Do you have a good negotiating story? Tell us about it. Leave a comment about how you got a great deal on your house, negotiated a raise, or handled some other transaction. (And feel free to stay anonymous on this one.)
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Do you have a good negotiating story? Tell us about it. Leave a comment about how you got a great deal on your house, negotiated a raise, or handled some other transaction. (And feel free to stay anonymous on this one.)
Tony Thomas
on 27 Feb 08Everyone wants a win-win outcome. You’re not at that point in a negotiation unless each party can no longer improve their position. Don’t believe what they tell you about making the first offer, do it. Making the first offer is the best was to establish that mental anchor that will serve you well throughout the process.
Samuel Adams
on 27 Feb 08Yes I have several great stories, but no, I’m not going to give away these stories for nothing.
Mark
on 27 Feb 08Just got XM Radio for 1/2 off.
I have been a customer for the past year, and they were handing out a $77 deal for the first year if you pay for the entire year.
My year was up and I was about to get my first bill at 15.99 a month or whatever it is.
I called two days ago and said I want the $77 deal again or you can close my account. They balked sent me to the account closing department. I got over there and asked again.
They said the best he could do was $9.99 a month. Which by my math is not $77 a year. I said ok close my account.
On hold again and next thing I know. I am getting the $77 deal.
At this point its not worth more than $77 for XM.
carlivar
on 27 Feb 08Any “media subscription service” seems to follow the XM flow as you described. DirecTV is the same way. You get the best deals from the “account closing” department, but the trick is that you must be willing to actually walk away.
This is true for any negotiation. If you are emotionally invested you are at a disadvantage. You must be willing to simply walk away. Especially with car salespeople.
I highly recommend the book You Can Negotiate Anything. My dad gave it to me when I was in high school.
Negotiation is both skill and art. I enjoy it. I’m not a big fan of CarMax and Saturn dealers and “fixed pricing”. These are for weak people! Hehe.
jkottke
on 27 Feb 08I’m a poor negotiator, but my dad is pretty good at it. I remember going with him to a car dealership once to buy a junky but good-running truck. While my little sister and I sat in the car, he spent two hours haggling. He walked out at least twice and kept escalating up to the manager before getting the price down from $2300 to around $400.
What made the whole thing work is that my dad knows tons about cars, a lot about buying & selling cars, and he knew what that truck was worth and wasn’t going to pay more. He also knew that it was likely a trade-in and that they’d paid less for it than it was worth. Knowledge is negotiating power but like Tony Thomas said in the first comment, both parties have to get something out of the deal.
Pat
on 27 Feb 08Got a raise from $48k salary to $100k salary in one job change. They really needed somebody with my experience (.NET, SQL, etc.) on short notice (before their .NET guru left). I was told by their .NET guru (a friend of mine) that they might be interesting in paying up to $100k (he basically recruited me), and when the company asked how much I was looking for (after interviewing me), I was able to tell them “I’m looking for $100k” with a straight face. (That was harder to do in 2003.) They said OK, and got started on the offer. When I told my friend (the .NET guru) that they offered me $100k, he was totally amazed, in spite of his tip. Hurray for doubling your salary! I haven’t gone back into the 5-digit range since. Now if I could just get those expenses down…
ML
on 27 Feb 08“We don’t have a budget in mind”
When we used to bid for projects, potential clients would always say they weren’t sure what their budget was which was frustrating. Based on a tip from an industry vet, we figured out a good tactic for these situations…
Them: We don’t know what our budget is.
Us: Well, we can build sites for as much as (throw out a ridiculously high number).
Them: Oh no, we’re not looking to spend that much.
Us: So what were you thinking?
Them: Give a range of what they had in mind all along.
“Talk to the manager”
I remember buying a guitar at a music store. During negotiations, the sales guy told me he needed to check with his manager. He’d go away and then come back in a few minutes. Eventually, I wound up buying the guitar for what I figured was a really good deal.
A year or two later, I found out this “sales guy” was actually the owner of the store. The “check with the manager” thing was all just a ploy for my benefit. Silly me!
The Jamaican Haggle
A friend of mine, I’ll call him D, was at a market in Jamaica looking at trinkets. Here’s how he would negotiate for an item:
D: How much?
Vendor: 20J
D: I’ll give you 10.
Vendor: 15.
D: 9.
Vendor: No, you’re supposed to go up!
D: 8.
Vendor: Fine, fine. I’ll take 8.
From then on we referred to this backwards technique as the Jamaican Haggle.
Matt
on 27 Feb 08I just broke up with my live-in girlfriend of 2-years this morning. In fact, the drama is still going on as we speak. The house is under my name only, so that won’t be an issue. But, I was able to negotiate her leaving me the Dyson vacuum cleaner ($400) and the oak pool table ($2000); both items she paid for. Now, the hardest part, will be negotiating on when she moves out of the house.
Don Schenck
on 27 Feb 08Remember: The first one to mention a number loses.
When I was dating, I told my girlfriend that if we got married, I’d divorce her if she got fat.
She agreed. Thirty years next November.
I WIN!
Trevor Pierce
on 27 Feb 08This is one topic I have an actual story to contribute. A year ago my wife and I moved to a new apartment and felt the Comcast Triple Play was the best deal for high-speed internet, cable and VOIP phone. $99 a month was great, but the $75 they wanted for “installation” sounded ridiculous. So when I scheduled the service install, I called the rep on it, saying there really wasn’t any installation to be done, everything was plug and play. She agreed and removed the charge.
