Een aantal basis elementen die je zowel zakelijk als privé kunt gebruiken
Why we avoid negotiation:
- Some people have fear to negotiate, put that aside, and go for the result
- Don’t be afraid that people will laugh about you when you will negotiate, but accept it at think about you’re possible end result
Overcoming embarrassment and pride:
- Some people are afraid to feel cheap, this is something to overcome
See negotiating as a game. The seller is also playing the game
- Practice the game, and be prepared
Don’t see only a yes or no:
- Negotiate the results, a yes or no is not the only option as feedback. Negotiate instead of saying only yes or no. The third option is negotiate the result
Fear of losing the deal:
- First rule: always be polite. Don’t be rude.
- Second rule: you can walk out of the offer, but be prepared to crumble back if needed
- Fear of losing the deal, can you step out of a deal and come back?
Yes absolutely! Don’t fear, you got nothing to lose. It is all a game
- It doesn’t affect whether they like you, just negotiate and get the best deal. Don’t give in to early.
- Negotiate when you got a complaint, ask something in return.
- Just try , it’s a game
Fear of not being liked:
- Who cares? Just go for the result
- When you pay the full price, they will laugh at you when you pay the full price
- Doesn’t make you like them
- Make it a tough negotiation and be happy with the result, but forget to be liked!
When should you’re negation light go on:
- When you have complaint, make it a gain for you
- When you receive directly a reduction and get an easy offer
- Pretend it’s a game
- Always be prepared to negotiate
- Never be ashamed
- There are more options then only yes or no
- Don’t be afraid of playing it hard, you can always go back
Planning phase of negotiate:
- Rule #1, NEVER break you’re walk away point.
- Take a max offer point, but never go above or below. Other ways you’re make a loss on the deal but also the emotional part is very important to understand.
- Believe that you keep straight to your walk away point
- If you can’t walk away you’ve got nothing
- Walk away and understand there will always be another one
- Built up you’re walk away strength
- Set your limit carefully in advance, what is your real walk away point?
Understand you’re internal and external factors
- There are two things to consider in advance:
- Set your walk away point
- Opening offer
- Knowing these two ends of the scale
- The two ends of the scale are coming from two different places
- The walk away point is coming mostly from an internal value or feeling. How much do you want it. What is your value related to this product.
Don’t pay the price when you don’t think it is worth it for you
- The Opening offer is based on external factors: The market/competitors.
This is based on the market, and what you might get for this price
Therefore market knowledge is important!
- The market affects your offer, not your walk away rate. The walk away rate is generated internally.
Tip, first check within yourself what you think it is worth for you, before you ask the price.
Don’t let the going rate start to influence your walk away point.
- Prepare your tradable in advance. Tradable are all the extras that you might be able to get. Decide what are the nice and need to haves, the order of priority is important
Give them a value, how much are you willing to spend. Set here also your walk away point.
Value each tradeable.
- Preparation is power, set you opening offer and the walk away point in advance, also for the tradable. This will set your mind free for the real negotiation
- The way to get from the opening position to the finish it to trade.
Ideally you’d have a list off tradeable you could use big ones and small ones like a pack of cards which you have in mind. Also have in mind what you like as an additional option/gift.
- The final thing to prepare is to think about the other person’s weaknesses. This make yourself feel stronger.
Don’t dwell on your own weaknesses (for example it is your dream car), focus on the other his weakness. Maybe they have a bad sales week or the market is down or something is for sale for a long time. Speculate on what weaknesses the other person might have when you’re buying.
Wait until you have the power!
They have weakness too! Focus on their weakness not yours.
Always give it one more try.
This rule will help even if there’s only one supplier
- Prepare your Tradeable, Walk away point and Opening offer
- Always negotiate
- Rule #1 for negotiating is obey your limit!
- Internal factors determine your walk away point, based on feeling-how bad you want it
- External factors determine your opening offer, market/competitors
- Possible weakness from the others: few customers/sales target looming/lots of competitors/things they know but you don’t
Don’t open first
Rule#1, Don’t open first. Avoid opening if you can.
In case of selling: ask what the buyer his budget is, and if he wants a full day course or a half day etc….
Why should the other person open first:
It could bring good news, high offer/budget
Bad news, low offer –> you need to negotiate.
Never forgot the golden rule, set a limit and obey your limit!
Ask questions and listen very carefully,
Asking questions will also help you to understand their weaknesses as well.
Try to understand what they have been doing so far to find the best deal and what their current options are.
You will be surprised how honest people can be.
Don’t say too much, ask questions and listen. Let them speak and understand their current situation. This might give you an big advantage.
How to set the opening offer:
How do you decide what offer you will make if you’re buying?
- Step A, what is your expectation? For how many do you think you are able to get it?
- Step B, Then ask what might you get it for?
- Step C, The create your offer based on those two, but of course below that limit.
