The ability to effectively negotiate is an essential life skill. If you don’t develop negotiation skills, you will pay more than you could have for a car, a house and you’ll even accept less money for a job offer. Learning tricks to help you in a negotiation will not only save you money or depending on the situation make you more money, but it will also improve your communication skills and set you apart from people who simply accept the first offer.
Know Your Target & Walkaway Prices
You should go into any negotiation only after you have thoroughly researched the market prices and decided the price you would like to get and your absolute walkaway price. It’s important to know the going rates for whatever you are negotiating, whether it is a product like a car or if it is a job position. Research the industry and find comparable prices to help you make your decision. Having a solid understanding of the current prices will enable you to be more confident with your target and walkaway prices and help you avoid straying from them. Don’t change your mind during the negotiation based on something the other party said.
Understand The Interests of Both Sides
It’s important to look at the negotiation from both sides of the table before you are actually sitting there. Consider the criteria that needs to be met aside from the price. For a car or house, these may be features or terms of the agreement. For a job offer, consider paid time off, work hours, commute time, etc. To be successful at negotiating, think just as much about the other party’s motives and concerns. They too have a criteria that they are looking to meet before they come to an agreement. For a homeowner or car salesman, this may be the timing of the deal - which you might be able to control by going to a dealership at the end of the month/year or moving the closing date on a house to meet a homeowner’s requirement.
Consider The Relationship With The Other Party
This will usually be rather obvious, but it’s still necessary to consider. Is the other party someone that you’ll have to deal with going forward, like your potential boss or a regular client? Or is it a car salesman or homeowner who you won’t talk to after you close the deal? You should always conduct a negotiation professionally, but recognize that different relationships dictate the outcome: win-lose, win-win, lose-win, lose-lose. You wouldn’t burn a bridge with someone who you regularly have to negotiate with as part of your job or that you have to see everyday just to get your way.
Listen More, Talk Less
When you’re in a negotiation you want to listen to every word the other party is saying and do your best to say the very minimum. There is an 80/20 rule that says during a negotiation you should be listening and looking 80% of the time and talking for only 20%. Obviously this is not always possible, but do yourself a favor and focus on what the other party is saying and their body language. Think before you speak and avoid giving away any information they could use against you.
Don’t Accept The First Offer
Negotiation experts disagree about whether you should make the first offer or not, but one thing most agree on is that you shouldn’t accept the first offer. The other party also has a target price and a walkaway price and this means that there is always a better offer behind the first one. While it might not always be possible to negotiate the price, you can get a better offer based on additional perks or terms of the agreement.
Avoid The Quick Deal
This goes hand in hand with not accepting the first offer, but there’s more to it than just that. Don’t give in to the pressure if the other party utilizes a take-it-or-leave-it strategy. Understand that offers are rarely non-negotiable so focus on the content of the offer and give a counteroffer that meets both parties needs. You should not feel pressured during the process and realize that you can and should walk away if the other party isn’t willing to compromise.
Being confident during a negotiation can make a huge difference in terms of getting what you want and coming to an agreement. Read 6 Powerful Tips To Portray Self-Confidence so you can be fully prepared for your next negotiation.
Improving your negotiation skills can benefit your life in many ways. They will make the difference between paying top dollar or snagging a great deal. These skills can also allow you to avoid buyers remorse. In a professional setting, you can increase your salary or get better benefits from a job offer. Utilizing these skills with repeat clients, you can develop a win-win relationship where both sides are happy and get what they want. Effective negotiation skills will help you be more financially responsible and achieve your financial goals.
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