It turns out there was some installation to be done, but they were nearly four hours late, so I didn’t lose any sleep. And I didn’t pay what amounts to a graft charge.
Steve Bradford
on 27 Feb 08Best book I ever read on negotiation is NO by Jim Camp
http://www.amazon.com/No-Only-Negotiating-System-Need/dp/0307345742/ref=bxgy_cc_b_img_b
Many call his style contrarian but just the first chapter changed how I related to the world in general.
I think the mindset and concepts would closely align with 37s.
Brandon
on 27 Feb 08I once bought a car for 25% off.
Years before, I had a dealer try and take me for a ride on a 5 year lease, where when I totaled what they wanted down and the lease payments, I would have been paying more than if I bought the car outright. Needless to say, I didn’t do the deal.
I remember looking around the dealership that night and it was packed with people. Knowing that there were probably dozens of others that were getting the same “deal”, it really made me mad. I swore that never again would I waste my time like that.
It was time to buy a new car and I had one picked out. I was looking for a one year old Accord with high mileage for its age. At the time, I drove about 50 miles a week, so I knew I could recoup mileage. Also, mileage overage is a big hit on the value of the car, so it provided more reason for discount.
After researching (thats key) I found one that I knew the dealer couldn’t have given more than $16,300 for on trade-in. So I decided I would offer $16,800 for it, final answer. $500 lets the dealer make a little, covers their costs and lets the salesperson get a little commission. I went in early on a Saturday morning, with my financing already handled (don’t let the dealer know that up front) and made my offer. The asking price for the car? $21,995. The salesperson took my offer to the manager, and countered with $19,995. I said, “I told you that I will pay $16,800 for this car. If you can’t do that, that is okay. I can buy any one of the other 25 accords I’ve looked at.” He returned to the manager, and came back, accepting my initial offer of $16,800. “Now if we can just get your financing paperwork started…” he said. “Actually, I’ve already taken care of that. Here’s my check.” pwnd. Sometimes dealers will give on the sale price, planning to get it back on the financing, so don’t give them that option.
My keys: • Do your homework • Decide up front what you will pay, not what they will accept • Get your financing from your bank. This isn’t 100%, but if you line it up, then find out the dealer can do better, good for you. • Don’t be afraid to walk away. Cars are just things. If you do a deal that you don’t like, you will resent it as long as you own the car • Be fair. Its not nice to be a jerk. Let the salesperson know up front you want the car, you are serious, and if you can’t get the deal done in 30 minutes, you are leaving. No need to drag out something that isn’t going to work out.
Terry Sutton
on 27 Feb 08I wanted to take over my brother’s cell phone contract. The phone company said no problem. But….
In order to take over his plan, I had to pay a $25 contract fee, a $25 reconnection fee, and a $25 phone number change fee. Plus, I would loose the (great) options I had on my original plan that had been grandfathered in (more daily minutes, free after 5pm, etc)
I told them that they had two options: 1. Waive the $75 in fees and grandfather my old benefits back in or 2. Loose two customers
Logic prevailed. I paid no fees, and they kept two customers.
carlivar
on 27 Feb 08Yeah another trick salespeople will use is to ask you your budget. We just finished a big backyard landscaping project. Whenever you’re getting bids from contractors the first thing they ask you is your budget. I’ve learned to never answer this question. If you tell them your budget is $25k, what do you know, their bid will be between $24k-$30k (I think they assume you’ll go over a little bit or scale back).
There’s no reason anyone bidding on a job should need to know your budget. That’s your information only. You tell them exactly what you want and their job is to give you back a number. If they are difficult about it just move on.
Mike Rundle
on 27 Feb 08Man this is a legendary thread. I especially love Matt Ruby’s comment about the guitar, and the negotiation to keep the Dyson. Carry on.
Sam
on 27 Feb 08My business partner just wrote a great piece on negotiation. Here it is:
The next time you sit down to enter a negotiation try to explore a different perspective.
1. What does the other party hope to gain from this agreement?
2. What constitutes success from their perspective?
3. How can you help them accomplish these goals?
You see, the truth in negotiation is that we will always think about what we want to gain from the relationship. The problem comes in when we get so focused on what we hope to gain that we lose focus on what are counter-part needs and our value begins to slip. So, how is this true?
Q. Would you like your first date with a new guy or gal to come after a seed of doubt has been planted in their mind?
A. I can’t speak for you, but I want friendships to begin on a solid foundation. Trust and comfort will follow much easier after this foundation has been laid.
Q. How does a young child or even a graduate student feel after working and studying so hard for a class only to find he received a B-?
A. The answer is… empty! It’s your job to help them get the A+ they need.
Your ultimate goal in negotiations should be enough to satisfy your team, and create the feeling that your counter-part hit a home run.
Ahmad Alhashemi
on 27 Feb 08“You Can Negotiate Anything” by Herb Cohen is highly recommended. Even if you don’t like his techniques, reading it is eye opening. Hearing a negotiation will never be the same.
