Five Small Business Tricks for Negotiating Deals
Negotiations require decision-making, determination and a little bit of deviousness. To help you get the best deal out of your next negotiation, here are five of the best tricks around.
Stay silentYou would feel incredibly intimidated negotiating with the stone heads of Mount Rushmore, and you want to inspire the same kind of awe in your counterpart. Just remember that you are not required to respond to any comment or question. Staying silent will create pressure for the other person to speak and likely reveal more than they wish.
Lee Miller, an expert on negotiating and the author of A Woman's Guide to Successful Negotiating, says that silence is a very powerful negotiating tactic. "It lets the other side imagine whatever it is that they fear most without you ever having to commit to a position," explains Miller.
Ask a seemingly innocent questionIn negotiations, you have to read in between each and every line. Stay aware of any information you divulge, while making a subtle attempt to seek details from the other party.
From a single inquiry, you may determine who makes the decisions, whether you will need to consult a specialist and how likely you are to come to a conclusion during this meeting. Miller suggests open-ended questions such as: "In a perfect world, what would you see this deal looking like?" or "Why doesn't that work for you?"
Likewise, you should take great care when answering any questions. Information is an essential currency in negotiations, and you should protect what you have.
Send unspoken signalsYour facial expressions and body language can communicate quite effectively when used at the right time. If your counterpart offers an unfavorable deal, and you want to show your disagreement, feel free to slightly frown. Do not, however, overdo the act, for you should always avoid an excessive show of emotion. If you end up over-acting, you also run the risk of losing the other person's trust. In short, use wisely and sparingly for the best effect.
Play hot potatoUse this tactic to trade off a difficult situation, hopefully leaving the other party with the challenge. For example, if you are making an offer to purchase equipment, tell the seller you can only afford $10,000. You are essentially claiming that your hands are tied and pushing the hot potato onto the seller. Keep in mind this tactic can lead to a challenging back and forth, and the other person may be telling the truth about the company's circumstances.
AnchoringIn a way, anchoring is similar to subliminal messaging; it encourages the other person to fixate on a particular thought. When you make an initial statement, the other person will likely use those terms as a close gauge.
Miller presents the example of a car dealer who offers you $1,000 off of the sticker price. "You want to anchor on the dealer's cost," explains Miller. "You might, for example, offer $500 over their cost.
If you are negotiating up from the cost rather than down from the sticker price you will almost always get a better deal. This form of high-low anchoring is what we typically think of as anchoring when we negotiate.
Miller also recommends concept anchoring, which focuses on the idea rather than the numbers. For example, if the dealer offers you a discount, anchor the discussion around the dealer's profit. Concept anchoring is another powerful means of negotiating to your advantage. When trying this method, just make sure you make a reasonable first offer, or your counterpart will ignore the original anchor completely.