John Lowe the Money Doctor gives invaluable advice on how to successfully negotiate your way through a buying or selling process. Your ability to negotiate will have a huge effect on your overall financial position. And it does nt matter what you are buying or selling – it can be anything. This could even relate to your relationship with your lender and your debts. That’s why it is important to hone your technique. Personally, when negotiating, I believe it is important to remain friendly, genuine and well-mannered. Anyway, here are the principles I would follow to get the best deal possible…
1. PEOPLE ARE NOT OFFENDED IF YOU ASK POLITELY FOR A BETTER DEAL
Far from being offended by a request for a better deal, many salespeople are actually delighted at an opportunity to show off their knowledge. It is, after all, a buying signal. The crucial thing is to ask politely.
2. IT’S YOUR RIGHT TO NEGOTIATE
Some people automatically assume you will negotiate. Others assume you won’t. Either way, it is your right to ask for a better deal.
3. AVOID CONFRONTATION
The most successful negotiations are where one party wants to sell and the other wants to buy. Hostility, anger and confrontation ruin everyone’s chances of a favourable outcome. That’s why divorces are so expensive. If things are starting to heat up, suggest negotiations be postponed for a while. Don’t bear a grudge, either. Even if you have every reason to dislike the person you are negotiating with, hide it for the sake of a better deal.
4. BE PREPARED
Educate yourself about whatever it is you are buying (or selling, for that matter). The more you know about the product or service and the market, the better the deal you will be able to strike.
5. IT HELPS TO HAVE A PRICE IN MIND
Generally, you will be in a stronger position if you have a ‘breakpoint’ in mind before you start. This is the price above (or below) which you will not go. If you pass the breakpoint, you should always walk away. Emotional responses have no place in successful negotiation.
6. BE READY TO SAY “NO”
The less you care about making a purchase or closing a sale, the stronger your negotiating position.
7. GO FIRST – OR LAST
Some people believe you are in a stronger negotiating position if you let the other party be the first to mention actual figures. Others think it is better to go first yourself and name a price that is wildly off what you expect to agree. Whatever suits you. But if you go first, it is best to name a price that is wildly off what you expect to agree as it will give you plenty of room to, you know, negotiate.
8. THINK SMALL
Negotiate in tiny increments. If the asking price is €1,000, you could negotiate in €10 sums. If it is €10,000, you could negotiate in €100 sums. As the negotiation progresses, reduce the amounts involved. Why? This suggests that you are getting close to your breakpoint.
9. ESTABLISH AREAS OF AGREEMENT
If it is a complex negotiation, it may help to begin by establishing common ground. For example, you might describe the thing you are buying or selling. Why? You start on a positive note of agreement that will hopefully continue through the rest of your discussion.
10. FIND OUT WHAT MATTERS TO THER OTHER PARTY
Sometimes price matters most to the other party. Often it is something else, like closing the deal quickly, being paid in cash or knowing that they are going to give you future business. Understanding the other party’s position will strengthen your own. This is one reason why social interaction helps with a deal. You will be able to listen and learn.
11. LOOK FOR REASONS TO JUSTIFY A MORE FAVOURABLE PRICE
It will help you to get a better deal if you can offer plenty of reasons as to why you deserve it. I am a regular customer. I will become a regular customer. I am putting in a big order. It is more than I can afford. The market is falling. The market is rising. If we can’t agree, I will have to take my business elsewhere.
12. NEGOTIATE OVER MORE THAN PRICE
If you can’t agree on a better price, look for other things you may be able to get instead.
13. IF YOU DON’T LIKE A PROPOSAL
If the other party makes a proposal you wish to reject, come back with an alternative.
14 SPEAK WITH CONVICTION
You’ll be at an advantage if you sound confident. You’ll sound confident if you’ve done your research.
15. USE SILENCE TO YOUR ADVANTAGE
People feel very awkward when there is a silence. Don’t be afraid to keep your mouth shut. Often, the other party will want to break the perceived deadlock. This will almost definitely be to your advantage.
FINALLY, IF YOU HATE THE WHOLE IDEA OF NEGOTIATING..
Hate the whole idea of negotiating? Here’s an approach that has never failed me. If you are buying, say to the other party: ‘Let’s not waste time. Name your lowest price and if it is acceptable I will agree immediately without argument, and if it is not I will just walk away and not bother you anymore. But if I start to walk away and you come back to me with a lower offer I will still say no as a matter of principle.’ If you are selling, then obviously you ask the other party to name the highest price on the same basis. This strategy works incredibly well, but only if the other party realises you are serious.
Good luck with the negotiations !