“The spare part will be available in 45 days” Me and my brother bought two of the same car at the same time. Due to an issue inherent in the design of the car, both cars had the same hose melt within the same week. We asked three different trusted garages and they all said that driving the car in this state was hazardous.
We went directly to the dealer to get a replacement. They said it will be available in 45 days. I was shocked. I tried to negotiate it lightly at first, but I wasn’t going anywhere.
Me: I have two cars, they are both broken. I cannot leave until you give me the spare parts. Them: We’ll close in two hours, there is no point in you staying here. Me: I don’t care if you close in two hours, I’m staying. Them: the manager will be here tomorrow morning, you can talk to him then. Me: I’ll spend the night here, you have a very comfortable couch (they did), and I’ll talk to him Them: Whatever!
So I went and sat on the couch, and spent my time browsing the mobile internet. As time passed by and closing time was nearing, they started to become really nervous. I dropped my ear as they started discussing it among themselves, they gave up a lot of information without knowing.
The manager could pull some strings and get the parts much earlier, but he was home, most probably asleep right now, they could call him but they’d rather not.
Then they started talking to me, with a much better tone. This time, it was them who wanted something from me: they wanted me to leave so that they don’t have to stay after closing time to deal with me.
This time they offered me to get the part in 30 days, then 15 days, but I insisted I wanted it now. Armed with knowledge about their situation and my new negotiating position, I maneuvered my way into convincing them to call the manager.
It was clear from the managers voice that he was eager to end the call quickly and go back to bed. I used the same techniques again and told him I will not end the call or leave the shop until I get the part. Time to get the part went quickly from 15 days, to 10 then to 4. He said this is really the best he can do.
If you’ve read Cohen’s book, you will know that my primary weapon in this negotiation was time. I gave them the impression that I had all the time in the world while emphasizing the fact that they had a deadline.
Before I hang up the phone with the manager…
Me: thank you very much, you saved my day. Him: you are most welcome. Me: I will come tomorrow afternoon to personally thank you for this Him (terrified): no, sir, really, you don’t have to. Me: no, I insist, I will see you tomorrow at 3:30pm (I knew he liked to leave at 4).
Come tomorrow, at exactly 2pm, I got a phone call from the dealer: the two parts were available right now.
From 45 days to next day, I have Cohen’s book to thank.
dave
on 27 Feb 08several years ago, a large software company acquired a small startup I was working for; it was one of three acquisitions they made at roughly the same time; the three companies formed a new satellite office 3000 miles away from the main headquarters.
our new office space was roughly a quarter mile from a brand new, high end fitness club that was also used by the local NBA team. We wanted to get a group deal going, but our IT guy, who was doing the negotiating, was having trouble getting the price down to a level people could afford (over $90/month).
After a lot of back and forth, we sent one of the business development guys over, who pretty quickly figured out what they were optimizing for—they would give heavy discounts to companies with a high participation rate.
So he basically convinced them that we were still actually three separate companies, and that by coincidence, only one of the companies was really interested in joining the gym.
With a 100% participation rate, our monthly cost dropped to about $35/month!
Tyler K.
on 27 Feb 08After two years out of college, I had worked my way up to making 48K a year, which I was pretty happy with. A friend coaxed me to come work with him contracting at a much larger company. He warned me that the recruiters would play hardball at salary negotiations. I’m pretty naive and just like working with cool people, so when they asked me what hourly rate I would desire, I answered honestly, (with a minor white lie, omitting units) “Right now, I’m making 48” The next day I received an offer for $48/ hour. Welcome to the wonderful world of contracting. I wanted to get in touch with my old physics teacher and remind him not to punish students for not labeling units on their answers. :)
Jeff W.
on 27 Feb 08Once I was paying for a hosted project management tool.
Then I found a product called ActiveCollab, which was Open Source at the time.
It allowed me to have all the same features as the hosted (paid subscription) for free AND I could host it on my own domain.
Negotiating doesn’t get much better than free.
Matt
on 27 Feb 08This is a fun story. I was in Morocco with friends and we had decided to spend two days in the Atlas mountains. At the village where we were staying our mountain guide doubled as an agent for the women who wove rugs in the homes nearby. I had decided before the trip that I would come home with a rug, but the starting price was absurdly out of range for a student, and so I used that as my negotiating point. After three quarters of an hour of acknowledging the needs of the village but insisting on my relative lack of wealth, I was declared an honorary Berber for my haggling technique, offered tea, and given a rug for a tiny fraction of the price. Both our guide and I had a good time in the back and forth, and goodwill from a day spent together meant that there were no hard feelings. After I put my prize away, we whiled the night away over tea and conversation.
EGM
on 27 Feb 08My uncle is in the auto dealership business. He taught me this trick for negotiating a vehicle.
1) After selecting what vehicle you want (along with any options you want), then load the vehicle request up with a bunch of options that you know you don’t want. Have the dealer quote you on that vehicle with all those options.
2) Typcially, the dealer is going to haggle with you. You have to do this negotiation. Be a hardliner and be willing to walk away if you feel like you aren’t getting the discount you need (it’s hard to give hard and fast rules for this part).
3) In general, the dealer is going to do the negotiation by discounting a certain percentage off the whole package (vehicle and options). Once you’ve sort of settled on a price for the entire package, then tell the dealer that you no longer want the extra options you threw in (like a sun roof, navigation system, undercoating…whatever). Instead of backing these options out at the reduced percentage included in the initial negotiated price, they will typically toss them out at 100% value. Thus, your overall discount for the remaining options that you do want and the vehicle are increased.
