Money 101: How To Negotiate Anything
One of my favorite coats is a gorgeous knee-length number that coordinates with almost anything. The best thing about this coat is that I paid the criminal price of $10 for it. I found it on a clearance rack. It was the only coat of its kind and happened to be in my size; our relationship was obviously meant to be. It lacked a price tag, however, and I was scared this meant it would be expensive. When I asked the cost, the manager pulled a jacket of lesser quality from the same rack and said she’d give me my coat for the same insanely low price. Delighted, I showed her where the coat was missing a button, thinking she would have a suggestion for replacing it. Instead she shrugged and offered to knock off an additional 10 percent. I couldn’t hand over my debit card fast enough, and when I got home? The missing button was tucked in the pocket.
As adorable as the coat is, the amazing bargain makes me love it more. While my steal was more the result of a tired manager than my intense negotiating skills, it definitely whet my appetite for wheeling a good deal. Knowing how to ask for one can be intimidating, though. Jim Camp, negotiation skills trainer and coach, and author of Start with No, offered this advice for the negotiating novice.
Consider any purchase a negotiating opportunity. People often think of big purchases when they think of negotiating, but Camp says that you shouldn’t avoid negotiating with any type of business. “Businesses exist to make sales to customers,” he says. “The goods and services for which price negotiations are most common include cars, appliances, construction services, and electronics. But even everyday retailers such as clothing stores and grocery stores may be open to negotiation when there is a special circumstance (you want to purchase a case of something, or the pants you want to buy are missing a button).”
Create a vision. Camp says that the first step in negotiation must be to create a vision. “Your job is to create a vision of the value of what you are proposing, as a way to solve the provider’s problem, i.e., needing to make the sale or needing to move inventory, etc.” The price you ultimately agree on will be driven by this vision.
I recently moved, and we got several estimates to repaint our new home. The company we hired came to give an estimate on a Thursday. The crew had sat idle all week, and in order to not call the week a loss, they started immediately, worked that weekend and completed the job for hundreds less than everyone else we’d talked to. “Price is driven by the other party’s vision, and your job is to help him see it,” says Camp. Just as my painters had the need to squeeze a job into the dwindling week, you need to help the person you’re negotiating with recognize the vision of your situation. “Your job is simply to help the vendor see that doing business with you in this way will be beneficial to him,” says Camp.
Talk to the man. If you’re new to negotiating, it’s probably going to take a pep talk to motivate you into the conversation. Don’t waste that momentum on the wrong person. Camp says, “Your job is to find out if the salesperson has the authority to set prices. In a big box home improvement store, the salespeople are usually authorized to work with customers on pricing. In an electronics store, a salesperson would more likely defer to his or her supervisor. Do your homework ahead of time, and when in doubt, ask for a supervisor.”
Expect a good deal, but a realistic one. When you’re negotiating, your goal is to get a good deal, but it has to be one that will benefit you and the retailer. “My clients never go below profit, let alone cost. You are not out to hurt the vendor, but to help him,” says Camp. If you’re aiming too low, you may need to consider leaving the store and heading to a yard sale.
Let them do the talking. When I get nervous, I talk a lot. Often I start to ramble and my husband has to put his hand on the small of my back to remind me to bring the conversation home. You may be inclined to respond similarly to the pressure of a negotiation, but Camp recommends that you let the vendor do most of the talking. “Talk 20 percent and listen 80 percent of the time. Asking questions will help you do that,” he says. “In negotiation, speaking less is more, so the shorter the question, the better the adversary will grasp your vision for him. For example, ‘What features have they changed in this model?’ ‘How is this brand/model different from that one?’ ‘What can you offer me?’ The more the other party talks, the easier it is to see what he wants and needs from you, so you can show him that your price point is the solution to his problem – he needs to make the sale.”
Leave your emotions at the door. Again, you may be nervous, but don’t treat a negotiation like a conflict, and guard against frustration if the negotiation doesn’t go in your favor. “If you show him that selling to you at the price you ask is to his benefit, there is no reason to get emotional. This is a simple transaction. Emotions – of any kind – will defeat you every time,” cautions Camp. And after all, while it’s possible you may have to walk away from the deal, the worst thing the vendor can do is to say “No.”
How about you, Frisky readers? Have you ever been able to negotiate a great deal?
The Money section and all articles within it are sponsored by Free Credit Score; however, the articles are all independently produced by The Frisky and the opinions and views expressed by the writers and experts are their own.