Back to Negotiating

Man, I've been busy lately, but I promise to get back to posting at least once per week.

Sorry about that!

I'll have a good post for you by Monday!

Got The Itch For a New Car?

I can't believe the new car deals out there! If you have the cash, now is the time to negotiate for a new set of wheels. We're cash-only buyers here at the Perry household so we're not quite ready, but maybe you are.

If so, Mike at Negotiation Dynamics has a great outline of HOW TO BUY A NEW CAR that I find thorough and very helpful.

If this helped you out, let us know!!!

A Magazine For Us!

Take a look at this site!

Negotiator Magazine

They offer a free subscription to Negotiator Magazine if you sign up. There is a lot of good information here and I'll be digging through it over the next few days. They also have book reviews.

Book Review - How To Negotiate Like a Child

How To Negotiate Like a Child
By Bill Adler
ISBN-10: 081447294X
ISBN-13: 978-0814472941





Having a little negotiator running around my house, I did get a kick out of this book. While I'm not sure I'd use some of the tactics (it's a tactics book) I have had many of them used on me, including the temper tantrum.

Its a fun book with lots of interesting tidbits, but there is not much for the serious negotiator here.

Looking for a Raise?

The fine folks at SalesCareersOnline have offered up a list of seven tips to avoid selling yourself short in a salary negotiation. We suggest you take our offer or we'll walk!!!

Have you recently negotiated your salary? We'd like to hear what happened! Share a comment with us...

Book Review - Women Don't Ask

Women Don't Ask
By Linda Babcock and Sara Laschever
ISBN-10: 0553383876
ISBN-13: 978-0553383874




THIS IS AN EXCELLENT BOOK AND MANDATORY FOR ANY WOMAN TO READ regardless of whether or not she negotiates. In the procurement profession I've always wondered why women are paid 17% less than the men and it has always bothered me. This explains it! I often have trouble encouraging women to negotiate and they always tell me that "its not in their nature." Any woman with children is a top negotiator!

Ladies...time to play in the big leagues. Read this book and ASK!!!

My Supercharged Life - Guest Blog

Yesterday I was the guest-poster on the My Supercharged Life blog. My buddy Jeff was taking some much needed time off at the beach while I'm here freezing in Georgia and waiting for an ice storm to hit.

This post is a negotiating primer for people that aren't using negotiating to save money...so check it out and let me know what you think!

My Supercharged Life - Guest Blog

Today’s tip is a guest blog on my friend Jeff’s blog My Supercharged Life. He’s on vacation this week. Jeff’s blog is a favorite of mine and I read it daily. He’s got some great ideas, especially on small business and finance.

This particular blog is a primer on negotiating for consumers. So if you’ve never negotiated anything or only a few things, this is a great post.

Take a minute and check out my guest blog while Jeff suns himself in Cozumel! Don't forget to register for his RSS feed! I read it every day.

The "Balls" for Negotiating...

Business Balls is a site that I had not seen before and they have a negotiating webpage that has some helpful negotiating tips.

What do YOU think about this list? Give us a comment and let us know!

The Sales Professional's Negotiation Checklist

I found a site called Just Sell and it has a handy Sales Professional's Negotiation Checklist that you can review. This would be great for a new salesperson to print out and stick on their desk so they could read it each morning.

We want to hear what YOU think of this list!!! Post a comment...

Free Book On Negotiating!

I was looking at negotiating training sites and Patrick Henry, Inc. is offer a free REAL book for signing up on their site. I've already signed up so I'll let you know shortly if I get it and what they have to offer.

FREE BOOK OFFER

Book Review - The Art of Influence

The Art of Influence
By Chris Widener
ISBN-10: 0385521030
ISBN-13: 978-0385521031




I'm proud of the fact that I finished this. Usually I would just toss it. I gave it two stars only because I think people that don't like to read business books might like this parable as it is easy to read. It was completed the evening I picked it up at the library.

Essentially it is a fable about a business school student who gets to spend a couple of days with a young billionaire and he learns about business from him and his friends. Then when its over, the wealthy business man hands him a check for $50,000 and says "go ye therefore and prosper."

While I get the four laws of influence, I could have gotten them in a memo. I know that integrity is everything and I don't need rich Mr. Gold saying no to a $500 million opportunity because the CFO told his assistant to lie and say that the envelope shipped yesterday. Lot's of crap.

Don't waste your time or your money, unless the book is free and you hate reading business books.