The idea is to open lower than the best you might get, below your best hope!
When you are selling:
- Step A, ask yourself what the best deal is which you can get
- Step B, think about the target which you can get or should get
- Step C, create your offer which should be above your target of course
In both cases, selling and buying, you should be able to justify you’re opening offer.
Next opening offer rule:
Never open with a round number!
Use 7 and 4, those are not very obvious numbers.
For example, I can offer €7.430,=
Why? Using a round number sounds like you just made it up.
The offer of €7.430 sound like a very accurately valued offer which you calculated first. It could be all you got or what is really calculated by you as best offer.
This is the reaction on a bid/offer.
- The Italian Flinch: walk away mad
- The British Flinch: on a humble way saying that you did not expect that it would cost that much. Also a little bit depressed as well and looking a way. “I thought we could have a deal but unfortunately this is not going to happen”.
Just be shocked about their offer
Check also if they flinch back of if they flinch due to your offer
And it’s good when they are shocked, you have to negotiate but you know that you are really negotiating: It’s game on.
Do notice that it is no poker, react on the offer or bid, look unhappy and play the game.
The ambitious opener:
Often an ambitious opening offer will feel uncomfortably scary and almost rude when you make the offer.
But when you look back later, it will look fine. Do tell yourself that it will look fine at the end.
They will maybe laugh, but who cares?
- Move in small steps,
- Don’t forget rule nr1, Always set you limit internally. don’t go above your limit
- Check the Flinch
- It’s only a game
- Fight for you walk away point
- Trade something if needed, e.g. €50,- is ok but then I want x, y or Z back
- Go for an outrageous opening offer
- Don’t worry for you opening offer, after the deal is done it will look fine
- Use a specific number, not a round number
4 types of tactics:
- The Vice: this is a technique/tactic which you really need to use and you need to look out for it being done to you.
The Vice is a buying tactic and this is where the buyer says you’ll have to do better than that. So the seller quotes a price, and the buyer says you’ll have to do better than that. And keep turning the screw.(vice=bankschroef)
What can you do as a seller when it is done to you? Trade and play the game
Trading means getting something back for it.
And when they use the vice multiple times, ask them what they think is a reasonable price, and ask them to come down to what price….you can’t come down for ever.
“I quote you a price, you say it’s too much, what do you think’s reasonable, you tell me…”.
And use the word exactly “how much exactly do you want to pay?”. This will force them to get a real number. Counter there vice tactic!
- The Salami: How do you eat Salami? By cutting thin little slices of the salami.
People ask several kind of reductions during a negotiation, lower selling price, no delivery cost, extra pieces of x etc….. At the and your full salami is gone.
The game they are playing is: getting small slices which they directly own, and what you still have left is still negotiable for them.
How to counter this, take back a piece of salami when they want an extra piece of salami. You take back what they took and you change it for something else. This will stop there salami game.
Or say that if you want x I want y from you.
And if needed you can say at a certain moment: Well I have calculated some numbers, and this isn’t a good deal for me anymore, and let’s stop the negotiation. As long if there is not an agreement yet you are able to stop it. yes it is unprofessional but if needed get it off the table.
But stay sharp and trade every piece of salami.
- Knocking the product: Say to the seller that it is not your color or you don’t like the options.
If this is done to you as a seller, then tell the potential buyer that therefore the price is so sharp/reasonable.
The car is rusty, well that’s why the prices are reasonable that’s already reflected in the price.
Bear in mind they probably use it as a tactic.
- Reluctant seller or buyer: act reluctant but get something back for it. e.g. well your location is very far away and I have busy schedule, but when I can charge my travel cost and time I agree.
Well, I don’t need this type of car but if the price is ok I could consider the deal.
Notice that this is trick which they can do to you, in this case you need to bear in mind that it is a game and that they are willing to buy or sell.
(reluctant = onwillig)
Trading allows you to get a win win solution.
A win win sale is possible, but a win win negotiation not. This will rather be a win lose situation. A straight negotiation on price is never going to be win win.
You where for e.g. able to reduce the price with x euro, but the seller lose therefore x euro.
It could be a win win negotiation when there are tradables.
For example, giving a lower price but a booking for 10 training courses instead of 1.
The buyer gets a cheaper price, and the seller gets more bookings further ahead.
This will be a win-win negotiation.
Both parties can propose a trade offer.
It’s important to have a list of tradables prepared in the preparation phase.
How to trade:
It’s very important to apply the phrase: If you…. then I….
e.g. if you pay in advance we could deliver it quicker.
Why use this phrase? This will make it much stronger and gives more power and it prepares to the Yes.
When they say no to the trading offer you will not give them there benefit.
Hide if it is important for you to get the trade, otherwise you have to pay for it. in this imply if it is unimportant for you.
And also hide if it is not important for you otherwise you don’t get it at all.
