Negotiation strategies that make money

BATNA stands for Best Alternative to a Negotiated Agreement. A BATNA is your power and the more BATNAs you have the more power you have in the negotiation. When you are buying a car, you have hundreds of BATNAs. There are lots of car dealers out there all wanting to sell you a car. Since there are so many alternatives your bargaining power is high. You can play the car dealers off against each other and you can use time and geography to your advantage. Time: find out when is the best time to buy; is it end of month when the car dealer needs to meet their budget? Or maybe end of financial year or end of year is better. Geography: If you are living in a big city why not go out of the city and buy your car from a dealer in a small town; you might get a better deal there than what you would in the city. What about when you are buying a house; if you buy the house to live in chances are you start to get emotionally attached to it and really want this house.  Real Es...

Never underestimate the negotiation capabilities of children. Being a young parent, I have realised how good kids are at negotiating. My 4-year-old daughter is already a very skilful negotiator using a variety of tactics to her advantage providing her with a successful outcome most of the time. She knows when to approach me to ask for something. Usually it is when I am busy or when I am just about to go on a work trip or have just returned from a work trip, playing with my conscious and guilt that I had been away again for some time. It is also how she makes the request. She puts a lot of effort into this by using her cutest smile, playing with my emotions and making it almost impossible to say no. Charm and an emotional connection go a long way. Children know how hard it is for their parents to say no when they put on their cutest smiles. People are emotional and playing on these emotions gets you a better negotiation outcome. She knows who to ask and when to ask. She kno...

When I speak with clients about upcoming negotiations at some point we talk about power and assess which party has more power and why. In most cases my clients believe that the other party has the power over them. They see their opponent as someone who is much bigger, has much more influence, is a tough negotiator and often gets the better deal. They feel powerless and are unsure on what to do to negotiate successfully. They look at the negotiation like a David versus Goliath. Only that David the courageous shepherd boy has been able to battle a giant that many have been so fearful of and demonstrated that size does not always matter. David won the battle as he was not scared, he was confident and prepared. He was in control of himself and did not let anyone influence him by their fears. He had a strategy and he stuck with it, he decided against heavy armour as he knew it would slow him down. By studying Goliath, David understood his strengths and weaknesses and could ther...

When a buyer and a seller negotiate over a deal it is in the interest of each party to get the best deal possible. Here are the four most common tactics buyers use in a negotiation in order to get to the best deal possible. The Russian Front This is a tactic whereby the buyer presents the seller with only two options.   One is so terrible; it feels like being sent to the Russian Front which makes you agree to the other options. Compared to the first option the second option does not look that bad now. Don’t make the other party put you under pressure, don’t accept either option. Ask for an alternative or come up with a counter proposal. Good guy bad guy In this tactic you have one person making very high demands. This person is also often cold an unapproachable. The aim is to intimidate the selling party. The good guy on the other hand has a more reasonable approach and shows a willingness to concede and come to a deal. The purpose of this tactic is to set the ...

Funny Money is ‘Money whose value has been artificially increased, or money that is not worth as much as it appears to be:   The banks have used funny money generated by creative accountancy to deal with vast amounts of public debt’ (Cambridge Dictionary) In negotiation people use ‘funny money’ as a strategy to make money look insignificant. The aim is to put the other party under pressure and make them agree to a deal that is unfavourable to them. This tactic is used especially when dealing with big numbers. Let’s say two parties are negotiating over a $12.25 million contract. The buying party is asking for a 2.25% discount. They make it look like it is only a small ask, so not much to the overall price. What they don’t mention is the dollar amount for good reason. When the situation is already tense and the selling party is already under pressure to get the deal the selling party might agree to the deal without even having checked the actual number because it did no...

I recently had to get an arborist to do some tree pruning at our house. An arborist is not someone that I would call on very often hence I wondered how do I know that I got the best offer? Yes, you can get a comparison quote, which I did get, but then again was this the best offer I could get? Here are 5 steps that assist in determining if you got the best offer: 1)      Build rapport and sympathy People like to deal with people they like, so why burn your bridges and play hard ball.   People like to be of help so assume good intentions build rapport and trust. 2)      Reject the offer politely Tell the other party that their price is too high. While you would like to consider them for the job you would like them to review their offer. 3)      Think about their motivations Put yourself in their shoes. What motivates them to get this work? Is it money, is it the prospect of more work or are d...

The menu of a restaurant is not just a list of food and drinks, it serves as a clever marketing tool that guides its guests into ordering what the restaurant wants to sell and subsequently makes more money. The expensive entrée on the top of the list A high-priced entrée on the top of the list serves as an anchor point. The Restaurant does not intend to sell this entrée as it merely serves to create the impression that the subsequent entrees are not as expensive. This strategy tempts customers to order the second most expensive dish that could also be more profitable to the restaurant. A descriptive menu increases sales Research by Wansinkj et al (2001) found that the more vividly the dishes and drinks are described the more sales increase, up to 27%. Attributes like textures, flavours, the origin or quality all contribute to an increase in sales. Offering meals in two sizes Sometimes meals are offered in two sizes however the customer has no idea what the differ...