Whether it's buying a house, settling a cell phone bill dispute, earning more frequent flier miles, haggling in China, or paying off your credit card, the basic principles of negotiating are the same. Remember that even the most skilled and experienced negotiators will feel uncomfortable during negotiations. The difference is that skilled negotiators have learned how to recognize, and hide the signs that arise as a result of these feelings.
Step
Method 1 of 2: Anticipating Negotiation Tactics
Step 1. Determine your break-even point
In financial terms, the break-even point is the smallest amount or lowest price you can accept in a transaction. In non-financial terms, the break-even point is the “worst possible” you can accept before leaving the negotiating table. Not knowing the break-even point can result in you accepting a less favorable deal.
If you're representing someone else in a negotiation, make an agreement with your client in writing first. Otherwise, when you're negotiating a deal, and your client decides they don't like it at all, your credibility is at stake. Adequate preparation will be able to prevent these things from happening
Step 2. Know how much you are worth
Is what you offer hard to get, or is it easy to get? If what you have is rare or valuable, you have a better bargaining position. How much need is the other party towards you? If they need you more than you do about them, you have a better bargaining position, and it is possible to ask for more. But if you need them more than they do for you, how can you get more profit?
- A hostage negotiator, for example, has nothing special to offer, and the negotiator needs the hostage more than the hostage-taker for his hostage. For this reason, being a hostage negotiator is extremely difficult. To balance this shortcoming, the negotiator must be good at making small rewards seem like big ones, and making emotional promises a valuable weapon.
- On the other hand, a rare gemstone dealer, had items that were extremely rare to find in the world. He didn't need money from anyone in particular – just a hefty sum, if he was a good negotiator – but people wanted the gemstones. This will put the gemstone trader in the perfect position to draw more value from the people he is negotiating with.
Step 3. Never rush
Don't underestimate your ability to negotiate what you want simply by being more patient than the other person. If you have patience, be patient. If you are impatient, be patient too. What often happens in a negotiation is that people get bored and accept a position they wouldn't normally accept because they were tired of negotiating. If you can stay at the negotiating table longer than anyone else, you're more likely to get more of what you want.
Step 4. Plan how to design your proposal
Your proposal is what is offered to the other party. Negotiation is a set of exchange activities, in which one party offers a proposal and the other party submits another proposal. The structure of your proposal can lead to success or failure.
- If you're negotiating someone else's life, your proposal should be rational from the start; lest you sacrifice the lives of others. The risk of acting aggressively from the start is too great.
- But if you're negotiating your first paycheck, it's more profitable to ask for more than you expect. If the employer agrees, you will earn more than expected; if the employer negotiates to lower your asking salary, you continue to sound like you're "bleeding out," thereby increasing your chances of getting a better final salary offer.
Step 5. Be prepared to leave the negotiation ground
You know your break-even point, and if the odds are worse than break-even, you are willing to walk away from the negotiation scene. You may be called back by the other party, but if not called back then you should be satisfied with the effort you have put in.
Method 2 of 2: Negotiate
Step 1. Depending on the situation, come up with a much better offer than break even
Open your bid on a sustainably defensible position (which you can best explain logically). Ask for what you want, then add it. It is important to start with a high offer because you are more likely to negotiate for a lower offer. If your bid is too close to break-even, then you won't have enough bargaining margin to pass on to the other party as a way of giving satisfaction.
- Don't be afraid to over-bid. You never know – you just might get it! And what's the worst case? They may think you are arrogant, or delusional; but they will also know that you have courage, and that you value yourself, your time, and your money highly.
- Are you worried about insulting them, especially if you bid too low when they want to buy something? Remember that this is a business, and if they don't like your offer, they can always offer back. Be brave. If you don't profit from them, remember that they will profit from you. The act of negotiating is an act that mutually and jointly takes advantage of one party with another.
Step 2. Go around other shops, and bring proof
If you're buying a car and you know that another dealer is selling the same car for $200 less, tell them about it. Tell them the name of the dealer and the salesperson. If you're negotiating a salary and you've researched what other people in similar positions are receiving in your area, print out the statistics and take them with you. The threat of losing a business or opportunity, even if it is not serious, can make people willing to compromise.
Step 3. Use silence
When the other party makes a proposal, don't reply immediately. Use your body language to show that you are not satisfied. This will make the other party feel uncomfortable and safe, and often force them to make a better offer to fill the gap.
Step 4. Offer an upfront payment
Advance payments are always favored by sellers, especially in situations where most people don't pay in advance (we mean you car dealers). As a buyer, you can also offer bulk purchases, prepaying for some products or services, in exchange for discounts.
- One tactic is to enter into negotiations with a pre-written check; offer to buy a product or service for the amount written on the check, and say that that amount is your last bid. They may accept it, because the temptation of direct payments is very difficult to resist.
- Finally, paying in cash rather than paying by check or credit card can be an effective negotiation tool because cash reduces the risk to the seller (eg a blank check, or a credit card being rejected).
Step 5. Don't give things away without receiving something in return
If you give something away "for free," you are implicitly telling the other party that your bargaining position is weak. Someone who is good at bargaining can smell blood and swim towards you like a shark in the ocean.
Step 6. Ask for something that is valuable to you but not of much value to the other party
If both parties feel they are on the winning side in a negotiation, that's a good thing. Contrary to the opinion of the general public, negotiations do not have to benefit one party and harm the other. If you are smart, you can be creative with what you ask for.
- For example, you are in business with a wine entrepreneur, and the wine entrepreneur offers Rp. 1,200,000, - so that you want to work for his company. You want Rp.1.800.000, -. Why not offer the wine entrepreneur a fee of IDR 1,200,000 - and give you wine for IDR 900,000? The wine costs Rp.900,000, - to you because that is the price you have to pay if you buy it, but for a wine entrepreneur the cost to produce a bottle of wine is much less than Rp.900,000, -.
- Alternatively, you can ask them for a 5% or 10% discount on all their wines. Assuming that you buy wine regularly, you'll save money, and they'll still benefit from your wine purchases (just not as much as they usually do).
Step 7. Offer or ask for extras
Can you sweeten a deal, be it asking or offering in a way that will eventually sweeten the deal? Extras or concessions may be cheap to give but can push the deal closer to the "sweet" stage.
Sometimes, offering lots of small incentives as opposed to offering one big incentive can make your offer sound like you're giving a lot when it's not. Be careful with this, both in terms of receiving and providing incentives
Step 8. Always provide a little deal pusher
A push is a fact or argument you can use when you sense that the other party is very close to an agreement but still needs a last bit of nudge. If you're a broker and your client is about to make a purchase this week whether the seller wants to or not, this is a big deal driver: your client has a time limit that the seller should meet, and you can persuade the seller by saying that it's very important. not to exceed the time limit.
Step 9. Don't let personal issues get in the way of negotiations
It often happens that negotiations are hampered because one of the parties has a personal problem and cannot escape it, rewinding the progress achieved in the early stages of negotiations. Try not to make the negotiation process a personal matter, make the negotiation process something that damages your ego or self-esteem. If the person you are negotiating with is rude, overly aggressive, or offensive, know that you can leave the negotiation at any time.
Tips
- Pay attention to your body language - a superior negotiator will pay attention to non-verbal signals, which may indicate how you really feel.
- Avoid using soft language that makes you vulnerable. For example, "the price is -approximately Rp. 1,500,000, -" or "I want Rp. 1,500,000, -". Be firm in your proposal - "The price is Rp. 1,500,000, -." or "Rp.1,500,000, - for you."
- If they surprise you with a pretty tempting offer, don't show that you actually expect less.
- Preparation is 90% of the negotiation. Gather as much information as you can about the offer, evaluate all the key variables, and understand what you can trade.
- Even if you are unsure, speak with conviction, louder than usual and give the impression that you have done this many times before; this can result in deals with inexperienced people.
- If the other party makes a completely unreasonable offer, don't negotiate. Tell them to keep considering you if they want to lower the price (or whatever). Negotiating when they are far from reasonable puts you too far in a weak position.
- Always do a thorough investigation of your negotiator. Gather enough information about them so that you know their offer may be the most acceptable. Use this information as you negotiate.
- Do not negotiate after receiving an unscheduled phone call. The other party is ready but you are not. State that you are currently unable to speak and ask to be rescheduled. This will give you time to plan ahead about what responses to questions will be given and do a little research.
- Use tools to reduce miscommunication and increase transparency. Online tools, including simple graph creators, such as QuickCompromise.com, can be very useful in negotiations.
Warning
- Never talk about the numbers or prices they want, because subconsciously, that means you agree with them - talk only about the numbers you want.
- Bitterness is a deal killer. People will turn down deals just because they're in a bad mood. This is the reason why divorce can drag on for years. Avoid hostility at all costs. Even if there has been hostility in the past, restart the relationship with enthusiasm, positive, not grumbling.
- If you're negotiating for a job, don't be greedy or you'll be fired – and this will result in you receiving less than your previous salary.
