Negotiation is a dance. To have it go smoothly, you must be ultra-attentive to your own actions and the actions of your partner. Even the slightest, unexpected move can create a better – or worse – outcome. That’s why we’ve built negotiation tactics around the smartest actions. Here are 10:
1. Anchor them. State your very best price. When you establish your price point, you influence expectation. We tend to expect the first position we hear.
2. Throw junk. Point out negatives about whatever it is they’re trying to sell. You want to make your negotiation partner questions his or her price point. Before beginning negotiations, collect junk by asking internal stakeholders about their overall satisfaction with the vendor. Did they deliver on time? Was their customer service acceptable? Did they honor the fine print?
3. Woo them. With every bit of junk you throw, be sure to give them a positive statement, such as “We really want to make this work,” or “We really want to do business with you.”
You want to minimize conflict and open the party up to new ideas like a lower price.
4. Use competitors as leverage. Never let any vendor get too comfortable. Know your alternatives, be prepared to use them if you need to, and be sure to mention them in the negotiation.
5. Flinch. This one tactic, even if you did nothing else, could save you 2 to 3% a year. When your negotiation partner names their price, react negatively. It can as simple as a quick intake of breath to a raised eyebrow. Always be flinching.
6. Squeeze them. By giving them a squeeze, you’re making them insecure about their position. It’s as simple as saying, “You’ve got to do better than that,” or “You’ve got to sharpen your pencil.” You’re making it known that the price they’re offering you just isn’t good enough.
7. Put them on a deadline. Let them know they’ll lose your business if they don’t close the deal by a certain time. That’s why procurement professionals in Japan always want to know how long foreign sales professionals are going to be there, and then show them the time of their lives. They go golfing, catch sumo matches, and drink lots of sake. Then, after that last night of fun, they pound out the deal a few hours before the sales professional leaves. If he wants the deal, he has to give them the best price immediately.
8. Throw out a trial balloon. Gauge their feelings around a certain price point, or delivery or payment terms, for instance, by mentioning it without committing to it.
9. Nibble. Right when they think they’re on the verge of closing the sale, ask for something more. This could be free shipping, better payment terms, expedited delivery, and promotional items. Just a little something extra to sweeten the deal.
10. Avoid Irritators. These are passive-aggressive words and phrases that increase tension and skepticism — whether intentional or unintentional. They can include seemingly innocent phrases like “We’ve done our homework,” which implies they haven’t. Or, “We’ve been in business for 20 years and know what we’re doing,” which implies they’re novices. In essence, you never want to imply your negotiation partner is less than you.
Remember, as you leverage these tactics, you’re going to be doing business together a long time if you come to agreement. So use them thoughtfully, but do use them. Here’s why, a recent Harvard Business Review article stated that those who make the negotiation dance a little more challenging created a higher sense of satisfaction in the end.
Check out these resources if you want more insight into how to create better agreements: