Dr. Jim Anderson explains why it can be so difficult to reach an agreement during a negotiation — there are ghosts in the room!
Dr. Anderson shows that the other side of the table has to make sure that many parties have their needs met by any agreement that is reached. He shows you how to make sure that you can “see” all of the ghosts in the room…
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Welcome to the new world order: consumers are learning to haggle. In the extended global economic recession, consumers who never used to even think about bargaining are suddenly starting to haggle over every deal. Is this a good thing or a bad thing?
As you might expect, haggling has arrived first at the firms that have been the hardest hit by the recession. This includes the hotel business as well as clothes and electronics stores. All three of these firms are very interested in moving merchandise as quickly as possible. That’s why they are now open to making deals with their customers.
The market research firm America’s Research Group has just completed a study that shows that 72% of American consumers reported that they had haggled in the past four months. This is up from 56% just a year ago. What’s really telling is that the same consumers report that they have been successful in getting a better deal 80% of the time.
Consumers are discovering that negotiating for a better deal seems to work with just about any business transaction. Formerly off-limits firms including the New York Plaza hotel and Nordstrom are starting to warm to the idea of having their customers bargain with them for the best deal.
Customers are finding that they may not always be able to get a discount on an item that they are interested in buying. However, getting the seller to cover shipping or the sales tax seems to work. If that fails, then having the seller include an additional item in order to complete the deal has also proven to be successful.
Many firms are creating programs to deal with consumers who want a better deal. However, in order to protect their margins, they are not advertising these programs – they only offer them when the consumer pushes them.
Credit card companies are notorious for doing this. They are willing to negotiate on interest rates and late fees. However, the only way customers can find out where the companies are flexible are by asking.
The arrival of the new style of haggling for better deals is showing up in the hardest hit industries: cars, real estate, etc. However, we should expect this to spread quickly to other industries.
The big question will be whether or not this marks a fundamental change in how consumers go shopping: are they going to expect to have to bargain for everything in the future? No matter what the answer is, in the short term this type of sales negotiating is bound to boost sales. Sales negotiators who learn how to take advantage of this new style of buying will be able to close better deals and close them quicker.
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Recently I was talking with some friends of mine who are planning on using the current depressed real estate market to “trade up” and get a bigger / better house. What they wanted to do was use that “win-win” technique that they had heard others talking about and they wanted me to teach them how…
Sales Negotiators Know How To Use Concessions
You can never say it too many times: in order to reach an agreement with the other side during a sales negotiation, you ALWAYS have to make some sort of concession(s). The trick to doing this correctly is to make sure that you don’t make so many concessions that when a deal is struck that you’re left feeling that you didn’t get a good deal.
Once upon a time I was in the process of moving to start a new job and had to sell my house. I had found an interested buyer and we were in the processing of negotiating a selling price. We had gotten pretty close to an agreement, but we were not quite there.
I knew that all of the appliances in the house were pretty much on their last legs, and I was concerned that the buyer was going to ask me to replace them as a part of the deal. I has already moved so that would have been a big inconvenience to contract out the work, oversee it, and pay for it. However, the buyer only came back and asked me to replace the hot water heaters. I negotiated just paying him cash to have him take care of it and then we were able to strike a deal.
[Editors Note: I later found out that he pocketed the cash that I gave him, didn't fix the hot water heaters which were in the attic, and shortly thereafter they failed and flooded the house. Ouch - there's a lesson in there somewhere]
Here are few additional guidelines on how to make concessions work for you during your next sales negotiation:
When you negotiate, which of these suggestions do you think is the most important? Did I leave anything off of my list? Should anything be removed from the list? Leave me a comment and let me know what you are thinking.
Concessions Are A Powerful Negotiation Tool - Learn To Use Them Correctly!
Sales negotiating is all about concessions. You make them, the other side makes them. Finally, if enough has been given, then you should be able to reach a common middle ground where a deal can be struck.
The trick is knowing how and when you should make your concessions. Here are some tips from the pros to make sure that you do it correctly:
When you negotiate, which of these suggestions do you think is the most important? Did I leave anything off of my list? Should anything be removed from the list? Leave me a comment and let me know what you are thinking.
The Escalating Authority Sales Tactic Is Crude But Often Works
Picture this scene: it was about 20 years ago (ouch!) and I was still dating my wife when she suddenly had to replace her car. She knew exactly what she wanted: a Honda Civic with a manual transmission. There was a local Honda dealer near where she lived so one evening we went there to have a talk about buying a car.
The salesman that we talked with was the “older guy who reminds you of your uncle” variety. I had an opportunity to sit back and watch my soon-to-be-my-wife bargain with him over the price. She started low, he started high, and after a bit of back-and-forth, they were still fairly far apart. Now my bride-to-be had done her homework and had called a bank to find out how much this car was really worth (20 years ago = no real Internet). So she knew what the correct outcome of this sales negotiation needed to be.
The salesman that we were dealing with looked at the gap in offered / accepted prices and said, of course, “are you sure that you can’t do any better than this”. When my girlfriend said “No”. He then said “I’m going to have to go talk with my boss about this…” And off he went.
Returning about 10 minutes later, he had a slightly lower price, but still the gulf between what my girlfriend was willing to pay and his new lower price was great. TWO MORE TIMES HE WENT BACK TO TALK WITH HIS BOSS. I couldn’t believe this – I was watching a classic Greek play being staged before my very eyes. At any rate, my girlfriend got the price that she was asking for in the end after about 90 minutes of haggling. What was going on here?
I didn’t know the name of this sales negotiation tactic at the time, but I do now. It’s called the “Escalating Authority” tactic. This tactic uses the need to have a deal approved by a reluctant higher authority in order to gain more concessions from the other side of the table.
This tactic is used by salespeople all the time. The reason that they use it is because it often works. Here’s what a salesperson can expect to get out of using the “Escalating Authority” tactic:
The party that this tactic is being used on is not without defenses. There are several counter measures that can be put in place in order to diminish or eliminate the effectiveness of this sales negotiation tactic:
In the end, the Escalating Authority tactic is a fairly crude negotiating tool that is used most often by amateur negotiators. It can be countered easily and effectively. Keep your eyes open and make sure that you spot it when someone starts to use it on you – the best Escalating Authority tacic defense is a good offense!
Have you ever had the Escalating Authority tactic used on you during a negotiation? How did you respond to it? In the end was it successful? Have you ever had a chance to use it during a negotiation? Leave me a comment and let me know what you are thinking.
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