There Are No Rules In Fight Club

The rule is: ignore the rules. I’m one of these people that thinks that rules are made to be broken or at least bent until they squeak. My wife hates this about me! So many rules we come up against are just arbitrary or put in our way to solve some other little problem that came up years ago. My policy is that the minute you hear the word RULE, POLICY, or PROCEDURE, challenge it.

A hotel that I use for traveling charged me a ten dollar fee for parking my car in their uncovered parking lot outside. I told the person at the counter that I don’t think it is fair for me to be charged this fee since I can park for free across the street and the lot is neither covered or protected.

“Sorry, sir, but that is our policy,” replied the clerk.
“Who’s policy?”
“The Hotel’s policy,” she said.
I leaned over and spoke to the hotel wall with a giggle and said “Mr. Hotel, I’d like to talk to you about your policy!”
The clerk laughed and said “No, it is the manager’s policy!”
“Oh, ok. Can I speak to the manager?” I said.
“Well, he is out right now.”
“Fine, just have him call my room when he gets in, please,” I stated firmly and walked away before she could make an excuse not to have him call.

The manager called me and told me how the fee came about. Mainly it is to discourage people from bringing their cars and to use the transit system which leaves them less liable for damage to guests’ cars. Apparently the cars are broken into rather frequently and they have had to pay out some money for damages. I told him that my insurance would cover the cost of a break in and would he kindly put it in my file not to charge me for parking. He agreed.

A few things happened here. The most important is that I got to the root cause of why the policy was made and I demonstrated that it didn’t apply to my case. Secondly, I used humor with the clerk along with firmness to get her attention and to show that I was serious about questioning the policy. The third is that I didn’t take the policy at face value.

Question policies and demonstrate that it doesn’t apply to you and you’ll save money!

Have a question about negotiating? Send it to us at scott@rainydayfinances.com!

Antie Kate is Awesome!

Most of you know that I right for the blog Rainy Day Finances with my wife, the VERY frugal Marie. She is so cheap she saves the fur from brushing the dog to knit puppies. While researching for her I came across this Negotiating Guide for Timid People Who Hate Conflict from Auntie Kate The Resale Expert. The hardest thing I have come across are women that are reluctant to negotiate. So if you are, take a look at the list and tell Kate I said hi! If you need me, I'll be down at the consignment shop for Ferrari's.

Are you timid about negotiating? We'd love to know why! How about giving us a comment?

Splitting Hairs...

Split the split! How many times have you been negotiating with someone and you get down to something like $1,000 vs $1,200? The other person would say “ok, why don’t we just split the difference?” That sounds like a good deal, doesn’t it?

To me that is a signal that the other party is beginning to fatigue. I love to wear out the other side and I can keep things going forever if they let me. That drives the price down! Once I hear that I immediately come back to them with “I’ll do the deal right now if you’ll agree to split the split!” Almost naturally they’ll say ok, because they’ve already resolved to lose a little money to finish the deal, so what’s a little more. Well, for you it is $150!

Splitting the split will save you money!

Have a question about negotiating? Send it to us at scott@learnnegotiating.com!

I'm Going To Harvard!

Well, I'm going to their website, anyway. The Program on Negotation from the Harvard Law School is broadcasting on the net. You can hear it at POMcast. This is something you should really check out right now!

Here is the link for the Program on Negotiation - and they have a newsletter.

Let me know what YOU think!

Me? Make a Mistake? Never!

The Negotiating Guru has a great "Top Ten" list that I think everyone should pay attention to. Making sure you don't violate these will give you much greater success in your negotiating. This site appears to have gone to sleep but there are some good pieces of wisdom in the archives.

10 Mistakes You Should Avoid In Your Negotiations: A Guide for Business Executives, Entrepreneurs and Lawyers

Policy Police

“That’s our policy!” I love this one. When negotiating with stores you’ll hear this one a lot and for most of us it stops us in our tracks. Who are we to question THEIR policy? Policy sounds a lot like law, doesn’t it. Let’s go to the library…

At the library I was found guilty of damaging a book with water. Actually the culprit was my tiny daughter who dumped her water bottle all over Curious George. The judge at the public library, who is properly called a Media Specialist, informed me that I would have to pay the replacement cost of the book at THEIR rate. I opened the cover and showed her that the actual cost of the book was several dollars lower and that since the book was used and it was my fault that I would gladly pay the book’s cover price. “Our POLICY is that you pay replacement cost!” Ok, let’s negotiate.

Librarians that I’ve met over the years are firm and fast rule keepers. Since my negotiating was giving her heartburn I decided to stroke her ego a little bit by going back to the damage at hand. I asked her was the book really damaged so badly that they couldn’t use it? I got a lengthy lecture on what happens when a book gets water damaged pages, learned about the spine of the book, about mold and mildew and many other things. I told her I was amazed at how much she knew about books! With this information I then gently challenged her as to whether or not the book was useable in its condition to which she replied that they could use it but it would take some work. When I asked her how much the work would cost she replied “we don’t have a policy for repairing books”. Ok, another dead end.

So we went back to negotiating about the cost and I decided to use another tactic, the stall tactic. I had plenty of time as my daughter was reading in the children’s book section, but the Librarian had a line forming behind me. We laboriously discussed the replacement cost. I even told her that if I was responsible for replacing it that I’d just go get them a replacement book and pay a lot less. “Our policy won’t allow that.” Rats.

Ok, by now I’m getting a little steamed, but I’m going to keep my cool. This is a $3.00 negotiation with a Librarian, but a great exercise, so I’m going to continue. The next tactic I pulled out of my bag was the “fairness” tactic. I approached her with the statement that “I am guilty of damaging the book but it is not fair to financially penalize me for the infraction more than the value of a book to replace it. You wouldn’t pay more than a book was worth, would you?” Jackpot! She looked at me with a very puzzled look. “Certainly, I would never do that.” She then agreed to accept my payment of the books cover price which saved me $2.90. We then argued about my right to take the book home since I just paid for it. I told her it was MY POLICY to take what I pay for!

Now, you are going to say that this was stupid, right? Why beat up a librarian for $2.90? There are several reasons that I did this. The first is to make it known to the library that their policy is not quite fair. The second is that I don’t like people waving policies in my face just to make their lives simple. The third is that I need the practice. You can see from the description that I used several negotiation tactics and even changed my strategy. Believe it or not, doing this with the librarian is no different than doing this with a million dollar contract, which I do daily. My policy is to practice, practice, practice and you’ll save money, too!

Open For Business

Today we are splitting the Rainy Day Finances Blog and removing the negotiating sections. We're finding out that women don't want to read it but that it is getting a following all its own. There are not many blogs on negotiation and I think this will be a smash hit! We'll move the bookstore, too.

Trip To The Car Lot...

What time is it? Time to negotiate! The factor of time can really influence your deal. Always be aware of your time constraints and those of the other party.

Let’s go buy a car. You really don’t need to close a deal on a new car for several weeks. The new car dealer knows that if he doesn’t close you in three days or less that statistically he/she won’t sell you a car. So what time of the week do you go to the dealer? Monday? Saturday? It will depend on the dealer but often you see the sales advertisements coming out on Friday, so Friday is often a good day.

Thus, if I go to negotiate for a new car, I’m likely to go Friday and to go very late in the day. If I know what I want, I’m going at 30 minutes before closing time. The dealer doesn’t want to be stuck at the office late on a Friday night and 30 minutes gives them just enough time to work you a deal. As the clock ticks, the pressure is on them to close the sale. Be sure to tell them that you have all day Saturday to look at car dealerships if you don’t buy one today!

Time can be your enemy as well. If you are in a hurry to buy something and the salesperson figures this out, you won’t get a price break. Instead, act is if you have plenty of time. Don’t act like you are rushed and be sure to avoid any high-pressure closes like “if I can get that in gray for you will you take delivery tomorrow?”

Time is money. Be aware of time, because the money you save could be used to buy that next new car!

Loser!

Loosing is hard on me. It’s hard on everyone. But I no longer look at a “failed” negotiation as loosing. Let’s start with definitions. A “failed” or “incomplete” negotiation as I prefer to call it is one in which neither buyer or seller (both parties) were able to see their needs met. This is also called a lose/lose negotiation.

I see a lose/lose situation as my fault, not the other parties. It is a chance for me not to feel sorry for myself or the failed negotiation, but as a opportunity for me to hone my skills and discover what it was about my preparation, strategy, tactics or goals/objectives that were not properly configured for the deal.

Someone in one of my classes the other day mentioned that they had carried cash to a car purchase and were trying to get the sale price down from $6,000 by $300 through displaying the lower amount in hard cash to the seller. He was disappointed that he had failed. In this situation I would not have felt bad about the deal but I would have spent time analyzing what I had done wrong. My suggestion to my friend is that maybe he didn’t take the time to understand the needs of the seller. Maybe he had a bill to pay or a down payment to make on another car that was precisely $6,000. Or maybe the seller didn’t really need to sell the car and could effectively use the “walk away” tactic. Still another option is that the car had great sentimental value and the seller mentally could just not part with it.

What probably went wrong is that the buyer did not take time to build some rapport with the seller. Just a little “small” talk and some pointed questions might have gotten the other party to demonstrate what it was about the car that would keep him/her from selling at the lower price.

Still, if you get to the end and it looks like the deal won’t happen, try the “hat and the door” tactic. I got this one from Zig Ziglar and it is fantastic. When you both agree the deal is not going to happen and you turn to leave (putting on your hat and reaching for the door) just stop and turn back to the seller. Ask them “I realize that we couldn’t come to an agreement, but I’m just curious. What is it about the car or the price that made you hold your ground so firmly?” More often that not the seller will tell you specifically why they wouldn’t come down on price! It is amazing how well it works. Often, when the negotiation is over the seller will drop their guard. “Well, this car is the one I used to date my wife and I asked her to marry me in it!” “Oh, well why didn’t you say so! Didn’t I tell you that I wanted to preserve this car and restore it to its original condition? This car will live forever! I just needed the $300 discount to make sure I had some extra money left over to get started on the minor repairs.”

Take the time to build rapport, and never feel like a negotiation is a loss. Every negotiation teaches you something and you’ll save money over time.

Neanderthal Negotiating?

Negotiating isn’t fighting. I really don’t like negotiating books and trainers that use the term adversary, opponent or even combatant as I read in one book recently. Many will even use military terms like battle, war and “shooting the other guy.” While the person or team on the other side of the table might be hostile, looking at the negotiation as a fight for “my needs” or as a battle is an equation for losing. You may win today, but you almost always loose in the long run.

I prefer Gerard I. Nierenberg’s style of looking at a negotiation as a collaboration. You can order his book The Art Of Negation in our bookstore. He says it is two parties trying to satisfy their needs in a way that benefits both parties. Once a negotiation turns adversarial emotions become involved and things get out of control. Should you feel that things have become adversarial, stop and try to understand why the other party is upset and why you are upset. Put yourself in their shoes and think how they would feel in the situation. Then try to correct it.

My favorite way to get things to simmer down is taking a break. I’ll make an excuse to leave the room and will go get a drink of water or pretend to talk on the phone. This gives me time to reflect on the discussions and to think about the other party. When I’ve collected my emotions I’ll go back to the table, often with my purpose and objectives clearly put back in my mind.

Many times I find that the other party is not frustrated with what is going on during the negotiation, but at something entirely unrelated. I had one negotiation get so out of control that both sides were calling each other names. We took a break and when I was walking out of the room the other team leader blew his nose and took a pill. I asked him if he had a cold and he said he should be in bed and that he’s had the flu for several days. I postponed the negotiation for a week and when he felt better, we closed the deal.

Don’t fight ‘em, delight ‘em. Be alert to anger and frustration as the break you take can save you money.

Get Your Money Back!!!

Lately I’ve been using a lot of my negotiating skills to get my money back. For some reason Marie and I are finding that we are being overcharged more, fined more, penalized more and just being plain old ripped off. I’m spending about 35% of my personal finance time just trying to get back what is owed me. Here are some key tips to help you get back what is due.

1. Keep watch over your accounts. Marie and I watch our bank statement closely and always question any charge that we don’t understand. Most of the time it is just a charge that one of the two of us made and didn’t bring the receipt back for the file. Other times it is an incorrect charge or a bank fee. Make sure you know where your money goes and question any charge, no matter how small. $5 per month in unknown fees is $60 per year!

2. Fight! We made a rule here at our household that no one takes money from us for goods or services we didn’t receive. I will go after any amount regardless of the size. When I opened up a new on-line money market account and made my first transfer, they executed the transfer twice by accident. Since it was for a large sum, it wiped out my bank checking account and caused it to bounce. I received a $50 fine from the checking account bank and another fine from the MMA for not having the funds, even though I did nothing wrong. I started with the bank first and spoke directly to the bank manager. After finally threatening to withdraw all my accounts immediately they reluctantly gave my $50 back. Then I began to argue with the MMA and did get my $50 credited after several phone calls and emails. My time to do this was well over the $100 that I was charged but it is important to let banks know that you won’t let them steal from you.

3. Make your utility companies explain their billing until you understand it. Recently we found out (when comparing bills with our neighbors) that our water bill was much higher than theirs. I examined the bills and they seemed logical but I didn’t understand everything. The water company was very nasty when I questioned them, but I held my ground. They said they would investigate but that they would charge me $50 to do so. I took the risk and agreed. We found out that our new water meter was defective and after a few more weeks of fighting got over $700 in refunds from the water company.

