(This post is a branch-off a previous entry on increasing income. You can check out that full post here!)
My background is in sales and business development, so I am no stranger when it comes to sitting across from people at a negotiation table. Before I left my last job, I was ranked #2 nationwide out of over 2,000 sales reps with the same job title.
I’m lucky to have enjoyed a lot of success thus far in my sales career! And I’ve definitely gained a lot of valuable life lessons along the way. One of the most important ones I’ve learned so far is that negotiation is powerful.
Becoming successful in sales requires a mastery of many different skills, but few of those are more important than negotiation. Whether you’re trying to get a higher salary, lower your phone bill, or purchase your next car – I believe anyone can benefit from learning how to negotiate better, not just salespeople.
In this post, I’ll outline 7 of the most important rules of negotiating I’ve learned and implemented over the years. Let’s jump right in.
1.) Build Rapport Quickly
This may seem like an unimportant formality, but its importance can’t be overstated. Through all of the sales meetings, job interviews, or contract negotiations I’ve ever had – I can’t think of a single time where the deal got done without rapport building.
Managers want to hire people they like. Businesses tend to give perks to people they like. Clients prefer to buy from people they like. Get the point?
Make sure you are liked by the people you want to negotiate with and I guarantee your success rate will skyrocket.
Some people are naturally gifted at building rapport; they make good first impressions and can establish a connection quickly. If that’s you, great! You’re already a step ahead. But for most people, rapport building is a skill they will need to build up.
Want to know my secret on building rapport? Listen and be genuinely engaged. Over the years I’ve been able to quickly connect with people I have nothing in common with, following that one simple rule.
I once negotiated a deal with a business owner who was an avid hunter; in contrast, I’ve never even fired a gun in my life. Want to know how I built rapport with him? I just asked him how he got into hunting. What were his favorite things to hunt? How could a newbie get into the hobby if I wanted to give it a shot? Etc.
I listened, stayed engaged, and let him talk for ~5-10 minutes on it before we got into our actual meeting, an hour later and the deal was closed.
Give it a shot next time! You can use the same technique with your boss before you ask for a raise, with your customer service rep before you ask for a lower rate, etc.
2.) Have Leverage
Another crucial aspect in negotiating is having leverage. For the purposes of negotiating, leverage can be anything that advantages you, or conversely, disadvantages the person you’re dealing with. Typically the party with more leverage in a negotiation comes out “ahead”.
Using scarcity and competition to your advantage here is key. Want a raise? Don’t just ask for one. Apply for a similar job with a higher pay, and once you get an offer – walk into your boss’ office with the letter in hand. Let them know other companies want you, and that you are valuable and scarce.
Want a lower cable bill? Don’t just call in and complain. Let them know you received a promotional offer in the mail from a competitor with lower rates – and then ask for something similar since you’ve been a longtime customer, and would rather stay with them.
Both scenarios will more likely work in your favor. Even better; if you started off those talks with friendly rapport building (like you should have) the other person is much more likely to agree to your requests once you apply the leverage.
3.) Be Confident
Confidence will come from practice. Don’t be too down on yourself if you lack confidence at first. Realize that it’s not the end of the world if you stumble with your words, or if your negotiations fall flat. You can always reload and try again later.
Once you’re successful a few times, your confidence will build, and you’ll start to really hone your craft. You’ll see what works and what doesn’t, and you’ll slowly become more self-assured. In the beginning, I believe it’s okay to ‘fake it till you make it’ in this department. Having fake confidence is better than no confidence, but be careful not to overdo it.
Most people can instantly detect fake bravado – and it comes off as sleazy and slick, not cool and collected. I’ve seen the loud, overly confident salesmen time and time again – their antics and success are not sustainable.
When you ask for something in a negotiation, ask confidently, and believe that you deserve what you ask for. Have good reasons to back up your ask, practice it over and over again, and your confidence will no doubt follow.
4.) Don’t Get Confrontational
Be prepared to handle objections. It’s just the nature of the game. The times where people agree to what you want without objecting are few and far between.
Can you lower your asking price on the house? “Sorry, we’re not really interested in below list price.”
