Saturday, September 26, 2009

What is the best way to negotiate for something?

Develop a strong alternative and Set the stage.

Have you ever tried to figure out why some people are better at negotiating/bargaining than others? What is their secret? What gives them the confidence to get what they want?

It does not matter whether you are negotiating a raise, buying a car, or getting a job -- the better your alternative to a failed negotiation the better.

Think about these alternatives - which one makes you feel more confident:
  • Trying to negotiate a raise when you do not have any other options or when you already have another job lined up that pays twice what you make?
  • Buying a car when you already have a great price from another dealer or when you have no alternatives?
In fact, when negotiating, you should put as much effort in developing your alternatives as you do in developing your plan of action. The better your alternatives the more confident you will be in the negotiation!

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Also, sometimes it makes sense to set the stage for the negotiation because whoever is first in defining the desired outcome of the negotiation will force the discussion to start from that point.

For example, lets say you want a 30% discount on your new car and the dealer is probably only willing to give you 5%. If you are first in stating that your desired outcome is 30%, then the discussion will start at that point and the dealer will try to get you down from there. However, if the dealer is first, then the discussion will start at 5% and the burden will be on you to try to get him up to your desired 30%.

So, plant the stake first.......but be careful when you do not know what the other side is willing to give. Maybe this dealer was willing to give you a 50% discount and you just said 30% instead. Ooops : )

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