4. Don’t use credit cards. I’m finding that now that we’ve gotten rid of all our credit cards I don’t get accidentally billed all the time. There for about a year I got one incorrect charge each month on a credit card. Reoccurring fees that I didn’t authorize and “membership renewals” were the worst. Now that the cards are gone, life is much easier. If you still use cards, be sure to change your card numbers once a year.

Tenacity is the key to getting your money back. Use supporting documents, negotiate face to face when possible and document any promises and problems. Doing this helps your family save money!

Book Review – Negotiation Boot Camp

How to Resolve Conflict, Satisfy Customers, and Make Better Deals
By Ed Brodow
ISBN 0-385-51849-8





Ed Brodow is a negotiation coach. His book (which is available in our bookstore) is set up like his 10 week negotiation training classes. Basically, this book is a rehash of most of the classics in negotiating and doesn’t offer any really new insights to negotiation, unless you want to study the sex lives of Bonobo monkeys. It is a very good book for a new salesperson and outlines most of the basics of negotiation in a sales type setting. Brodow is known for his books on selling. One thing I particularly don’t like about the book is that he embraces the old school “opponent” or “combatant” type of style then turns around and pushes win/win on you without clarifying that these are really different strategies for negotiating. I think it is a good read for someone that just wants to learn a little before they take on a new sales position.

The Line In The Sand...

He who mentions price first, loses money. Keep this in writing on your desk. Engrave it on your phone. Paint it on your windshield. It is a very important thing to remember.

When negotiating, both parties have an idea of the price they would like to get. Let’s say you need to buy a crib for the new baby coming along in a few months. The furniture company had put a price of $600 on a nice one that your spouse likes. In the mind of the furniture salesperson she knows she gets a $120 commission on the crib and in her thoughts she is willing to give up $50 to make $70 today. So her price is $550.

You, on the other hand, have seen similar cribs priced from $250 to $1,000. Really, you want a good crib that is comfortable and safe for your child, and you have a price of $400 in mind. So, we are looking at $550 vs $400 and a gap of $150.

When you go into the negotiation you often don’t know what the other person’s target price is. That is why the retailer sticks a list price on things. For me that is their STARTING POINT, not the price I’ll pay. If I want the crib for less than the list I need to get the furniture salesperson to come off the price first. If I say “you know, I’d buy that if it was on sale for $400” that let’s the salesperson know where I stand in the deal, possible how much I have to spend and where the negotiation is heading. “Oh, you have $400! Well, let me show you this budget model…” and the negotiation goes down hill.

But what if this particular crib was going to be on sale and the salesperson’s commission was 50% of the sale? That would mean that the salesperson could sell the crib for less than the $400 I’m willing to pay, and I’ll lose money.

Let the seller move first on the opening price. You then can see where they stand and move them down accordingly. This will help you save big bucks!

Toddler Tactics

While I don’t believe that negotiators are born and that they are made, I do believe that we all have some natural negotiating skills built in to our psyche. My example to support this statement is my little daughter who is three and a half. She can out-negotiate me most any day of the week.

The Pajama If/Then: At bedtime I’ll pick out her pajamas because if I let her do it we’ll be there all day. Tonight she doesn’t want to wear the purple jammies and she wants the pink jammies. I tell her no because they aren’t warm enough. She promises me that if I will let her wear the pink jammies then she’ll will sleep under the blanket tonight. I give in. The if/then tactic is a tit for tat approach for both parties to get what they want.

The Cookie Nibble: When my daughter doesn’t eat dinner like she should she knows that she can’t have a cookie that evening. I’ll go get myself a cookie and the next thing I know she is standing under me. “Daddy, I know I can’t have a cookie, but could I just taste it a little?” Naturally she’ll get a cookie. A nibble is a sales tactic that adds profitable options to a done deal, such as window tinting on a car where you pay $250 for $25 worth of tinting.

The Princess Stall: Often we’ll read some books before my daughter goes to bed and usually they are books about princesses. In order to keep from having to go to bed my daughter will extend her reading time by begging me to read just one more book. Often this is followed by the statement “but Dad I really am learning how to read! Please! Please! Please! Just one more book!” Naturally I pick up Snow White and start reading. The stall tactic is used to gain more time for bargaining or to lengthen the negotiation in order to wear down the other party.

Watch your kids as they negotiate with you. Some of their tactics are brilliant and very effective, and you’ll lose money if you don’t watch out!

Coach Perry Says...

Practice! Practice! Practice! While I believe that negotiation is a science and not an art, there is one aspect that is truly art-like and that is practice. The more you practice strategy, planning, tactics and skills, the better your negotiations will be.

