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Showing posts from November, 2019

What is Black Friday and why it is not worth it if you are a great negotiator.

All last week was hyped up by ‘Black Friday’ Sales. But what is it and why do we have it in Australia and is it worth it?
Black Friday originates from the US and is the Friday after Thanksgiving which is the fourth Friday in November. Thanksgiving is a public holiday in the US. In the 1950s people used the Friday as a sick day and went shopping to get a head start in their Christmas shopping. Eventually in the 1960s this day turned into another paid leave day or shall we say into a paid ‘shopping day’. It has become a made-up event to drive consumerism.
Many believe the term ‘Black Friday’ is used for profit making; black numbers in the ledger books; but that is not entirely correct. While this is the meaning today it meant something totally different in the 50s and 60s.  According to Bonnie Taylor Blake, a researcher at the University of North California, the term originated in Philadelphia by the Philadelphia police as they saw the day as a terrible day. The city was filled with sh…

The anchoring effect when setting your price

In my recent post I spoke about why in a negotiation you should put your price on the table first. It is all about setting an expectation or an anchor. Once the anchor is set, the negotiation will revolve around the anchor point.
Most of the time we already store an anchor of certain products in our head. You expect to pay $4.00 for a Sushi roll for lunch, or $3.50 for a regular size coffee from the coffee shop next to your office. But what happens with products that we don’t buy very often, and we are less familiar with? A few weeks ago, our washing machine blew up. During the spin cycle smoke came out of the back of the washing machine which was the end of it. The last time I bought a washing machine was probably 7 or 8 years ago, so I had no idea how much a front loader from a particular brand would cost now.
What most of us do, and I did it too, is consult the internet and look at the next best website that sells washing machines. The first price we see for that product then be…

Who should make the first offer in a negotiation?

What should be your negotiation strategy when putting an offer on the table?
This is a popular question that I get asked quite often. Opinions differ; I strongly believe that no matter whether you are buying or selling, you should put the offer on the table first. By putting the offer on the table first you are setting an expectation or an anchor point. It is important that your offer is ambitious. If you are the buyer your offer needs to be below you maximum acceptance point; if you are the seller then your offer needs to be below your minimum acceptance point. You open ambitiously so you have room to move in the negotiation, this shows the other party that there is willingness to come to a deal. At the same time it evokes reciprocity, a basic law of social psychology; when we get something we feel obliged to give something in return.

Let's say you are looking to buy a house. The maximum you want to spend is $950,000; your maximum acceptance point is $950,000. You can't …

Negotiation strategies to lower interest rates on your home loan

Do you really get the best interest rate from your bank? Have you thought about how you could negotiate your interest rate down? When interest rates go down the banks give you something to keep you happy, so you won’t ask for more.  But could you get more? Why not try. Review your interest rates and speak to your bank to get a better rate. Don’t let them shut you down with the excuse that they have already reduced the rates. The reality is that there is more room to move because if they can give away something without you asking then they can probably give you more. Do your research Research what the competitors are offering. Use comparison websites and then call the bank to make sure that you would get this rate. Find out what the rate for new customers is Banks often offer great promotions to lure in new clients which existing clients don’t get. This is something that I find annoying, why don’t they reward loyalty instead. Set yourself a target rateSet yourself a target rate that you …

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