I did this in Houston, Texas on an Honda CRV and ended up with a really great deal. Sure enough, it worked exactly as my uncle said it would. He told me that very experienced salesmen don’t always fall for this. But he told us to pick the youngest looking sales guy we could find and that would increase our chances for success. I guess it’s sort of a math trick, but I’ll be damned if it didn’t work like a charm.
Jeff W.
on 27 Feb 08Why does the 37svn.com say this post has “22 comment Latest by EGM ”. Then when you click on this post, it says “12 comments Latest by Brandon”.
Well, it looks like my comment was deleted … and 9 others.
Kevin Milden
on 27 Feb 08Having nothing to lose, willing to walk away at any time and having patience to wait until you get exactly what you want is the way to negotiate.
The buyer usually has the upper hand unless what you are selling is unique or overvalued.
Visiting car dealerships without being in the market for buying a car will allow you to hone your negotiation skills. Try it some time and pay close attention to how long they make you wait just to lower the price $5.00.
Jeff W
on 27 Feb 0837signals, why are you deleting so many posts?
Once upon a time, you use to use the “troll” comment instead of deleting posts. I see 24 comments posted but only 12 show.
What gives?
Ian S.
on 27 Feb 08I was shopping for a car, found one I wanted and decided on a price I was willing to pay: $11,000. This was a price that would be fair to both parties (this is an important factor).
On Craig’s List and at dealers, the car was going to $13,500 on average. I called around and scheduled a few appointments to check out some cars. Went into a Mazda dealership, test drove and talked to the sales person for about a half hour. Told him my price and he wouldn’t do it. I walked out. Like someone else said, you have to be able to ditch it if you’re not getting exactly what you want (that is within reason).
Next day talk to another dealer. Selling the same car for the same price: $13,500. I told him I wanted it for 11k, he said no way. I left him my number and said call if you want to sell it for 11k. Next day got a message for him saying he could sell it to me for the price I wanted.
Two days later, I had the car, along with new brakes and spark plugs (legally have to be replaced by the dealer if they are worn down a certain amount) for $11,000 even.
My dad always told me, “everything can be negotiated”. I’m still working on it, but I think he was right.
ML
on 27 Feb 0837signals, why are you deleting so many posts?
Jeff, not sure what you’re talking about. We’re not deleting any posts and, as far as I can tell, they’re all showing up fine.
Don Schenck
on 27 Feb 08I was flying back from Las Vegas on Feb. 6. The turbulence while landing was incredible. I was literally scared for my life.
“God, put this plane safely on the ground and I’ll be in church Sunday.”
It landed. I went. He won.
Now, if I could just get the IRS to negotiate …
Don Schenck
on 27 Feb 08@ML: I was experiencing the same weirdness. Seems okay now.
carlivar
on 27 Feb 08@Don Schenck: the IRS does negotiate. I’ve heard many tales of a “negotiated settlement” for folks that owe back taxes. Probably not the negotiation you had in mind though!
By the way, another excellent negotiation tactic is Jack Nicholson’s diner order negotiation in Five Easy Pieces.
Steve
on 27 Feb 08Bought a car: Negotiated a price over about a week (typical back and forth). All the inventory came with a DVD player we had no use for. So I say “I don’t need a DVD player, I want order the car without the DVD player for the that price minus the 2 grand for the DVD player”. They knocked 2 more grand off the car.
Getting a raise: “I need a raise” “There isn’t anything I can do” “That’s BS, you’re a VP. Either you don’t think I’m worth it or you don’t think I’ll quit, which is it?” “How does five grand sound?” “Sounds great.”
Kyle Pike
on 27 Feb 08Sometimes all it takes is time and zero effort on your part. A friend of mine was in the neighborhood to finally buy a house after 6 years of apartments. He found a nice forclosure that the bank wanted $90,000 for.
Now, most everyone knows that the bank is trying to cover its losses, so my friend has it appraised. It appraised for for $75,000. Having no immediate need to buy the house, he called the bank, left his contact information and told him he would pay $67,500 for the house if and when they were interested.
Two months later, after not having sold the property, the bank called him and he payed exactly $67,500 for it. Eight months later he sold the house for $96,000 after spending exactly $8,000 in upgrades. The bank learned a valuable lesson: don’t be too eager.
Steve
on 27 Feb 08One more: Buying a bike computer, had a 10% student discount. Two models, $30 and $20. I tell him I want to $30 one. He has a calculator to do the discount. Tap tap tap, clear, tap tap tap, clear, “shit”, tap tap tap. Gets out a pencil and paper. Scribble scribble scribble, “shit, how about $20”. “Sounds great”.
Always let them do the math.
ML
on 27 Feb 08By the way, another excellent negotiation tactic is Jack Nicholson’s diner order negotiation in Five Easy Pieces.
Bobby: Wait a minute, I have made up my mind. I’d like a plain omelet, no potatoes on the plate. A cup of coffee and a side order of wheat toast.
Waitress: I’m sorry, we don’t have any side orders of toast. I’ll give you an English muffin or a coffee roll.
Bobby: What do you mean “you don’t make side orders of toast”? You make sandwiches, don’t you?