The best place to practice is…everywhere! I try to negotiate everything, at least anything over $25. The reason is not that I always need to save money or that I want to play with people, but that I want to practice to develop my skills for the big deals. The more you try it the more the skills and tactics become natural to you.

Try this. The skill is patience. The tactic is “is that the best you can do?” The assignment is to try out this skill/tactic combination 10 times over the next few weeks every time you can. Patience is the most effective skill in your repertoire if you can learn to master it. Outside of the US this skill is used frequently and it is very effective on Americans. We are a nation of speed and immediate gratification. When you slow things down in a negotiation the other party always wants to speed them back up. Often they do this by giving you information or better pricing, both of which hurt their position. So take the tactic and ask the person you are negotiating with “is that the best you can do for me?” and shut up. Shut up so long that it is painful. It’s like doing the tenth rep with free weights or running an extra mile. It is painful and you will want to scream when you get through. The silence between you both is deafening. See how long it takes for one of you to speak, and if you speak first, you lose.

Once you develop your patience skill, start noticing how the other party seems like they just have to talk. The longer you are patient and quiet, the more beans they will spill. I’ve done this on many occasions and have had excellent results. Once you feel like you have mastered this try looking at them straight in the eye and being silent! You’ll be surprised what a salesperson can do for you when they have too much time to talk! You’ll save money as you practice, practice, practice.

Killer Deal?

While it is advantageous in many ways to use win/win strategies where both sides get what they want, sometimes it is either not possible or not practical. Several times I’ve used my skills to get fantastic deals only to feel guilty later that I had somehow taken advantage of the other party. This is not good and makes for some restless nights.

If a negotiation goes too far your way, try to keep it from being a win/destroy outcome. Win/lose is something most people can accept. One of the ways I’ve overcome this mistake in the past is to come up with a way to refund some of the money. In one instance I negotiated a super deal with a fellow who turned out to be in deeper financial trouble than he let inferred. He had no choice but to accept my ridiculously low opening offer because he was afraid of not having the money that day to make his rent payment. I knew the guy to be a bit of a horse trader so I didn’t take his opening banter seriously. During the negotiation I even sweetened my deal and coerced him into giving me attachments for the item I bought for free, including a new case.

After I found out that he really wasn’t kidding and was having a hard time I felt very bad about the deal. Your conscience can make even the sweetest deal sour. To make up for the mistake I made up a reason to give him some of the money back by saying that the attachments he gave me were worth more than I thought and I felt like I should pay him for the excess cost. He was happy with the deal and we are still friends, even though I still had hurt him.

When you know that you make a mistake, do what you can to make up for it. No one refuses returned money. You never know when you’ll need that friend.

Playing the Numbers

Numbers are a negotiator’s best friend. Being prepared with empirical information makes your arguments strong and hard to penetrate. Often when I’ve showed up to a negotiation with a strong case backed up with good information, the other side has completely folded. This has happened even when I provided the numbers ahead of time.

Let’s buy a new water heater. You always PREPARE before you negotiate. First, go log on to the computer and start researching water heaters. Take a file folder and fill it full of printouts that show what water heater is best and what the competitive prices are. Know what options are available, what average delivery and installation charges are, what options are available and which ones are on sale. Once you have this data, convert it to information. I often use simple spreadsheets that have the main models/brands that I like, the lowest prices and their locations and all the charges that I can find listed below. Then select the best deal from the options.

When you go to the Do-It-Yourself store carry this information with you. Explain that you want to buy the Superboiler 9000 for the best low price that you found if their price is higher. Be sure to discuss delivery, installation and all other costs that you regard as important to you. Once all their pricing is exposed bring out your information. Show the salesperson where they are off and request that they comply with the current information. It is virtually impossible for the salesperson to say “well, we provide better model or more extras” because you have the hard facts sitting right in front of them. They have no choice but to lower the price or lose the sale.

Although it is changing, the vast majority of retail sales people are not trained to handle numbers presented in this fashion. I hope your numbers are saving you money!

Copping an Attitude

Attitude is contagious. If you walk into work with a smile and a happy outlook it will be picked up by everyone you come into contact with. Well, everyone but the angry guy that pours coffee on your head because he’s not a morning person. Likewise, if you are angry or hostile, the person across the table from you will pick that up and most of the time they will hand it right back to you. The attitude you bring to the negotiation will often set the tone for the entire conversation.

