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7 Tactics For Your Next Negotiation

Are you always negotiating?  You should be.  Life is a continual series of negotiations.  And the reason we negotiate is quite simple: we may get something at a better value than we would accepting it at face value.  Making purchases at the best value can get you something you need, but could otherwise not afford, and it can be the best bet against inflation we have.  Whether setting pricing with vendors, or making large purchases for your business, leasing rental space or negotiating salaries with your employees, your negotiations will be the most important decisions your business makes.  Their effects on your profit can last for a very long time

The reason you negotiate is what the cost will mean for you, not what it will mean for the supplier.  Have a good idea what the math is for what you can afford and still keep your profit goal.  If the "ask" exceeds it, negotiate until you can afford it, or do not accept the product or service.  This is where the maxim, "necessity is the mother of invention", comes into play.  It is what you do after you walked away from the negotiation.

The seven points below are tactics, not strategies.  There are lots of books on negotiation strategies, and some of them are even worthwhile.  But if you're not a constant negotiator, with laser focus on profitability, you can benefit from mastering a few tactics before being an expert on crafting strategies.  Here are a few of the tactics I have used that have served me well over time.  

1) "Is That Your Best Offer?"

This tactic/question is my all-time favorite.  I use this when I am at the end of a negotiation, still on the fence, and the other party knows it.  I am showing that my profit is being squeezed, and I am not interested in having that happen.  My body language is saying I am about to turn the offer down, but I always smile a little at the end of that sentence.  This is when I get a better price if one is possible.  And it usually is. 

2) Make Small Subtractions

When selling something like a house or a car, the value assigned is a stake in the ground, but it is never viewed as the final price.  We expect to negotiate (except in hot real estate markets).  Resist dropping the price of an asset faster and steeper than necessary.  When negotiating a sale of anything you own, keep in mind that with every offer and counter offer, the value permanently drops with every turn.  This is not what YOU want.  You want to retain as much value/money as possible.  So keep any subtractions in price as small as possible, while keeping the opposing party interested in the asset.

3) "I'll Meet You In The Middle"

When you can afford to, especially when it will mean a significant drop in price, this tactic is the closest to win/win as you can get.  I was watching the ultimate negotiating reality show, Pawn Stars, on the History Channel today while writing this post.  The three generations of owners on the show know very well when sellers need the money more than they need to leave with their integrity or pride intact.  But every once in a while, they will split the difference and call it a day.  Sometimes you cannot allow a relatively small amount to kill a deal.  This is a great tactic to employ when dealing with someone you do a lot of business with, or when you want to try something new.   

4) Silence

As the head of a company, you will be pitched by many salespeople on a wide variety of things.  Salesmen like to talk.  Listening is a forgotten art.  The next time you are in a room with a salesman, refrain from talking and just listen.  People who like to talk will fill the silence.  And eventually they will fill that silence with better offers and discounts.  It's usually a matter of time.  

5) Take an Immediate Negative Position

The opposite of tactic #4 is simply to say "no" at the very beginning.  This works because the salesperson usually has a quota, you are part of it, and there must be a sale.  Therefore, taking the "no sale here" stance quickly will most likely end the presentation portion of the negotiation, and pass quickly to the discounting part of the negotiation in order to reengage you.  

6) "Take It Or Leave It"

This statement marks the end of the negotiation.  If you are the one who said it, you've announced that you are no longer going to budge an inch.  You've placed the ball back in the salesperson's court.  If you're dealing with someone who can or needs to make a deal, this tactic will have a high success rate.

7) "Cash Today" 

There's a reason cash is king.  The mere mention of cash makes people poised to act.  This tactic is the final arrow in my quiver.  Once you've dropped the price as low as possible, then aim lower and pull the trigger on this tactic.  You may not believe the final price.  

Traits that get the deal done are a sense of humor and respect for the other party, regardless of whether you do the deal.  Your focus on profitability keeps it business, not personal.  Remember, when engaging in any of these tactics, get the price you can afford, or the tactic did nothing for you.

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