Sunday, August 29, 2010

Negotiation Skills

by Paul William
5 steps to negotiating a better and smarter deal

Negotiation skills are a powerful asset in life. Understanding how to negotiate will help you get raises and promotions, get a better deal, and get out of paying stupid fees. These five steps will help you learn how to negotiate better and smarter.

1. Prepare

Before you begin negotiating (meeting with your boss or calling a company), take time to prepare for the negotiation. Think about what you want to accomplish and make it a concrete goal. "I want a 10% raise" is better than "I want more money."

Then, take some time to look at it from the other person's point of view. Why should they be willing to give you what you want? In the case of getting a raise, have you proven yourself to be a valuable asset to the company? If you're dealing with a business you buy from, have you been a customer for a long time or is it difficult to get new customers?

The key is to list your accomplishments and reasons why you should get what you want. If you've saved your company money or taken on new responsibilities, write down exactly what you have done. Good examples would be "saved the company $20,000 a
year by reducing waste in..." or "supervising ten more employees than last year." Be ready to justify your request with reasons that will appeal to the other person.

If you've been hit with a bogus fee, review your situation and be ready to explain what happened and why you don't think you should be charged. If you were misinformed by an employee of the company, make that clear when you call. This is also why
it's smart to keep a record of when and to whom you speak when you call a company. You can easily reference the conversation and the person if a problem arises in the future.

2. Choose the Right Time

Timing can greatly help your chances of negotiating successfully. If you're asking for a raise, try to do it right after you finished a major accomplishment or as you take on new responsibilities. Your boss will have a difficult time overlooking the current circumstances, making it easier to give you a raise.

Trying to get a better deal on your cell phone? Wait until your contract is just about to expire. (This works for other bills, too.) Businesses often spend quite a bit of money to get customers, so they'll often do what they can to keep you.
Negotiating when you'll have the option to cancel gives you more power.

3. Be Firm and Confident but Polite

Even if you are nervous or unsure, act confident and be firm as you negotiate. Weakness (real or perceived) puts the negotiating power back in the other person's hands, so avoid it at all costs. This simply means you should not act timid
when making your request. If you know you deserve a raise, act like it!

However, this doesn't mean you should be rude. Nobody likes a jerk. If you become hostile or impolite, people may refuse your request simply because they don't like you. Be pleasant, kind, and patient and you will be rewarded.

Another strategy is to use praise to your advantage. When negotiating a raise, show that you enjoy working there and are aligned with the company's interest. If you're trying to get a good deal with a company, comment on how you've enjoyed using
their product in the past. Let people know you appreciate their time and help and they'll be happy to help you again.

4. Be Ready to Respond

You should be ready to respond to any number of reactions you get. If the answer is yes, then express your thanks. If the person needs to get someone else's approval, let them know you appreciate their support. If the answer is no, things get a
little trickier.

If you're trying to lower your bills or get rid of bogus fees, don't give up at the first "no." Restate one of your reasons for why you should get what you're asking and follow that up with a leading question. Here's an example: "Well, I've been a
customer for 3 years and I'd hate to have to switch to [competitor]. What can you do to help me lower my bill (or get this fee waived)?" Do not follow up with a question that can be easily answered with a "yes" or "no." Push for a "what else" or "how" type question rather than simply saying "Are you sure?" or "OK."

Dealing with your employer is a bit different because you don't want to be so pushy you lose your job. If you think your boss is being unreasonable in denying your raise (i.e., you actually do deserve it), don't be afraid to ask for more details and insist on your accomplishments once again. Be polite but firm. "After saving the company $25,000/year and increasing efficiency by 15%, a 10% raise is a reasonable
award. In addition, comparable positions pay 20% more than my current salary so it is still good for the company."

If your boss still won't (or can't) budge, offer some alternatives that might not cost more money but are still beneficial to you. Increased vacation time, flexible hours, or the option to telecommute one day a week are a few examples. If these don't go over well, ask for concrete goals you can achieve to earn a raise and get an appointment to renegotiate in a few months.

5. Be Ready to Walk Away

Finally, you must be prepared to walk away if necessary. If a company won't offer you a discount, let them know you can get a better deal elsewhere (be specific) and thank them for their time. That's often enough to get what you ask for right away
(but you shouldn't abuse it).

If you are significantly underpaid, work very hard, and have not been able to get a raise, be ready to leave your employer and go elsewhere. I wouldn't use this as a negotiation tactic though. Even if your current employer offers to increase your
salary, they'll know you aren't loyal to the company and they may look to replace you. Your best bet is to start looking for a new job without letting your current boss know. Turn in your resignation after you have a firm offer from a new employer
and move on.

These Tips Do Work!

If you think these tips don't work, I'm proof that they do. Using these strategies, I've gotten 10% raises, lowered several of my bills, and had bogus fees waived several times. Again, preparation and confidence are key. You must know why you deserve to get what you're asking for and be willing to push for it if necessary. Many times, simply asking will get what you want because so many people fail to take that step.

This article has been reprinted with permission from Provident Planning . You can find the original article at Negotiation Skills . Paul Williams lives in Lancaster County, Pennsylvania and has a passion for teaching people about personal finance, especially from a Christian perspective. is dedicated to pursuing that passion.

Note from Lucy: This best tips to negotiation is to go prepared..... Know the facts... Last time TF and I bought a car we went to and found out how much the invoice price was for the car that I wanted to buy... I had some leverage by just knowing the facts... We ended up saving about $5,000. dollars on the deal..... Have a great week everyone!!


At 10:50 AM, Blogger Together We Save said...

Thanks for sharing these tips!!

At 9:33 AM, Blogger Putz said...

it makes me nervous to deal in the negotiating sphere, so i walk away even if i get the discount>>>i am finding i don't want{just don't want} the things i have to negotaiate for that bad, i was not born for this world>>>i would be better in a world not motivated by money>>>and when i do get a little i end up giving it away no questions asked>>>i guess that has nothing to do about what you are trying to say in this post< does it???????????

At 4:27 AM, Blogger jel said...

Howdy Lucy

At 11:04 AM, Blogger Big Dave T said...

At my company, everybody gets the same raise. If you think you deserve more, you have to convince someone else that they deserve less. Now THAT takes some negotiating.

At 8:58 AM, Blogger Granny Annie said...

I am happy not to be having to negotiate salary anymore but we still negotiate on purchases. Ron is the absolute best when it comes to either getting them to lower the price or getting them to throw in something else to "sweeten the deal". LOL

At 6:22 PM, Blogger Lucy Stern said...

Annie, way to go, Ron... I know many people who get some good things at garage sales by negotiating.... If I decide that an item is too much, I will try to negotiate or I just walk away and look for a better deal....

At 3:19 AM, Blogger Sanya saxena said...

Nice post!!! Good negotiating skills are essential to the smooth running of your business. Negotiation Skills Training

At 2:49 AM, Blogger Ahmed Saykot said...

Impressive blog! Thank you for sharing this worthy information with us.

Negotiation Skills


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