Try to go into the negotiation with a happy and helpful attitude. If you are grouchy on Monday mornings, then don’t engage in negotiations at that time. When the person you are negotiating with comes to the table angry or with a negative attitude, try to turn them to them away from the dark side of the force.

One of the ways I try to change the other person’s attitude is by giving them a heavy dose of positive attitude. Really, it is hard to continue to be mad at someone who is excited, happy and helpful. Take time to get to know them when you first start and see if you can find some common ground that you can talk about such as family, hobbies or sports. If you still can’t break the attitude offer to postpone the negotiation until another time.

Often, when negative attitudes prevail the outcome is lose/lose. It can lead to hurt feelings, insults and deals that are hard to follow through on. It will completely sap your creativity. Happiness will mean saving money!

I'm Positive You'll Get a Good Deal!

I can’t stress enough the importance of a positive outlook when negotiating. Several times I’ve heard “really, I don’t think they will go for that” or “there’s no way they will drop the price that much.” The fact of the matter is that you never really know. That’s why I approach each negotiation with a positive outlook and reinforce this by remembering the times I’ve gotten a great deal even though I thought it would never happen.

My brother is skewed a bit to the negative side. He called me in to help him negotiate the purchase of a house. This was a few years ago when housing was at a premium in Atlanta and often you paid more than the asking price for certain homes. When the first attempt at a house fell through, he was quite discouraged. I told him to hang in there and we’d try again.

He found another home that he liked and he told me right away that there is no way the builder would come down on the price. How did he know that? He didn’t. He just pushed his emotions onto the deal and all the negativity went into his perception of the negotiation. After a short chat or two with the real estate agent I found out some wonderful things. First, the builder had passed away and his son had taken over the business. This house was the first one that he the son had built. My brother is an engineer and he and I confirmed the fact because the house was not only well built but was in fact over-built. The young builder had not sold a home on his own and it was December, so I picked up that it was urgent for him to move this property so that he didn’t incur taxes and more payments.

With only a short period of actual negotiation I submitted a take-it-or-leave it offer and was able to get the house for him for $32,000 below the asking price. This was because I approached the negotiation with a positive outlook for success and an open mind to new information. I’m positive that you can do this to save money!

Negotiate Under The Trees

We’re all concerned about the environment. What about your negotiating environment? When you negotiate the environment can strongly affect the outcome. Here in the South if you are buying a car the first thing the dealer tries to do after you look at a car sitting on the 100+ degree parking lot is to get you back into the air conditioned dealership. Often they will get you a cool bottle of spring water to whet your whistle. This consideration of your primary comfort needs is admirable, and it is carefully orchestrated.

The less you look at the car, the fewer questions you’ll ask and the fewer objections to buying they will encounter. If you want to test drive the car, they’ll even send a lot jockey out to cool the car down and then bring it to the dealer’s front door to keep you comfortable. All of this makes it easier for you to say “yes.”

Well, I like the heat. About a year ago I went looking for a pickup truck in July. The temperature was hovering around 98 degrees and it had not rained for days. The cars were covered in a light dust from the hot wind blowing. Advantage, me! I kept the poor salesperson outside for an hour as we discussed every single item on the shiny red truck. With every ounce of sweat the price dropped and extras were added on.

Negotiate in your preferred environment, not theirs. The added advantage will save you money!

Herb Tarlek!

Bad guys always wear plaid. Well, maybe not. But one thing to always avoid is someone who is not an experienced salesperson or negotiator. Many people I’ve talked to over the years have said that they wanted to avoid experienced sales pros, fearing that they will be “taken” or spend too much money. I’ve not found this to be the case. In fact, I’ve found just the opposite is true.

A good salesperson understands that a one time sale that leaves the buyer unsatisfied will not turn into a repeat sale later on. Car dealers rely heavily on repeat customers. Experienced sales people are more likely to know ways to work around special problems and provide creative solutions to help satisfy your needs. Also, the top producing sales pros can pick up on your buying signals and will approach the sale in a manner that best caters to your needs and your style of negotiating.

Seek out good sales professionals. Don’t just accept the first person that comes up to you in a store or a car lot. Ask them how long they’ve been in sales and how long they’ve been at the store. If it is not more than a year, ask for a more experienced person or their manager. You’ll find your buying experience to be more pleasant!

Ready for a Raise?

Negotiating for a raise starts the day you are hired. One of the things that I do that helps me prepare is that I keep a daily journal at work. Each day I write down the major things that happen and I list all of the really good things that I do. Let’s say I negotiated a great deal on a contract. I’d list the specifics of the deal, why it was good, how much we saved and any other benefit to the company. Then I write down what it was worth to the company. Sometimes money isn’t the only thing. I keep this list and just prior to review time I send my boss an email with all my successes outlined. While this sounds a bit pushy, it really is a benefit to him. As a manager it is much easier for me to take this synopsis and develop the employee’s review documents.