Waitress: Would you like to talk to the manager?
Bobby: You’ve got bread. And a toaster of some kind?
Waitress: I don’t make the rules.
Bobby: OK, I’ll make it as easy for you as I can. I’d like an omelet, plain, and a chicken salad sandwich on wheat toast, no mayonnaise, no butter, no lettuce. And a cup of coffee.
Waitress: A number two, chicken sal san. Hold the butter, the lettuce, the mayonnaise, and a cup of coffee. Anything else?
Bobby: Yeah, now all you have to do is hold the chicken, bring me the toast, give me a check for the chicken salad sandwich, and you haven’t broken any rules.
Full transcription here.
Anonymous Coward
on 27 Feb 08We were shopping for some new living room furniture and found a couch and a chair we really liked, but they were a little more than we wanted to spend. I hate negotiating, so spent an hour sitting on the couch trying to decide whether or not to make the purchase, which I didn’t want to at full price since furniture is marked up a retarded amount. Meanwhile, my wife is getting pissed and wants me to make a decision and the sales guy keeps asking me what I want to do. A bit later, the manager comes out and informs us that there is miraculously an unadvertised package discount for getting both the couch and the chair. Essentially ended up getting the chair for free. Not bad for just sitting around for an hour.
MattH
on 27 Feb 08About 9 years ago I was planning to ask for a raise. I had been a contractor for 2 years I wanted a 10% bump in my hourly rate. My wife told me to ask for 20%. I thought that was ridiculous, but she eventually talked me into at least asking.
The recruiter was very resistant, but in the end, I got an immediate $5000 bonus, my 10% raise, and a guaranteed 5% raise in 6 months. I don’t really like that you need to ask for more than you think you deserve just to get it, but I guess that’s the way things work.
i
on 27 Feb 08Phone
Jamie
on 27 Feb 08This comes from a friend of mine. This is an example of being out-negotiated by a much more experienced negotiator.
He worked for a company that was ready to go public. They brought in a big name consulting firm to help them put together the IPO, but they had no idea what this was going to cost.
They all sat around a table, about seven executives from the consulting company and a couple of representatives of the company wanting to go public. Everyone was friendly, but no one wanted to talk numbers in front of everyone else. Finally the head executive at the consulting company looked at the president of the company wanting to go public and said “Why don’t you write down a number of what you expect this to cost on a piece of paper and slide it over to me.”
The president wrote down a number and slid it over. The executive discretely picked it up, looked at it, then put it back down. With no change of demeanor, he looked back at the president of the company and said, “I’m sorry, I think you left a zero off that number.”
I’m not sure if the moral of the story is to better research what you expect things to cost or to bring six of your friends to intimidate the little guy. In any event, the little guy lost on this one.
Anon E Mouse
on 27 Feb 08This is a story about assisting a friend when buying a car. He had never purchased a new car, and since I’d been involved with that, he’d invited me along for test driving various cars (that can be fun, you know?). This person decided on a Mitsubishi. The lot it was on was new (this comes in later).
So, we confirmed with the sales guy that it was OK for me to participate in the ensuing negotiations. He was fine with that, but probably regretted the decision later.
Not wanting to open the conversations, we made him start. He said something like, “Well, these are popular cars so I can turn around and sell this to the next person the comes through that door. So, I’d like to start with 2% over invoice.”
We almost left there, as the offer was so ridiculous. After some note writing between us, I then basically told him, “Uh, no. Last time I got a new car, I negotiated off of the invoice price. MSRPs are silly, anyway.”
He got a bit flustered and stated they don’t do that. Well, that was easily solved by pointing at their AAA sign and pointing at my AAA card and forcing the hand. So, he pulls out the invoice. Then he says, “Well, for these sorts of deals, we usually start with 6% over invoice.”
A quick poke at the calculator showed that it was barely a smidgen off of MSRP. I actually laughed at him (though I don’t think he liked that very much).
“Alright,” I say, starting to see a waste of time coming, “the last time I got a car, it was for $25 above invoice.” That was actually a lie; it was really $50 over invoice, but I wanted to make a point.
The sales got got all flustered (again), and started talking how they just opened so they weren’t guaranteed to sell enough for the invoice price to matter. Yet, there was still about 4% listed on their invoice that they would get back if they did sell enough.
So, I simply stated that if they couldn’t sell to us, then they were probably right about that. They probably couldn’t sell enough. (Apparently also a lie from their part, too, since they had multiple lots that counted towards their minimums.)
Ultimately, we were about ready to walk to go to a competing lot when we settled on $200 over invoice. I’m sure they made plenty more on it than that, but we left not feeling fleeced.
Experience like this led to one car sales person to giving my wife and I $50 cash out of their pocket to get dinner after 4 hours of negotiations on a car (what a pain).
That’s just one story… houses, retail outlets, of foreign places where everything is a negotiation (think Hong Kong).
Geoff
on 27 Feb 08This story is more about luck than skill. Last year, my wife and I were selling an investment property. As it happened, two different homebuilders owned the houses on either side of us, and both were building tear-down spec homes.
I had never met either one of them, but got their numbers off of the signs in the yards. I called each one and left them a message: “Hey, we want to sell our house. Let us know if you’re interested.”
One called me back immediately, and we scheduled a time to meet the next day. The other one left me a message that night that he’d like to meet in a few days.
So I met with the first builder in front of his spec house (which is next to my house). He hemmed and hawed when I told him my price. “There’s no way we can pay that…” Bla bla bla. My response was, “Well, I haven’t even listed it yet, much less put it on Craigslist. You may be right, but if it turns out no one’s interested, I may be coming back to you with a lower price.”
Right at that moment, a guy pulls up in front of the spec house on the other side. The builder I’m talking to shouts over to him, “Hey, if you are thinking about buying that house, you should come look at mine right here, and if you don’t like it, I’ll be renovating this one that’s between the two.” (he was pointing at my house, as the house he would soon be renovating).
The guy he was shouting to turned out to be the other builder. His response was, “Oh yeah. Funny you should say that, cause I just left the owner of that house a message and I intend to buy that house this week.”
The guy I was talking to immediately turned back to me, and said, “I’ll give you your price.”
Luck, of course. But the lesson learned is it is easier to sell things when lots of people want them.
Jed
on 28 Feb 08Here in Chicago last summer, I:
- Negotiated away the “sign up fee” at a gym and still got the lowest price, by agreeing to pay for the whole year up front.
- Cut down the deposit on apartment rental simply by asking the landlord to check with our previous landlords for confirmation that we’d be the best tenants she ever had and will never have a late payment.
Constantine
on 28 Feb 08“I’d like to start with 2% over invoice.” … Ultimately, we were about ready to walk to go to a competing lot when we settled on $200 over invoice. I’m sure they made plenty more on it than that, but we left not feeling fleeced.
I mean, assuming that this car was invoiced between $20k and $30k, you saved about $200 – $400. I mean, yes, that’s money in your pocket that you wouldn’t have otherwise, but it doesn’t sound like you got the deal of the year or anything. Am I misreading his opening price vs. the price you ultimately got it for?
Indi
on 28 Feb 08This is more a story of perseverance than negotiating, but it taught me a lot. My daughter loves Miley Cyrus and wanted to see her in concert. My wife joined Miley World for first crack at tickets. Quite infamously those tickets were sold within minutes to broker bots. So even though my wife called in right away the best ticket left at the Anaheim Pond was in nosebleed territory. I told her, oh well, tough luck.
Instead of letting it end there she sent off a letter to Miley World about the unfairness of it it all, etc. About a month later she received an email saying she had been selected to get some seats that were being released. I said, obvious scam but she called anyway. Turns out it was legit and they said go down to the box office and there will be tickets there in her name.
So she goes to the box office and no one has a clue what she’s talking about. She manages to get the promoter on the phone and keeps him on the phone until the box office manager shows up … who also hasn’t heard about the deal. My wife then prods the promoter until he faxes the box office manager the details on the spot and doesn’t let him go until the manager verifies he got the fax and everything is cool.
So basically because my wife was so tenacious and wouldn’t be put off, our family got tickets five rows back from the stage for face value after they were already being sold by brokers for upwards of $2600. The guy who was there ahead of her and almost walked out when the box office was clueless but hung around when he heard my wife calling the promoter also got his tickets.
I love my wife. BTW, the show was great.
Jeff
on 28 Feb 08As a professional negotiator, I am sure I could bore you with stories of negotiating success (and failure). But since other folks mentioned Mr. Cohen and Mr. Camp, I thought I would take this great opportunity to share my Five Fundamental Skills for Effective Negotiation.
Based in part on research involving those two experts, I removed the tricks and tips and went for the skills absolutely necessary, yet almost always lacking, for a successful negotiation. I’ve given dozens of talks on these skills – for salespeople, buyers, individuals and C-level executives. Now you get to see this (relatively obvious) list, too. Here, they are, in order of performance (usually):
Information Gathering: As others have pointed out with a lot of the car buying examples, you MUST know your position thoroughly… as well as the other side’s. You need to know your wiggle room and theirs – and you have to know it cold.
Strategic Thinking: Once you’ve gathered your intel, you need to be able to assimilate it into a negotiation strategy. In other words, you need the ability to think three steps ahead. The heat of negotiations tends to make people say stupid things – and unprepared people are more likely to blurt out something they didn’t want to say.
Time Management: Have a thorough understanding of your time constraints. Again using the car example, you never buy a car with a vehicle that’s barely getting you to the lot – the salesperson knows that you have no time. Likewise, the other car example where the person was going to show up at 3:30pm when the seller liked to leave at 4pm is a perfect use of the time management skill.
Perception of Power: A few of the other comments talked about being the “little guy” or having a smaller amount of potential influence because they weren’t a heavy buyer or large customer. ALWAYS remember that the fact that you’re at the table at all gives you power. The key is to remember that you want to balance the power equation or at least get it to move in your direction without appearing overbearing or oafish.
Communication: Finally, as others have realized here and elsewhere, you need to be able to communicate your needs, wants and desires and… more importantly, you need to be able to understand what the other side wants from you. Communication is more than just talking – it’s active listening and body language, too.
If you do nothing more than remember these Five Fundamental Skills, your negotiation abilities will increase dramatically. You’ll exude confidence because of your proper planning (information gathering and strategic thinking), you’ll remain calm (time management and power) and you’ll be able to explain what you want in a way that the other side can understand (communication). Once you master these five, go grab a tip/trick book to learn the tactics that others use so you can increase your level of planning. ;)
Lordaych
on 28 Feb 08Constantine: I believe the commenter meant to say “2% over MSRP.”. Don’t you hate it when you manage to say exactly the opposite of what you meant?
Here’s my story: so I’m looking for mattresses—such an evil market! Different stores carry various near-identical models of the same “make” to deliberately obfuscate the true value of the mattress; I’m amazed at how hard it is to google around and get any idea.
I’m at mattress king, initially having eyeballed the two salesman on the floor, and have zeroed in on a decent Simmons mattress; the asking price is around $1K. I’ve just looked at a comparable mattress elsewhere for around the same price but want to continue looking. There’s still “Mattress Firm” and “Denver Mattress Company” for me to investigate.
Salesman #1 tells me mattress king has the best selection and prices—whoop dee doo. He’s trying to make a quick sale but I’m not even looking to negotiate at this point. Suddenly his phone rings and he goes to pick it up. I notice that salesman #2 is suspiciously absent all of the sudden. At this point I am expected to suspend my disbelief as salesman #1 “talks to his manager.”. How fortuitous for him to call! I hear one end of the scripted conversation and can’t help but laugh. “The factory is overstocked” and needs to make room for new models stat!...he can drop the price to $750.
Still not interested and somewhat put off by the cheesiness of the charade, I make the mistake of announcing the specific store I intend to check out next. He goes into a tirade about how poorly-manufactured their mattresses are, and nobody beats the king! The poor guy is so sweaty and worked-up I can’t wonder if he’s on the verge of getting canned, but I’m not here to give him a helping hand.
Unfortunately the wife later settled on an even more expensive mattress at the Mattress Firm. The one guy there was clearly less desperate and didn’t seem all too excited to see us looking around. I actually liked being somewhat ignored by this point.
We negotiated $200 off, free delivery, a mattress pad, and some pillows, but it was so effortless I kinda figured we got the half-arsed (vs hard-arsed) standard discount.
Anon E Mouse
on 28 Feb 08@Constantine: I miswrote; oops—that starting was 2% over MSRP, not invoice. He then switched to 6% over invoice; $1200 on a 20k car (I forget what the final cost was).
It’s been a while, but I believe the car was somewhere in the 20k range. Exactly what the total savings was, I can’t recall—I tried to dismiss the MSRP number since I considered it irrelevant at the time. Still, savings hundreds or thousands on a car purchase is satisfying when it’s an obnoxious car sales person and you’re basically spending their time to negotiate down what they’ll make off it.
Also, more to the point, was that I saved someone else the money - not myself - in this case. They thought you negotiated off of MSRP, at best. These days, the difference between MSRP and invoice is usually at least a couple of thousand on this price of a car.
More recently, I purchased a brand new hybrid. I was able to get that down below invoice, but I had to actually leave the place and make them call me. It wasn’t as satisfying since they weren’t selling the cars at all and the manufacturer was kicking back large amounts to the dealer to try to move cars—and I couldn’t find out what that amount was (and it basically changed the dealers “true cost” amount).
Perhaps a better story for savings and success would be buying a house during the rise of the bubble and not paying over the asking price in the ensuing offer war that Realtors were quick to warn of… but that’s not as much of a face-to-face discussion.
Jorn Mineur
on 28 Feb 08Customer: “Is your proposal subject to negotiation?” Me: “Sorry, but that’s impossible. I’m a lousy negotiator.”
NickW
on 28 Feb 08I was in the market last month for a new stereo. Unfortunately, there was only one place that sold that particular stereo in my area which I thought might limit my negotiating. I did go out to the internet and saw better prices and took them with me. The salesperson said that they would not match the internet, but only matched Best Buy prices. I told him that their were two possible outcomes, either I get the price from them or I go home and buy it on the internet. I received the friends and family price, which was exactly what the best internet prices was (saved about 150 bucks). Bottom line is that you have got to know what a fair price is and be ready to walk if you do not get it.
Ryan
on 28 Feb 08My wife is an extremely talented cook who has her own web site, has a weekly segment on our local TV station, does national product endorsements, etc. Recently she decided we need a new stove because we had a crappy electric one and it was difficult to do any real cooking on it.
After shopping around we discovered ABC Warehouse has clearance items for deep discounts, but they’ll also negotiate on their price. Our local store had her dream oven, but the discounted price was twice what she wanted to pay. As good as my wife cooks, she even better at getting a deal and immediately began planning her attack.
The next day she walked into the store ready for battle. She of course brought both our kids, it was well past their nap time, and they were pissed. She told the oldest salesman, who was visibly annoyed by the kids, that her husband had asked her to buy a new oven and told her to look at a particular model they had.
The guy showed her the unit and went into a long explanation of every feature. My wife would interrupt him saying, “I don’t even know what that is!” or “I don’t care. I’ll never use this damn thing”. The salesman became more and more frustrated all the while. The kids were getting even more upset, so she just let them loose in the store.
This really put the guy over the edge so she asks how much the damn thing costs. He says the price and she goes nuts telling him how ridiculous that is and why would anyone pay that much for crap they don’t need. She says her budget is X and that’s all she’d pay. They guy’s mouth drops and he says there’s no way he can go that low. It’s impossible because this is a very fancy unit with lots of expensive features. She says she only had X amount in cash so she can’t spend more. This was true because she took out exactly the amount she wanted to spend before she came to the store.
She knew the guy had to get rid of the unit because it was old stock and so pretends to have no idea that our kids are raising hell behind her while the guy breaks into a sweat. She points out all the tiny scratches, marks, and any other cosmetic problems she can find (despite the fact they’re on the back of the oven) and makes comments like “it’s probably the last one because no one wanted it”.
In the end, the guy does agree to her ridiculous offer. The price was so low that their computer system refused to let him enter it during checkout and he had to get someone with more authority to override the limit.
The kids were prompted rewarded for their stellar effort in helping their mom and we’ve enjoyed the oven ever since.
Humanitarian
on 28 Feb 08There is an exellent book on humanitarian negotiation techniques that can also be useful in other situations: Humanitarian Negotiation: A handbook for securing access, assistance and protection for civilians in armed conflict.
Mike
on 28 Feb 08I used to work for a legal aid attorney with mountains of experience who told me 1) when negotiating, work off of your piece of paper (meaning, you make the first offer) and 2) a good settlement is when nobody walks away happy.
Josh Williams
on 28 Feb 08This from my Grandfather:
During a vacation in France, my grandfather asked his waiter in a restaurant how much he could purchase the ornate cups that the poached eggs from breakfast had been served in.
The waiter replied, “The cups are not for sale.”
My grandfather responded, “Oh, well I’ll just take them then.”
“I’ll have them added to your check,” quipped the waiter.
“I’ll have them removed from your tip,” came my grandfather’s final offer.
When the check arrived, there were no cups on the bill. My grandfather carefully packaged up the cups with table napkins, tipped the waiter, and left the restaurant.
cronopio
on 28 Feb 08I read a book early on in my career, don’t remember the title, that cited negotiation stories from all kinds of angles: Middle East peace talks, unions, marital conflicts etc etc. The main conclusion was that being antagonistic is counteproductive. More often than not, the conflict is imaginary. The trick is to find out what you and the other party actually want, rather than what you both say you want. Very often, you can find a solution that meets both underlying wishes, or at least a compromise that both parties can live with.
James
on 28 Feb 08I’ve often found that sales negotiators are really just on automatic pilot; they quote policy, but when you confront them with some cold hard reality, they’ll be much more flexible.
Example: I recently applied for a business credit card. At the time I’d just opened a business account and because I didn’t have much of a credit record with the bank, I was told ‘we can’t give you a card’. I pointed out two things: the card was only going to be used for small payments (so no credit risk), and if the bank wouldn’t give me one, I’d have to go to one of their competitors instead. They gave me the card.
Earl
on 28 Feb 08A four-hour session with salespeople, sales managers, and finance people at a Honda dealership ended very well for my wife and I. A fair price for the car had been established, and the subject of negotiation was the amount for our trade, a less-than-reliable red convertible. We had been deadlocked for quite some time, about $1100 apart, when my wife, who had been sitting silently through the entire process, suddenly leaned in and said angrily, “You and I both know that you’re going to clean up that little red convertible and sell it for a good price to some college girl!” (she had bought it herself when she was in college) They conceded that she was entirely correct, and gave me what I asked for.
Scott
on 29 Feb 08Many years ago, in Hong Kong, I found myself in need of a new suitcase. You can buy a suitcase in a big store, and pay full price and then some, or you can buy one in a market and pay nearly anything – from very little to way too much. I adopted a very simple negotiating technique. Given that I’m caucasian, I walked up to the owner of the booth where the suitcase I’d chosen was sold, and asked “How much?” The immediate answer was “Four fifty!” (HK$450). Too much. So I repeated the question in Cantonese – to which the answer (and the price I paid) was “three fifty”... in Cantonese.
Jana
on 29 Feb 08In reference to “carlivar”’s comment about the landscaping contractor…I was a landscape contractor for twelve years, and after a couple of large miscommunications with clients, I started asking the question, “What is your budget?” I had to, I designed something which was a $5,000 project only to find out that the clients had in mind (totally unrealistically) to spend about $500. It was a total waste of my time to even work up a drawing and estimate for them. This is not something that is “free”! The contractor has to spend hours (sometimes as many as forty if it’s a big project) to prepare an estimate, all on his/her own time. It’s a tremendous effort and really not worth it to do for people who are playing with you.
JoJo
on 02 Mar 08@Samuel Adams
Your post was worthless. Of course, my post is worthless too, but only slightly less worthless than yours.
Nick
on 03 Mar 08Check out the Negotiation Tips Podcast http://www.negotiationtip.com/
Daryl
on 04 Mar 08I was buying a laser printer at a Best Buy type of store, (back when they cost $800 and I had limited cash.) I asked all kinds of questions about the printer, and then I made my planned move… “do you have an extended warranty available on these printers?” Boy did the salespersons eyes light up!!! (Extended warranties are the holy grail for sales people.) I then negotiated 10% off the price of the printer…(I’m sure that was the max i could have received, the sales person was after the extended warranty cash.) When we brought the printer to the till and he was ringing it in I came out with “And I think I’ll pass on the extended warranty… (he looked so sad… i felt sorry for a few seconds :)
This discussion is closed.