask. Just make sure you’re prepared.
It’s Not Price
It’s not only about price. If your goal is to simply ask for a price discount, expect rejection 99% of the time. Price is the most difficult negotiating item. It instantly creates a win-lose situation. Don't get me wrong, you should always be interested in a lower price, but it's not the only factor. Be creative.
- Ask for a free dessert at a restaurant in exchange for thoughtfully completing a comment card. Ask for free guest passes before joining your local gym
- Ask for 20% off the floor model or open box item (as-is) if you buy a few more things
- Ask what you can do to be helpful to them in exchange for a discount
It’s not a hustle. You’re not trying to ‘beat’ the other person.
Negotiating is about figuring out what the salesperson or business needs, and offering that in exchange for something. Both parties should win. No one likes to lose. Both parties should feel good after the deal. For example, large electronic salespeople are often paid higher commissions on selling extended warranties. If you’re buying a TV, ask them to reduce the price of the set and you’ll buy the full priced extended warranty. They get a higher commission, you get a free warranty. Both parties win.
Negotiate on more than price to find a ‘win-win’. When buying a car, consider price, features, financing options, color, and car model as part of the negotiation. Maybe they can lower the price if you finance with them. Maybe they have too many black cars and are willing to add navigation if you take one. They won’t tell you what they need. You will find out by discussing multiple items at the same time.
Best Alternative To a Negotiated Agreement. You need to know your BATNA. What’s your next best alternative if you don’t get the deal you want. If you don’t have an alternative, keep that to yourself. If you have an alternative in writing, show it to the salesperson. For example, call competing cable/internet providers to get their best offers. Ask your current cable company if they will match. If not, you don’t need to switch but at least you tried to lower your costs.
Make an offer. Make the first offer. Don’t ask, “Can I get a discount?” No one wants to simply give a discount. Instead, ask “I can pay $300 for that TV and use either cash or credit. Which one would you prefer?” By getting the first offer out, you ground the discussion. You let the salesperson know you’re willing to buy and set an opening position. Now, they must react. Either yes, no, or counteroffer. It starts the discussion on your terms and increases your chances of success.
If you can’t live without the product, you can’t negotiate. You must be willing to walk away. You can’t show emotion or urgency when you’re buying. Make it feel like an impulse purchase. You’re simply browsing and noticed the product. If it’s a service, the same holds true. You’re interested but willing to walk away. In other words, don’t take your children to the store. They kill all negotiating leverage.
Uncomfortable silence is awesome. You want the other party to talk more. You want information. You want to know their needs and what’s important to them. You want to know what motivates them. You want to fully understand their counteroffer. You won’t get any of this if you’re doing all the talking. Listen and allow for uncomfortable silence. You need the salesperson to tell you what you need to know to make a win-win deal.
Don’t wing it. Have a plan before starting the discussion. Know you different options and what you want. Write them down. Think through the rebuttals. Practice it with a friend. The negotiation will go much smoother.
Negotiating is the an art, not science. Practice is situations where you know you will get rejected. Get comfortable (maybe even excited) by the feeling of someone saying ‘no’. Hone your skills. Find out what works for you. Repeat it. Save.
What else? Have you had successful or unsuccessful negotiations? If so, what worked? What didn't work? What tips do you have for negotiating?