Get What You Want: Negotiating like a pro
As children we made a case to stay up past our bedtime or have a cookie before dinner. Negotiating as an adult, from asking for a pay raise to a discounted product price, can be intimidating. The good news is that you don’t have to be a corporate head in a power suit to hold your own in a negotiation. Put that cookie aside and let’s get down to business. We’re here to walk you through the basics of negotiation in the adult world.
The most important key to negotiation success? Preparedness. Before a negotiation, compile facts and numbers to support your case. Think in the other party’s shoes to anticipate their negotiation goals and self-interests. Prepare a few concessions to offer if needed.
A first offer should be bold, since it’s the starting point for the rest of the negotiation. Don’t set a price or make an offer that is so unreasonable as to be insulting (or make you look completely out of touch), but don’t be afraid to push the envelope either. It’s all part of the game.
Know Your BATNA
This stands for “Best Alternative To a Negotiated Agreement.” It’s the next best option if the negotiation at hand doesn’t work out. The better it is, the more power you have. For example, when negotiating a cell phone contract, point out your option to switch to a comparable plan if your terms aren’t met.
Keep Calm and Quiet
Acting volatile and riled up in a negotiation can be off-putting. Channel your inner calm-but-assertive self. When making an offer, give your bid and then don’t say a word — even if it feels awkward. Let the other party figure out what to say next. Silence keeps people on their toes.
Honor Your Reservation Point
Decide on your parameters before going into a negotiation. This is the highest amount you are willing to spend or the lowest offer you’re willing to accept. If the negotiation doesn’t move forward favorably, don’t be persuaded to go past that reservation point. It’s better to walk than accept terms you can’t afford.
Salary: When a potential employer asks for your salary requirements, don’t give a number right off the bat. Ask, “What is the typical range for this position?” The reason is simple: By offering a number first, you may sell yourself short of what the company is willing to pay. If pressed for a number by a hardball hiring manager, give the expected salary range based on the field of work, location, and your experience level. Compensation is more than just salary, so include benefits and perks like bonuses and investment options in the conversation.
Cars: Car dealers expect you to negotiate, so research car features, sale incentives and prices before entering a dealership. Negotiate up from a new car’s invoice price (the price the dealership paid), rather than down from the sticker price. Find invoice prices for new cars at kbb.com and edmunds.com.
Cell phone contracts: Negotiate your cell phone contract at sign-up and every time it expires. Attracting a new customer costs more than retaining a current one, so it’s usually in a company’s best interest to keep you, even if that means giving a discount or deal. In addition to price, negotiate perks like extra minutes or phone upgrades.
Credit card rates: Call to negotiate your credit card interest rate every year. Remind the issuer of how long you’ve been with them, your track record of paying bills on tim, and your recent credit history. Junk mail can also come in handy here: hang onto the best credit card offers that come in the mail. Mention these offers to your credit card issuer with a polite, “I’d prefer to stay with you, but I’ve received card offers at X% interest and am willing to switch for a better rate.”
Negotiating isn’t just for business bigwigs — it’s a powerful tool in your financial life to both save more and earn more.