How to Negotiate: 6 Rules
“I just don’t see the point in negotiating. I have always just paid whatever they ask. I mean, isn’t it rude?“
Poor, poor girl.
These words were spoken by a friend of mine- we’ll call her Emily.We’d been talking over lunch when we overheard someone trying to book a plane ticket for the next day and asking for a better deal.
Emily clearly didn’t have a background for business, and must have been dropped on her head as a child which led her to ALWAYS pay full price.
I’ve got news for you my friends: If you’re paying full price for everything, you’re paying too much.
The sad thing is, this type of attitude is not uncommon and causes people to lose money they could be using to invest and save for things that they actually want to do. Negotiating doesn’t mean you’re a cheap ass, and it isn’t rude if you can do it right.
The 6 Rules of Negotiation:
1. Know When to NegotiateI’ve seen it time and time again.
Someone will call a touristy hotel trying to book a room and proceed to ask for some huge discount 2 weeks in advance in the middle of summer. My 8-ball says “not likely.”
Why would the hotel give you a discount? They have plenty of time to get full price for those rooms and plenty of people to fill them.Same thing with low price items like movie tickets, which have posted discounts. Don’t bother.
“So when is the BEST time to negotiate?”
It depends on which industry you’re referring to, but for the airline or hotel industry, there are generally two prime times: WAY far in advance, or WAY close to your date- the latter being preferable.
When the plane takes off, they are making absolutely no money on any empty seat.
By coming in day of (if at all possible) and asking for a cheap price, you’re actually doing the airline a FAVOR. $100 off of your flight price gives you a discount, and them a chance to fill a seat they wouldn’t otherwise. Simple economics states that a business should, and often will, take your offer.
If you’re flying for business, and can’t afford the luxury of spontaneous travel, no need to fret…
Your company will thank you.
2. Negotiate with the Right People
The lower in rank an employee is, the less likely it is that they will have the power of negotiation, which is usually reserved for managers.
Of course, here’s the sticky part: the lower ranked employees are there to filter out people from getting to anyone higher up. If they didn’t, the manager would be swarmed like the last cupcake at an obesity awareness convention.
“So how do I get to the manager?“
Uh, Duh- Ask.
If a manager materializes, immediately introduce yourself with a handshake (business time).
In a hotel first ask:
“How busy are you guys lately?“
When they reply, say:
“I like this place a lot and want to stay, but the place across the street has a great deal on one of their rooms (know the price of a close hotel that’s slightly cheaper ahead of time) and the rooms over here are just a little out of my price range. Is there anything you can do for me?“
(Remember: Do this very close to the date you are coming and DO NOT act like you are dependent on staying there).
For a flight, first ask:
“I just came in last minute, and it’s a spontaneous thing, but do you have any space available on the flight to xyz?“
(This shows that you could take it or leave it and gives you room to negotiate).
If they do, ask their price. When they give it to you, reply with,
“Ahh… that’s a little more than I want to pay, I was thinking more around (lower price), can you help me out at all?”
The first time you ask, the manager might “not be there at the moment” and you will have to leave a message. Leave your name, number, and ask them to note that you need to be reached within the next 2 business days.
3. Never Get Upset Slightly upbeat and carefree is the best attitude to have. A neutral demeanor is fine. slightly disappointed will do.
Anger is terrible. It’s worse than paying full price. Because no matter what happens NO ONE will want to do anything for anyone that is insulting them, talking down to them, or disrespecting them. Treat people as equals, otherwise you’ll be treated like a child throwing a tantrum- to the corner you go.
4. Have a Number in MindIf you’re building a website and want it done for 300 or less, stick to that. Know your price, don’t accept more than you want to pay, and be willing to walk away from something if it doesn’t make the cut.
5. Aim Way Lower than that NumberLet’s say when you’re looking to build your website, the developer bids on the project for $350. Don’t counter with your “number” in the above rule. Go lower. Way lower.
” You guys look like an awesome team, but I was thinking more along the lines of $240. That’s just a BIT too high….“
They then might bid again at $315
This leads us to the final rule…
6. Get to the PointWe’re all grown ups. No one wants to go back and forth ALL DAY. Don’t give a long explanation and don’t overdo your sincerity. People can tell when you are B.S.ing them. Everyone by this time knows what’s going on.
When they bid at that $315, reply back one more time,
“Wow, that’s a good deal and I really wish I could work with you guys. However, the maximum I’m going to be willing to pay is $295.”
Whatever they bid after this, take it or leave it. Remember, you’re both compromising. Stick to your number but also remember that they have a business to run to. If they are willing to compromise with you and you’re getting a phenomenal deal, don’t pass up that opportunity because it was $5 too much.
There isn’t much you can’t negotiate- try it out at retail stores, the local auto dealer, furniture stores, etc
If it’s a business, they want yours.
While you guys are working on negotiating to save for your next big adventure, I’ll be drooling over the Go Pro Hero. In too many of my videos I’ve been using some crappy camera I had on hand or a cell phone. Silly Rabbit.
All the best,
Posted on July 7th, 2011