It always felt inappropriate to me to negotiate about the price in a store. There is already a price on the article, so why negotiate? That completely changed when I bought a new couch for my apartment. Lured in by attractive commercials and awesome deals, I walked into the store. Not realizing I just entered one big negotiation arena!
After a quick round through the store, my eyes are immediately attracted to the perfect couch. It feels very comfortable, it fits my house and I can already picture myself laying down on it after an exhausting basketball training. I am sure, this is going to be my couch!
As soon as I tell the salesman which couch I want, he boomerangs a price. Of course he has a ‘special discount’ for me. He will take € 200 off of the retail price, if I take the couch right now. A price way above my budget still. No way that I am paying € 1.600 for a couch! Before I even can say ‘no’, the salesman lowers the price with another € 400 of the price. ‘Wow, that is easy!’, I think, and I realize the game has started! Not only do I want to buy a couch, the salesman wants to sell a couch. We actually have the same goal: me walking out of the store with a brand new couch! Now it is getting interesting. Suddenly I am feeling even more comfortable, sitting on the couch.
Dealing like a king
I lay down on the couch once more. The salesman sees his chances of selling rapidly growing. With confidence, I tell him that € 1.200 is still too much. Based on ads of € 800, I entered the store and that makes € 1.200 too much to decide about on the spot. Instantly, I get an offer of € 1.000. Now it is becoming really attractive to me. The price of the couch went down from € 1.800 to € 1.000 in a heartbeat. This is fun! I feel like a king on ‘my’ couch!
Now it is becoming really attractive to me. The price of the couch went down from € 1.800 to € 1.000 in a heartbeat. This is fun! I feel like a king on ‘my’ couch!
Still, I have the feeling we didn’t reach the lowest price possible yet. The salesman turns the question to me: ‘What do you want to pay for this couch to close the deal right now?’ He obviously wants to sell. When I tell him I will take the couch for the amount of € 800, he sees an opportunity. He calls in his manager. We have a little chat and the supervisor quickly approves a € 900 selling price. I do agree with that as well.
The salesman shakes my hand, just as enthusiastically as when I walked into the store, and runs off to his next customer. He is ready for another game!
How you will become a natural negotiator as well
Negotiating is a fun and a challenging game. Have you ever compared it to board games like Risk, Monopoly or Colonists of Catan? All the players have ‘winning’ as a goal. Using different assignments and strategies, it could be possible that you will help each other with closing a striking deal together.
As with buying a couch or negotiating the terms of your labor agreement, it is possible that you and the party you negotiate with have the same goals. You can actually work together to achieve them! Yes, even with negotiations about your labor agreement you can work towards the same goal: you signing for that dream job. Look at the other person as a partner, instead of an opponent.
Curious how you too can make a game out of negotiating? With the following simple, not per se easy, insights you take the first steps towards your negotiating strategy!
1. Which goals do both parties have?
It is important to know what the other party is trying to achieve. For if you know both parties’ goals, you can work much more efficiently towards a successful outcome. It will surprise you how often in the process of negotiating there are common goals. How to find out which goals your negotiation partner is striving for? Ask him or her! Show that you have empathy for his or her goals. Be understanding towards the position of your negotiating partner. In this way you can negotiate as equal human beings.
2. What are the alternatives?
As soon as you know what the negotiation goals are, it is much easier to assess both parties’ alternatives. It is important to have a clear view of your own alternative options. For example, knowing about that other store that is selling couches. Or that other, cheaper, couch. Equally as important are the alternatives that your negotiation partner has. Is, for example, another person interested in the couch? Based on the alternatives, you can determine the upper and lower limits of your negotiating space. When you have all this knowledge, it will be easier to make a proposal on your part. You don’t have to be afraid that you will completely miss the point with your proposal. Now you will be feeling a lot more comfortable, sitting at the negotiation table.
3. Negotiate with the decision maker!
Always negotiate with the one who holds the wallet. When you negotiate with the intermediary, the salesman, there are always more goals at stake. A salesman works form guidelines and a framework that he received from his management. These are often in the way of really tough negotiations. Always ask for the one who’s in charge of the money to have a sit at the negotiation-table with you: the one who will ultimately make the decision.
Just like it was possible to get the selling party to lower the retail price with almost € 1.000 in no-time, if you play it smart, your salary can be increased with thousands of euros, just as easily. If you are successful, it is worth celebrating, of course. Be proud when the deal is closed. High five your negotiation partner! Together you’ve played the negotiation game. The best thing for both parties has been reached!
Wondering how you can put these, and other insights, into practice? Do you want to know how you can improve yourself and make more steps in your negotiation skills? Click here!
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