10 Negotiation Tactics to Win a Very Good Deal
Everything in life is negotiable. Our life is based on negotiations. Negotiating skills can give you more than you can imagine, but first, you must dare to ask for what you want. Surprisingly, you can get more than you could have expected.
You never know where the other party has their limits. The only way to get to know them is to start to negotiate and use negotiation techniques to check them. It is necessary to become a skilled and accomplished negotiator. Excellent negotiators are aware they should constantly get more and more experience and learn new techniques.
If you are interested in becoming a proficient negotiator, read on for tips on how to get outstanding deals.
Table of Contents
- 1. Request More Than You Expect to Get
- 2. Never Say Yes to the First Offer
- 3. Show Surprise at Proposals
- 4. Use Higher Authority
- 5. Negotiate the Fee Before Providing the Service.
- 6. When Asked for a Concession, Always Ask for a Trade-Off
- 7. Don’t Make Equal-Sized Concessions
- 8. Make the Final Concession a Small One, Not a Big One.
- 9. Don’t give everything away in one concession.
- 10. Avoid Confrontation
How to Make a Very Good Deal and Win Every Negotiation?Back to top
1. Request More Than You Expect to Get
"Effectiveness at the conference table depends upon overstating one's demands."
One of the fundamental rules of negotiating is you should ask the other party for more than you expect to get because it gives you some negotiating room. If you are a seller, you can never go up, but you can always go down in price. If you are a buyer, you can never come down, but you can always go up.
You should remember: the less you know about the other side, the higher your introductory standpoint should be. It could be beneficial to consider if your initial assumptions may be wrong. If you don't know the opponent well, he may be willing to give up more than you think. You never know how much the other party needs our products or services. You never know how much they are ready to pay, as a result of the circumstances they are in.
Another very good reason for asking for more than you expect to get is the fact it boosts the perceived value of your offer. If you are selling a product or service and asking for a higher price nobody could have expected, the value of your goods or services is skyrocketing within seconds. Even if you lower your price a bit, your starting point is in a completely different place, and as a result, the final price is much higher.Back to top
2. Never Say Yes to the First Offer
While negotiating we should avoid saying yes to the first offer or counteroffer too quickly because it automatically generates two reactions in the other party's mind: I could have done better, and next time I will, and the second one: something must be wrong. None of them is favorable to you. An experienced negotiator won't show you that he felt that he failed in the negotiation, but he will remember that next time he should be more tenacious, and consequently, he won't leave any money on the table next time. Jumping quickly to yes can lead to higher and higher demands from the other side and the final dissatisfaction of negotiations. Therefore, you should always take time before accepting any proposals offered by the opponents. You should never form a mental picture of the other party’s future reaction to your offer.Back to top
3. Show Surprise at Proposals
When people make a proposal to you, they want to see your reaction. They may not expect that you'll accept their request, but your reaction can tell them a lot. If you don’t flinch or look surprised, your chances of having your way can plunge within seconds. What is more, you are signaling that the other party’s demands are possible. Flinching makes the other side make concessions. When you don’t flinch or look surprised, the other person becomes an implacable negotiator. This technique can be also used while telephone negotiationsBack to top
4. Use Higher Authority
While negotiating it is very effective to say you don’t have the authority to make a final decision and you need to get approval from the board of directors or legal department. (Your higher authority doesn’t have to exist.) This tactic is equally powerful when you are a buyer and you want to get the best possible price or a seller and you want to lower your price, but not too much. To use this tactic competently, you need to put your ego aside. It is good to remember that any negotiator who declares himself to be the decision-maker puts himself at a serious disadvantage. The Higher Authority tactic is much more useful when the higher authority is a vague entity such as a board of directors, a marketing committee, a loan committee, or a legal department. Your higher authority should seem to be unapproachable to discourage any confrontation, but at the same time, the fact of its existence puts enormous pressure on the other party. The Higher Authority tactic may be used to pressure you into a bidding war. By saying “the committee will choose the lowest bid out of five”, it forces the other side into coming in with a super-low proposal.Back to top
