Negotiation is a strange word, I think.
In a consumer sense, we often think of negotiation as getting a lower price for something we want. You’ve made up your mind that you want a particular house or car, and now it’s time to sit in the office and come to terms on a price.
On a larger scale, however, negotiations usually means trying to find a situation that is beneficial for both parties. Countries negotiate the terms of a treaty in order that both sides receive benefits. Is it different as a consumer? Are we too hardheaded when we want something?
Mr. Cheap, on the Money Smarts blog, was talking about negotiation tactics a few days ago and it got me thinking. He asked what are “ethical, effective negotiation techniques?”
After some time thinking about this I still don’t have an answer. I did, however, come up with some thoughts based on experiences, reading, or TV shows I have seen, and here they are:
Deal with someone who can deal
It’s almost pointless to go through all the motions of negotiation when the person is just sales-staff who is receiving an hourly wage. When it comes time to ask for a discount they will inevitably say they can’t (most likely true) and then they call over a manager who has no connection to you.
Building rapport is important as buyer or seller. So I now seek out the manager straight away. This has helped me when buying suits, cars or electronics.
Be willing to trade down
This was something gleaned from a TV show I saw that was based entirely on buying electronics. No matter what the product is, there is a good chance it is available in a few colours, or with slightly different options.
Ask what the most popular colour is. Then ask yourself if you need that colour. You may be able to get a discount just by selecting the navy blue model rather than the black or silver.
If you don’t mind that colour, it’s a win-win situation. You get a discount, and the store moves a product that may otherwise have to go back to the warehouse.
See if there are any manufacturer incentives
As far as I am concerned, perks can be just as important as a lower price. While the store may have moved their price as much as they can/are willing to, sometimes the manufacturer will have some sort of extra incentive.
It could be free extras, multi-product purchase discounts, or rebates on purchases. I remember getting a booklet of free oil changes and tune-ups this way. When we furnished our apartment, we also got a massive discount by going with two products by the same manufacturer.
Compare prices and know what you want
Information is a powerful tool, and knowing what other stores are charging for the same product is almost a sure way to get the price knocked down. If you know what you want, drop by a few stores to see what the price is, or check the internet. Just mentioning a competitor’s price is usually enough for the manager to mark the product down plus a little extra.
At the same time, be willing to walk away if it is something you don’t truly want/need. I know this seems to contradict my point about being willing to trade down, but let me explain: be willing to concede on things you care less about, and fight for want you do care about. For example, aside from pink, I don’t care what colour my cell phone is. But if it isn’t bi-lingual, I won’t consider buying it.
Do you want fries with that?
I’ve never worked in fast food, but the cliché fries question is the base of sales: it never hurts to ask.
This is not only as a seller, but works equally well when you have some rapport, and are the buyer. The worst thing that will happen is that they will say no. Ask for some add-ons. Ask for a better price.
When I worked in sales, I was asked “what can you throw in for me” far more often than I asked “would you be interested in a ____ as well?”
I know some of these aren’t negotiation tactics so much as ways to save money, but hopefully they give you some ideas. If anyone has any other ideas, feel free to write them in below.