There’s a saying that everything in life is negotiable. That’s frightening, isn’t it?
It’s reality though, and the reason things are negotiable is because human beings are always trying to get maximum return for minimal investment. If we told you that you could get you a six-figure income and all you’d have to do is sit on your couch, you’d be game. Negotiation works that way. Everyone is trying to get the best deal for themselves. It’s not out of nefarious motives. It’s just simply the laws of nature and commerce intersecting.
The thing is, negotiation doesn’t have to be scary. In fact, if you know how to negotiate, you’ll relish the opportunity to get yourself the best deal! Doesn’t sound so bad now, eh? Imagine walking onto the car dealership’s lot and leaving with the car of your dreams and the salesman frustrated because he was forced to give you a deal he didn’t like.
The following techniques are easy, common sense ideas that will empower you to be your best advocate,regardless of the situation.
- Rank Priorities: Think about buying a car. What’s most important? Safety most likely. If you’re a sports car fan, then top-end speed or looks. The bottom line is you need to know what’s most important. Great advice is to make a list. On a job interview where it’s time to negotiate salary, is it most important that you get a high salary or low rates of travel where you’re away from your family? Perhaps a trade-off you’re willing to make is accepting less upfront money and having a more stable travel schedule. Rank the priorities as “must haves,””really would likes” and “it’d be nice, but doesn’t ultimately matter.” This will help when it’s time to get down to brass tacks.
- Know Your Price: In every negotiation, there’s a point at which the deal isn’t worth it, whether it’s salary or a car deal. In this case, the car sale is instructive. The BMW 435i is a neat car to drive around in. It also costs $42,000 out the door. Of course, you can talk the dealer down. If you decide that you only want to pay $39,000, that’s your price. If the salesman tries to put you over that price, end the conversation. Here’s the key: Your walk-away price is NOT your starting price. On this particular BMW, maybe go crazy with a lowball offer of $33,000. The salesman will scoff and surely counter, and what if he counters at $38,000, now you’re in the driver’s seat (literally and figuratively) and can negotiate a fantastic deal!
- Always Make the First Offer: The reason here is you set the terms of engagement. The rationale here is the psychological idea of anchoring. Look at the previous BMW example. Of course, no dealer will sell a car $10,000 below MSRP, but you’ve set that crazy price as the anchor, the starting point. All counter offers from the dealer are relative to that point. By making the first offer, you dictate the terms of engagement, not the party you’re negotiating with. This is crucial in any form of negotiation, be it cars, houses, salaries, etc.
Using these principles in negotiating unequivocally helps you get the best possible deal. By empowering yourself with these tactics, you’ll consistently pay discount prices and earn premium dollars. As always, try these tactics on smaller items before the big time stuff. Hone your skills, even if it means negotiating with your kids about when they do their homework!