How To Articles

FIVE RULES FOR NEGOTIATING LIKE A PRO

No matter whether you are negotiating a raise with your boss, negotiating a vacation schedule with you ex-spouse or negotiating with a seller or buyer on an on-line auction, there are certain rules or principles that will help you settle your disputes. These five Rules will help you resolve your dispute and negotiate like a Pro.

Rule 1 Focus on the goal. Don’t be distracted by your emotions.

It is important to check your emotions at the door before trying to negotiate anything. Emotions such as anger can make one lose control. We have all seen someone who gets red in the face and starts shaking his finger and generally looks as though he could easily have a heart attack. Sometimes that person is so mad that he is incoherent. You need to get past that stage if you are going to succeed.

If you are the one who is angry and upset, you need to focus on what you hope to accomplish and tell yourself that nothing is going to stand in the way of that goal. It really does not matter whether you like the other side or not. Some parties are rude, obnoxious and insulting. Try to get past these insults so you can focus on resolving the dispute. The other side may be baiting you so don’t give them the satisfaction of knowing they have gotten to you. If you focus on the goals of the negotiation, it won’t matter whether you like or respect the other party.

Rule 2 Look forward, not back. The past is called the past for a reason.

If one party gets too involved in what has happened in the past, it can be counter-productive. One party in a divorce case, may be so intent on documenting everything the husband has done wrong, that the wife is not even thinking about the goals of the negotiation beyond blaming the husband. You have to figure out a way to get to the present and deal with current issues of custody or visitation. Ask the other party what they want now to resolve the dispute.

Rule 3 You don’t have to be right to settle.

What are the three words we want to hear the most, even more than “I Love you”? We love to hear those magic words, “You are right”. For some people, this is even harder to say than “I love you”. And if you say, “You are absolutely right”, that is even better. When someone says, “It is the principle that counts” or “It is not the money, it’s the principle!” I know that the negotiation is in trouble. That is because the party is making a judgment call that it is more important to be a martyr than settle the case. When someone is obsessed with the principle of a situation, he/she is still emotionally vested in his/her feelings. Unless you can get beyond those emotions, the dispute is not likely to be resolved. Feeling that you are right can be a heady emotion, but it has no place in the negotiation. If the other side is only interested in being right, chances are the situation won’t be resolved.

Rule 4 Know what you want and what the other side wants

Knowing what you want may seem obvious, but many parties don’t know what they want. They are so angry that they have not even asked themselves how the issue can be resolved. If they don’t know what they want, how can they go about getting it? They may want to hash and rehash the circumstances that got them into this negotiation. Depending on the complexity of the situation, you should have a detailed plan of what you want. In addition to knowing what you want, you also need to know what you are willing to give up to get what you want. Generally you can get what you want if you are willing to pay the price for it. Don’t ever begin a negotiation without knowing what you want.

Rule 5 Be prepared and do your research

Once you have an idea what you want, you must do your research and preparation. That could be as simple as listing your arguments on a sheet of paper or as complex as doing the research to cost out a request for wage increases. Either way, you need to be prepared. Otherwise, you might make a concession or agreement that you will later regret. You need to know the rationale behind your requests and a good estimate of the costs, including the future costs.

Nothing is more embarrassing than making a presentation and having someone question the accuracy of your numbers and having the whole presentation fall apart because the data is confusing, or even worse incorrect. If you are not completely prepared, consider delaying the start of the negotiation. If you go in with little or no information, and try to wing it, you will regret it later. You cannot be over-prepared. Even if you don’t use everything you prepared, it does not matter. It is important to have as much information and research as possible just in case you need it.

How To Negotiate When Buying A New Car

I recently purchased a new vehicle when visiting my son and was able to use some of my negotiating techniques:

1. Be Prepared and Do Your Research

Being prepared is of the utmost importance. Before even going to the showroom, one should first look at the ads in the newspaper and look at car sales at Edmunds.com or a similar website. That will give you an idea what is available and the going prices. In my situation, we actually went to the lot after it was closed and looked at the cars that we liked and saw the prices. One car model had a special discount of $7000. There was also a special for zero percent financing. The next day we called and asked the receptionist about the $7000 discount. She told us that the $7000 discount did not apply if using the zero percent financing. However, she did tell us that there was a $3000 dollar discount if one used the zero percent financing. That was useful information because we knew that the $3000 discount was a given and we would have to negotiate to get a higher discount. If you are not prepared, don’t go to the showroom yet. You need to know what you want before you get there.

2.Bring A Friend and Give Him/Her A Role.

Buying a car should be a team effort. Bring a friend or relative or two. In my case, I brought my son and very pregnant daughter-in-law. We each had a role. Whatever was said my daughter-in-law was supposed to say. “Let’s go home and think it over.” Sometimes the deal that the dealer presents sounds so good that it is tempting to accept it on face value. We had agreed beforehand that no matter what the deal was, I would say that we needed some time to think it over and needed to meet in private to discuss further. Our strategy was to have a dollar amount. I did not want to pay over $25,000 for the car no matter what. This kind of negotiation can be very stressful and this is another reason why having friends or family by your side is a plus.

3.Read The Fine Print And Know What All The Costs Are.

When we met with the sales rep, he started talking gibberish about the various costs and it was hard to follow exactly what he was talking about. At that point it is important to use your own checklist and write down all the costs that are being presented and add them up. Don’t be afraid to ask what a particular cost item is. Look at the sticker price and all the features that are presented. What are the extra or hidden fees? Maybe there is some leeway. Our strategy was to have a dollar amount that I did not want to go below. I did not want to pay over $25,000 for the car. It did not matter where the discounts came from, but the bottom line or deal breaker was anything above $25,000. As it turned out, this was the last day of the month, which is usually a good time to buy a car because the dealerships are very competitive as to who has the best track record for the month and are sometimes willing to go lower to get the sale so it can be counted in this month’s sales

4. Ask for One More thing

I knew which car I wanted and knew that I would probably leave the showroom with that particular car. It was the color I wanted and had the special features that were on my wish list. However, I wanted to get the best financial deal possible. I was not planning on getting financing, but the zero financing was too good to pass up. When I was comparing the price to another smaller and cheaper car, I realized that with the financing costs of the other car, my car was actually cheaper in the long run. If the dealership absolutely says the price cannot go any lower, then see if something else can be added to the deal as a sweetener. Is there an accessory you want that could make the deal more attractive such as floor mats, or steering wheel cover? Be creative and flexible. If there are two similar cars, maybe you could switch to the better car for the price you are negotiating. Maybe you can negotiate service for the car. Your want list is only limited by your imagination.

5.Stick To Your Guns and Don’t Say Yes Right Away.

As my mother used to say, it does not hurt to ask; the worse that can happen is that they say no. If you think that they have made their final offer, stick to your guns and try one more round. In my case, I was trying to stay under $25,000. The dealer came back with a figure that was a couple hundred dollars more than the $25,000 with a plausible explanation that this was absolutely the lowest they could go. At that point, part of me wanted to accept that amount and just pay the $200, but I forced myself to say that I wanted the sales rep to go back one more time to see if he could come down to the $25,000. The dealer accepted that offer, probably, because it was the end of the month and the amount in question was relatively small. If they had been resolute on the price, I probably would have paid the higher price but they did not know that.

If you follow these rules for buying a car, you will be negotiating like a pro.