We all want to save money right? Especially if you can save money by getting exactly what you want at a lower price. The key to achieving this is having a good negotiating technique and employing it whenever you can. Now I’m from a country (England) where we are not renowned for our negotiation skills, a point made amusingly in the following video:
However after a period of unemployment I decided in desperation to try out IT Sales as a career. I was not a very good salesman (something that the owner of the company I worked for would doubtless confirm!), but it did teach me something about negotiation. I was paid based on the amount of profit that I earned for my company, so if I sold something for £900 then the profit on the deal could be doubled by negotiating the purchase price from £850 to £800. Of course when buying things for myself I’m usually not thinking of selling them again, but any money saved is very useful. The one thing that I took away from this job was:
“You can always try and improve a deal”
This is not the same as saying that you always WILL be able to improve it, but if you don’t ask (or investigate) you will definitely never get. My sales job involved a lot of cold calling and hard negotiating. The only way to do it well was to not care what people thought of me. If you are going to get the best deal on things that you buy in all instances then you will have to start to think the same way.
How and When to Negotiate
Negotiation techniques work best for big-ticket items like cars, furniture, home improvements etc. Never take what you are first offered, make a confident counter offer even if it seems ridiculously low. This is the point where most people fail with negotiation – they don’t want to make a counter offer or make it too high. They feel embarrassed about making an offer and think that the person they are dealing with will think they’re cheap. Don’t fall into this trap – it’s your money after all. Bolster your resolve to negotiate by finding out how much money the company will make on a typical sale or how stupid the sales advisor would think you are if you pay full price! The information about the profit that the company makes on a sale will also be useful to counter some of the sales advisor’s arguments.
Once you have made an offer/counter offer you should find that the negotiation process becomes a bit easier (presuming that the sales representative is willing to enter into it). Once you are into the negotiation use the following techniques to help you:
- If the sales advisor is not willing to negotiate then just walk away. This may change their mind, but if it doesn’t you can always consider buying somewhere else. Never be afraid to walk away from a deal, you can always (despite what the sales advisor might say) come back if you can’t find it cheaper anywhere else. Another good tip is to leave your contact details so that if they change their mind they can contact you.
- Use your knowledge of the profit that is being made on the deal to counter the typical argument, “but that’s less than we paid for it”. Tell the sales advisor that you know they normally make on a deal and that your offer still leaves them some profit.
- If the person that you are dealing with says that they don’t have the authority to give you a discount then ask to be seen by their manager.
- If you can’t get the price any lower then you can sometimes have more luck asking for extras to be included for nothing.
All of the above may seem difficult to put into practice, but try to remember that a good sales advisor will relish the challenge of a skilled negotiator and will settle on a price that benefits you both in the end.
In Part 2 I will cover some more negotiation techniques and some real-life uses for negotiation and sales skills.