Negotiation Techniques To Score a Great Deal
by Erik Folgate
Filed under Deals, Spending and Saving
I’ve been interested lately in sharpening my negotiation techniques. I figure that if I could combine my negotiation skills with my wife’s negotiation skills, then I could score some great deals. I guess that is why we only tend to get great deals when we are buying something together. I tend to have more a laid back approach where I get to know the person and I win with consumer knowledge of the product. My wife tends to win, because she is hard-nosed and will not back down to counter offers. She knows what she wants to pay, and she won’t pay a penny less. My skills backfire when a salesman is aggressive enough to pressure me into the sale. My wife’s techniques fail when the salesman is not desperate enough to go for the deal, so he lets her walk away. For all of you Dave Ramsey fans out there, here are some techniques that he suggests that you try that I found interesting when listening to one of his audio speech seminars on getting great deals.
- The power of silence. Sometimes we talk too much during the negotiation process, because we get nervous and we feel that we should keep talking to move the process along. What happens is that we end up talking ourselves into making the deal for more than we wanted to originally pay for the product. Salespeople know this, and that is why they will continue to let you talk. Check out the way a good salesperson will treat you during the negotiation. Many times they will stay quiet and choose their words wisely. They want you to keep rambling on and telling them more information that they did not need to know but will use to help close the deal. Reverse this technique on the salesperson and be silent. Make an offer and stand there with your mouth closed. They will be surprised at the silence. It might make them uncomfortable enough to accept the deal or make a counter offer that is acceptable to you as well.
- The “That’s not good enough” technique. You may have heard Ramsey talk about this negotiation technique. It can be very powerful if you have a stone-cold, poker face. Basically, what you do is take a look at the sticker price of a car, washing machine, or whatever and say, “That’s not good enough”. Then, follow that up with some awkward silence. Recently, I tried this technique when buying some appliances for our condo, and the salesman took a momemt and said, “Well, what is good enough”. You then reply, “I don’t know, but I know that’s not good enough”. He ended up knocking off another 10% and THAT was good enough for us. The point is that if you don’t reveal what price you are willing to pay, then their drop in price may be even lower than what you were initially going to offer to pay. If that happens, then the negotiation process is over and you go home early getting a great deal!
- Acting Like You Have Something To Receive Something Else. Salespeople probably use this technique on you all the time. The way this works is you say to the salesperson, “okay, I’ll do the deal if you throw in DVD players into the head rests of the car”. Then, the salesperson kindly responds, “I just can’t do that. My manager isn’t going to go for that”. Then, you say, “okay, well if you can’t give me the DVD player, you’re going to have to come down on your price”. See what is happening here? You’re acting like you already HAD the dvd player, but they are taking it away from you, so you are demanding a reduction in the price! Believe me, a good salesman will subtly do this to you without you even realizing it. Turn it around on them and see what happens. You may not get a reduction in price, but you might get some extra features or a bonus item thrown in that was never a part of the original deal.
What if you made a vow today to never pay retail for a large purchase ever again? How much money do you think you’d save over a lifetime? You’d probably save enough to retire on, and that is my point! Refining your negotation skills is a key element to winning with money over the long term. I can guarantee you that many self-made millionaires are great negotiators. They are informed consumers, they know what they want, and they refuse to pay full price for a car, appliances, real estate, big toys, and even smaller purchases. If you can overcome embarassment and shyness, I guarantee that you will start getting better deals and saving a ton of money. You owe it to yourself. After all, it’s YOUR money, not their money! Make them work for it.
#1 is huge. I always say ( and practice ) that in negotiations, “whoever speaks first loses”, and it’s served me very well. When in doubt, shut up, and you will pay less.
Hey man – just found your blog via The Consumerist. I think it’s awesome! There’s some good stuff here in the archives and I think your about page really sums up what you’re out to do! Keep up the great work and I look forward to returning!
The silence technique is great. I used to work for a newspaper, and one of the old-time hard-boild reporter guys used to use it when he called people who might not want to talk to him: they’d pick up, and he’d say, “this is John Smith, with the New York Daily News.” Then he’d go silent. Within ten seconds, the other person would nearly always start gabbing.