Can I have a higher salary? “Sorry, we only review raise-requests at the end of the year.”
The key in handling objections is to never be confrontational.
I’ll repeat: just don’t do it. The chances of you getting what you want after yelling at the person you’re negotiating with are near 0%. A better way to handle objections or people who disagree with you, in general, is to use linguistic judo.
Acknowledge their concern, and see it from their point of view. Once you’ve affirmed their view, you can reiterate your point, or ask them to bend a little. Don’t disagree with someone’s views head-on like a car crashing into a wall. Instead, take the force of their objections and point/throw the force somewhere else like a judo master.
Most of the time, people’s objections are real concerns that you will need to address. Think about your answers ahead of time. Be a problem solver, not a creator of confrontation.
5.) Look For The Win-Win
The beautiful thing about negotiating is that it is not necessarily a zero-sum game. For those who are willing to think and be creative, win-win scenarios are ripe for the picking. Here’s an example:
Last year I completed an extensive remodel of one of my rental properties.
After it was finished, I realized that my newly remodeled property was significantly more desirable than other nearby rentals. So I bumped my asking rent by $200. After a week of screening tenants, I finally found one that I thought would be a ‘perfect fit’. There was only one problem; she was asking for $100 off of the monthly rent.
Now, I could have just told her no, and moved on to screening more tenants – but instead, I looked for the win-win. I told her I would be open to reducing the rent if she was willing to sign a two-year lease instead of a standard 1 year. She happily agreed, and we both won. She got her reduced monthly price, and in return, I got the security and reduced headache of having the same tenant for at least 2 years.
Look for win-win scenarios! They are the “golden tickets” of negotiations.
6.) Bring Future Value
Going back to the remodel I just talked about: I got a killer deal in contracted labor for that job.
I shaved literally 30% off of the original quoted price. Want to know how I did it? I promised the company I used, that if they gave me a good deal, that I would continue using them in the future.
For any business where you can be a repeat customer, use loyalty as an effective tool for leverage.
Want a good deal on that car? Let the dealer know you have a cousin who is also in the market. Let them know you’ll send good referrals their way.
The key here is to be authentic. Most people are not dumb, so don’t make promises you can’t keep. The contractor I used knew I was for real because he had worked on a different property I owned. He knew I was an investor, and he knew my word was good.
The future value tactic is only good if it’s the real deal.
7.) Don’t Split Hairs, Just Close
Sometimes negotiations will reach a point where both sides are at a standstill. If the gulf is too far to cross, then there’s honestly no point in trying to cross it. Sometimes you’ll be so far off, that it makes no sense to even talk. In those situations, it’s better to just walk away.
But on the opposite end of the spectrum, are deals that are close, but not closed. In those situations, don’t split hairs, just get the deal done! Especially if the negotiation is with someone who you’ll be working with again in the future. In that scenario, the long-term relationship is much more valuable than the short-term gains from one potential deal.
I.E. – One time I called my cable internet provider to ask for a promotional rate they were advertising online. It was about $30 cheaper per month than what I was currently paying. Of course the customer service rep. did not agree to it on the first ask. I went through all the motions, got sent “up the ladder” to their manager, and then to their retention department, etc. After about 45 minutes on the phone, I finally came to a standstill with the person I was talking to.
They agreed to give me $20 off per month because I was a loyal customer, but insisted that was the best they could do. Should I have just hung up and let all my work go to waste? No way.
$20 was not $30, but it was better than where I started; and rather than having my 45 minutes be for nothing – I agreed and decided not to split hairs. I didn’t want to spend any more time on the phone, and I definitely didn’t want to go through the hassle of switching to a different provider. I was happy with the result.
Some Closing Thoughts
Entire books have been written on negotiating and closing tactics, so by no means is this ‘all there is to it’.
These 7 steps are just things that I’ve found to have helped and worked for me.
I hope this post helps you in your own future negotiations; whether it’s getting a raise, haggling a service or even just lowering your bills! 🙂
I plan to post more sales tips and strategies in the future, so if you liked this content, subscribe to my email list and I’ll let you know when those posts go live.