The Art of Negotiation (Part 2 of 2)
Last week we talked about the art of negotiation from the point of view of the person with a product or service to offer. But there are two sides to every coin, and this week we’ll be looking at the other one. That of the person trying to do the haggling, trying to score themselves a deal, and as such, hopefully earn themselves a slightly larger piece of PIE.
The core tenants remain functionally the same, but from the point of view of the haggler, there are a few things to watch out for.
Establish A Rapport: Many people in every industry have run across that guy who will stroll in and immediately try and score a deal. Don’t be that guy. Your success rate is infinitesimal. People are far less likely to cut a deal for someone they don’t even know. Establish a good, solid working relationship with someone before trying to get a deal out of them, and your chances of success rise drastically.
The World Owes You Nothing: Everyone knows someone who walks around like the entire world owes them something. Like everyone should bow down to their every whim. There are a bunch of words for these people, but again, PG blog. Don’t be that guy. Despite what you may think, you are not entitled to a single thing (except perhaps air, although believe me as soon as someone figures out how to monetize breathing, they will). Do not approach someone you’re attempting to score a deal from like they owe it to you. They don’t. Chances are, they don’t even particularly need your business and will happily tell you where to go if you give them attitude. Be friendly, be personal, and above all, expect nothing. That way, should something good come your way, it’s like a pleasant surprise. And who doesn’t like surprises?
Start Low, Expect High: Haggling is a fine art. One that very few people are really, truly good at. The trick lies in setting out the numbers in your head that you’re willing to work within before even entering into any kind of negotiation. Generally as a maximum, you want to use what the person you’re expecting to work with (or have work for you) actually charges. After all, if you’re been establishing a good rapport and a working relationship with them, you’ve been paying this anyway. Like I said, the world owes you nothing and you have no right to expect anything, so using the actual costs as a maximum point is a smart move. The tricky part, is in where you’re going to set your minimum. Your starting bid. Negotiations basically go like this. Either you, or the other party make an offer. You (or they) come back with a counter offer. You end up meeting somewhere in the middle at a price that is acceptable to both parties. This is the trickiest part.
The person you’re negotiating with will obviously want the highest possible price they can get. They’ve priced their products or services at what they feel is fair. You, on the other hand, are trying to get them to go lower.
Any businessperson worth their salt has left themselves some leeway for just such a situation, and it’s up to you to stay within that margin.
Your initial offer should be low. The trick is for it to not be too low, or the other party is going to walk away. Use your discretion here. From there, the other party will make a counter offer, which if you’re lucky will be somewhere closer to the middle ground you’re looking for. Or it will be the exact same figure you started with. Or it might be a piece of paper telling you to insert your head somewhere it was never meant to go. Negotiation is tricky business, and takes a long time to properly get the hang of.
But with a little practice, and probably more than a few failures, you will get the hang of it. And with that, will come reduced costs, and a bigger piece of PIE for you.