So make it easy on your boss and tell him or her how great you are! It is hard to not give a raise to someone who has well-documented successes. You’ll make more money!

Everything In It's Proper Place

The location of the negotiation can be very important to the outcome. Is it better to buy a used car at the seller’s home or at your home? Your home usually because you have the advantage of not having to drive the car back home. You may also have access to the internet to show the seller what the real Blue Book value is. If you want to negotiate with a Dentist is the best place his office where the other patience can hear you or over the phone where only the Dentist can hear? The Dentist is more likely to grant you a discount over the phone. Yes, you can negotiate with a Dentist. Yes, I have changed Dentist because I couldn’t get a cash discount.

Use location to your advantage and get the best deal for your dollar!

Time Is On My Side

Timing is a very important piece of negotiating. When you choose to act is often critical. For instance, if you want to buy a car, which day would be better? December 31st or January 2nd? Most of the time December 31st is the best because the dealer needs to move the inventory off the lot to avoid paying taxes and they may also have annual sales goals to meet. When negotiating the price of a hair cut, is it better to do it at 9:00 am or noon? Often 9:00 am is a better time because a large number of people get their hair cut on their lunch break.

The next time you plan to negotiate a purchase, think of “when” and you’ll save money!

Who's Shoes?

Empathy is a powerful building block for your strategy. You will be able to best negotiate if you can put yourself in the other person's shoes. When you approach a negotiation, ask yourself:

• What does this person want from the deal?
• Can they afford not to win?
• Are they in a hurry to sell?
• Do they need to make a commission today?
• Do they like their job?
• Are they in a good mood?

Pretend you are the salesperson for a brief minute. You see her standing there in the appliances section. Put yourself in her shoes for a minute. Pretend that you are selling ovens and freezers. What day is it? Is it Friday? Maybe she is tired. Maybe she just started her shift at the store. How would knowing this affect her negotiating methods? Maybe she has not had a sale all week and needs to move something today or not get a paycheck. Maybe she has had the best week of her career and is looking at icing the cake with a big, fat commission from you. What clues does she give to tell you how she is thinking and feeling? Does her body language give you any tips?

Empathy is one of the first steps toward a win/win which we’ll discuss further as we go along. Start learning to watch for signals that the salesperson gives you. As we progress we’ll learn to interpret them.

Need To See a Man About a Dog

One of the most sinister sales tactics know to the consumer market is the legendary puppy dog close. This closing tactic works like this. You go into a pet shop with your daughter and ask about buying a puppy. Your daughter picks one out but it is a bit more expensive than what you wanted to pay. The owner of the store tells you to take the puppy home for the night and if you decide you don’t like him, bring him back the next day. Now really, your daughter is going to let you bring that dog home, right? While this describes the tactic, you and I will mostly see this in other venues. The used car business will give you a three day free trial use of the car. Furniture and TV rental stores will let you take that big, wide screen digital theater set home just to let you see how it looks in your living room. Guess who winds up buying that TV after your friends and family see it in the your living room and you get the time to wear your “pride of ownership” t-shirt for a while. This is a deadly, deadly tactic with an amazing success rate.

Negotiators can only avoid this tactic one way. Do NOT take the merchandise home. While it can be tempting, your best defense is to recognize it and walk away. By the way…the next time your over this way come see my new leather sofa!

Show Me The Money!!!

Tactic: Negotiate With Cash

When you are negotiating (not haggling, which is tactical) be sure to PLAN to carry cash. There is something very magical about cash. The salesperson that sees you count the bills and move them back and forth in your hands will watch the movements very closely. I hold the cash loosely in my hands and even drop a bill for more affect. The whole time we are talking I keep asking "is that the best you can do for me?" Then I shut up. The silence is a killer and the salesperson will feel like they have to talk. Cash is still king. By paying cash you should expect at LEAST a 3-4% reduction in price just because it costs the store that much to process the credit card payment. I never use credit cards by the way, and don't even have one.

A Good Stiff Belt!

Don't forget when negotiating for a refund or exchange that your time is worth something, too. Today I had to take a drive belt back to the auto parts store because they gave me the wrong size. It took 30 minutes to drive back to the store along with gas and wear and tear on the car in order to make the exchange. I informed the store manager of this and got an additional 10% discount.