5. Negotiate the Fee Before Providing the Service.
When you are a service provider, you should always negotiate the fee before you deliver your service because the value of services always appears to shrink immediately after you have performed those services. The buyer starts to question the value of your services and wants to get the lowest possible price. As a service provider who hasn’t negotiated the fee upfront, you are at a serious disadvantage in comparison to your negotiation standpoint before providing the services. Not only is it not possible to get your services back, but the buyer starts to perceive them as less valuable.Back to top
6. When Asked for a Concession, Always Ask for a Trade-Off
Negotiations are based on the give and take idea so we should remember any time the other party asks us for a concession, we should immediately ask for something in return. It is true even for small concessions which seem to be easy or even favorable for us to make. In negotiations, we should make the big deal out of each concession and shouldn’t give anything away for free. Never say: “No problem.” or “That’s fine.”, even when it is. Always try to make the other party think it would be difficult to make the asked concession. In this way, you uplift the value of the concession, which can be traded off for something else in the future. For instance, when your supplier asks you to extend the payment period, say: "Let me check with my finance director to see what he thinks about that. If we can do that for you, what will you do for us?'' What’s more, a trade-off of concessions between parties prevents escalating the demands and coming back for more. That is why we should always ask the question “What can you do for us if we do it for you?”. This question will save us a lot of time and effort because it is very probable the other party will come back for more when we ask for nothing in return. It is advisable not to specify what you want to get because you can get more than you can think of. They can also say they will give you nothing, but then you can suggest a charge for conceding to their request.Back to top
7. Don’t Make Equal-Sized Concessions
In price negotiations, we should avoid all sorts of patterns while making concessions because it is never good for us when the other party can predict our moves. When we try to break the pattern and give away less, the other party can become irritated because they have already assumed they would get the same as from your previous concession.Back to top
8. Make the Final Concession a Small One, Not a Big One.
When we know we almost reached the bottom line, the last concession shouldn’t be a big one because it can create an impression we still have the space for negotiations. As an example, let’s say we know we can give $500 away. Our concessions should look like this: $300, $200, $100, not like this: $100, $200, $300. When it turns out the big concession is our final concession, it can make the other party disappointed, upset, and hostile, and these emotions are never good for the negotiation process. When your concessions get bigger and bigger, you will never land a deal because with each concession the other party gets a better offer so they will go on asking for more and more.Back to top
9. Don’t give everything away in one concession.
It sounds obvious, but professional negotiators can make you do it faster than you think by saying: “We have located two other suppliers that have very similar offers to yours, so right now everything comes down to price. We think the best idea to do would be to let all of you present your very lowest price.” If you aren’t an experienced negotiator, you will likely overreact and cut your price to the bone. Moreover, you have no certainty they won’t tell you to lower your bid later to win a real or fake price war between the bidders. You can make a concession and lower your price, but not too much. For sure, do not give your entire negotiating range away even when the other party calls for your last and final proposal or asserts he or she does not like to negotiate. These are just tricks whose goal is to see how low you can come down.Back to top
10. Avoid Confrontation
Negotiations are confrontational by nature, but we do better when the other side perceives us as a negotiator willing to find a win-win solution, not a tough negotiator ready to use each gimmick to win. We should always pay attention to what we say at the beginning. If the other party takes an opposite stand, try not to argue because arguing always escalates the desire to prove who is right. You will get an advantage when agreeing with the other person at the beginning, acknowledge how they feel. When you do it, you stop being competitive and start being collaborative. Later you can stay there are some more people who can feel the same way about what will help you even more. Use the phrase: "I understand exactly how you feel about that. Many other people have felt exactly the same way as you do right now. But you know what we have always found? When we take a closer look at it, we have always found that ... ". It is a very powerful negotiation technique. It is proven that when you start arguing, people will want to argue back. The result of such a heated exchange is rarely satisfactory, so it is so important to set the right climate for negotiations. The command of negotiation techniques can be very helpful and profitable, but negotiating is usually a complex and time-consuming process that requires also experience, prediction skills, logical thinking, emotional intelligence, level-headedness, people skills, and many more. The bottom line of successful negotiations is usually the total of many elements that influence the negotiation process; however, the fact that it is sometimes highly unpredictable makes it challenging, but also fascinating at the same time.Back to top