Six Navigation keys To Unlock Every Door
By: Michael Rega
Whenever you make the opening offer in a negotiation, you are immediately put in a defensive situation no matter what happens next.
Closely behind our natural human fear of public speaking is the natural fear and reluctance (in America) to negotiate. The car company, Carmax, realized this in the automobile industry years ago when it eliminated all the push and pull of negotiation and went to one-price selling. This strategy works hand in hand with Carmax’s “friendly” approach to selling cars that is their entire marketing and sales strategy.
The psychology behind this approach is fairly simple. First, people generally believe with one-price buying they are getting a better deal overall. In most cases, however, the opposite is true. A well-negotiated deal is better than the “one price” deal. Second, negotiation has gotten a bad reputation in America and is generally avoided for fear of being cheated. You may have an unfortunate story of a friend being taken by an unscrupulous salesperson. Outside the borders of the United States, you will find negotiation going on everywhere from the Caribbean trinket markets to the highest levels of government. The following six negotiation keys will help shed the fear of negotiation, and soon you’ll be looking forward to the times when you can showcase your skill:
Never Make the Opening Offer.
Set aside the old warning about “always” and “never.” Whenever you make the opening offer in a negotiation, you are immediately put in a defensive situation no matter what happens next. Worse yet, you give up a lot of your power in the first few seconds. Instead, always try to make the other person begin the negotiation. You will immediately be in the driver’s seat.
Grimace or Flinch at the Offer.
Regardless of the offer you have just received, make certain you grimace at the amount. This key alone will save you more money and take you further in negotiation than months of tactics. The grimace immediately puts the other person on the defensive and places doubt on the value of the item or service. This key also substantially softens up the negotiation. The natural response is to discover how much you would pay. Don’t get swept into this goo early because you will unintentionally give up ground. Simply reply, “I don’t know, but you’ll have to do better than that.” Try this a few times and see how powerful it is. You will be amazed by how much time and negotiation energy you save by using just this key.
In Multiple-Meeting Negotiation, Retreat to Some Higher Authority.
Higher authority is used with amazing success. Sometimes called the “my wife”, it sounds like this: “That really sounds like a great deal, but I’ll have to check with my wife….” – who is not present. This can also be used with “my boss,” “the company president,” “my partner,” etc. Negotiate your best overall deal and then use higher authority. When you return to the bargaining table, be prepared with a few more concessions that you and “your wife” want. This is a fast way to sweeten your deal and improve your overall negotiation adroitness.
Show a Willingness to Walk Away.
Whether or not you can walk away is not the issue; rather, it is the apparent willingness to walk that is powerful. This tactic happens often in the immense arena of international negotiations. Groups of international negotiators will give the appearance of walking away and even get up from the table and walk out to prove a point. This gives them the appearance of a willingness to walk out and discontinue the talks. This powerful negotiation tool should be used cautiously but systematically. For example, the next time you purchase a new automobile, negotiate a decent deal and then tell the salesperson you would like to think about it and begin to walk out. Short of barring the door for your exit, the salesperson will give you all sorts of concessions to sweeten your deal because you gave the appearance of walking away.
Expand the Pie.
This key requires some creative thought. It forces you to consider options outside the current deal. For example, let’s go back to the car. You have reached a point in the negotiation where the salesperson claims he can’t go any lower on the price. You feel there should be more room. Expanding the pie involves bringing in other concessions besides the price. You could request a full year of free or reduced price oil changes for your new car, an upgraded set of tires, a luggage rack, better floor mats, or an additional year on the service coverage. This process also creates an atmosphere of joint problem solving, which is very important in a good negotiation.
Always End on a Win/Win.
Leave a negotiation with the other person feeling that you are reasonable, a good negotiator, and someone they would like to negotiate with again. You rarely want to leave a person so beat up that they just wish you were gone. A key way to do this effectively is to keep one concession in your pocket for the end of the negotiation. After you both smile and shake hands, toss in the concession. It will really adjust the mood and make the other person feel very good about future interactions with you.
Besting your opponent is not what winning negotiations is all about. It is being perceived as a problem solver, one who can cut through the red tape and get to the issues that interest both parties. Use these six keys for successful negotiation to enhance your share of the deal and you will see an enormous increase in sales, revenue, and savings. The fastest way to make money is to negotiate for it.