You can even do if it is very important, and let it go later on if you are able to get some money off. In this case you can imply that it is very important, and let it go for a good price reduction.
Take small steps:
Beware for give away too much, and therefore you need to move in small steps.
- First of all you give away less money.
- Second you’re implying that you’re very nearly at you limit, the signal is that there’s not much to go
Take small steps with a tradable every time will be the way to go!
And don’t forget to always set your limit and your walk away point.
Also keep in mind that your limit will be probably your worst deal to get, therefore you need to try to stay below this.
And never go directly to your walk away point otherwise you have nowhere to go in the negotiation!
At a certain moment when you are around the walk away point you can justify why it is a certain amount and you can also sell the product or service (by telling how great it will be).
e.g. I can get to 38e when you recommend me to your neighbors,
I can go to 35e when you book me every 4 weeks,
I can go to 30e when ….
Bear in mind that negotiating should be nice!
The closing phase of negotiation:
The final offer:
When people say it’s my final offer, it’s either true or it isn’t.
It’s not a brilliant phrase to use in case it is not true.
When it is true, it could be very powerful. But when you are the seller and you do business offer with somebody they could push you every time to get until your last offer.
But overall, it is best to avoid this phrase at all. It gives to much information about your price standpoint.
And when you are a buyer, never ask if it is there last offer.
Split the difference:
Best is to avoid this phrase also.
Why? Because they’re basically already give up the negotiation.
So you can give the push back, sorry I can’t afford €xx, or; I won’t make any profit when i sell/buy for €xx
And then say; It got to be €xx.
But, what if they walk out for €xx…?
In that case you can split the difference of the difference.
So, when they offer to split the difference–> Say no, I just can’t.
And when they walk out, say that it is mad to fail to get the deal when you are so close and offer to split the difference of the difference.
To be sure that there are no extras/hidden cost, ask in the middle of the negotiation:
are there any extra’s I need to know about?
By doing this you can avoid that afterwards extra cost will be charged, when the price is already agreed.
By asking it in the middle you can negotiate the extra cost, or agree with the price as an all-inclusive price, instead of negotiating a prices and being surprised at the end with the extra cost, which can’t be avoid anymore at that time because the price was already agreed and negotiated.
Overall, best is to avoid the nibble situation when you are selling, but you can also use it to get a little bit margin on top. e.g. the cost for the course we agreed on €500, but obviously travel cost is on top
(so in this example you agrees on the price and afterwards you says that traveling is on top of the price)
By doing this you nibble some extra margin on top
Avoid the nibble as much as possible, but use it when needed in case you don’t have any profit left.
But overall don’t leave loose ends.
But if you get extra cost, go for a “counter nibble” e.g. I need to charge for the travel cost to city X
Also avoid of course that you are nibbled, in that case you do a counter nibble.
But, you do this only when there was surprise afterwards, when the price was agreed.
Don’t forget; a nibble is dishonest and you shouldn’t let them get away with it
The Quivering Pen:
The quivering pen is more or less the same as the nibble, but the difference is that the quivering will be done before you shake hands on the deal, or before the deal is signed rather than after.
This technique is a little bit dodgy (geslepen) but not dishonest.
e.g. before signing the contract for a new car: you’ll throw in some free fuel in the tank!
Or in case of selling: you don’t mind if I keep the cd player myself do you!
So you do it before you sign or agree on the deal by giving the handshake.
But do it just before you are shaking the hand or when the pen quivers above the paper just right then you take one more thing.
If this is happening to you, you can say no! Don’t loose your margin/profit!
When you are doing this, know that it is a little bit dodgy!
Should you walk away?
What in case you are stuck at the end of the negating, when they won’t come down and you can’t go up to the last little bit should you walk away in that case?
Well, when your reach your real limit, then yes: rule number 1: stick to your limit.
If you have a little limit of 100, and they reach the end point of 90, then crumble and accept it (when you’re within your limit).
But, when they are not are willing to move, trade!
Practice Practice Practice!
You need to go into the field and practice. Give it a go.
Practice at a carboot sale or a market.
Take small steps an play the game.
Practice on those items which you have nothing to lose, and step out whenever you want.
It could be helpful for something which you want to buy in the near future just to know how low this kind of product/market is willing to go.
And try it on something which you can’t afford, maybe you are able to make it affordable. You have nothing to lose.
Wrap up for the closing section:
- Only use the phrase “This is my final offer” when it is really your final offer
- When they offer to split the difference you can offer to split the difference of the difference
- When they “Nibble” you, trade or counter-nibble
- When the “Quivering pen” is used to you, stand your ground and say no!
And, practice a lot and a specially at a carboot/yard sale/on things you can’t afford or on things you don’t want.
Try and perfect your negotiating skills!
Bron: Chris Croft, course negotiation skills