The Art of Negotiating

by | May 26, 2021 | Daily Money Management, Finance

Female co-workers working on a project

Do you know the Negotiating Rule(s)?  You should!  There is not a day that goes by that I am not negotiating something. Whether it is a client’s cable bill, a vendor in my home, or a new contract – negotiation is the name of the game! 

There are three types of negotiators: soft bargainers, hard bargainers, and principled bargainers.

Hard bargaining emphasizes results. In contrast, the soft approach focuses on preserving the relationship before results. Principled negotiation involves drawing on objective criteria to settle differences of opinion.

Parties can often reach a better agreement through integrative negotiation — that is, by identifying interests where they have different preferences and making tradeoffs among them. I think it is important to embrace all types of negotiation tactics, as you might need a soft negotiation with your plumber and a more principled negotiation with your credit card company.

The Rule(s) of Negotiating

Since there seems to be no University of Negotiating, many great negotiators learn through practice and experience (of course natural talent doesn’t hurt).

  • Rule #1: Everything is negotiable. Your gas bill, your doctor’s bill, your debt — EVERYTHING is negotiable. If you don’t at least try to negotiate, you will miss out on saving money.
  • Rule #2: Know what you want before negotiating. Know what your ideal goal is in the negotiation (also called “the reach”); know what would be a win/win and know what you will settle for (called your “safety”).
  • Rule #3: Aim for a Win/Win negotiation. This is not easy and requires planning and research. Know what your opponent wants/needs for a win so that you can trade off and compromise.
  • Rule #4: Treat negotiating as a game…competition breeds results. Find a way to use this to your advantage.
  • Rule #5: Never believe anyone else is entirely on your side – remember #4. Negotiating is the ultimate game.. trust no one entirely if you intend to win.
  • Rule #6: Strive to be innocent. Playing coy is a strategic move, let your opponent think they are the expert and could teach you a thing or two. Play to their ego.
  • Rule #7: Ask lots and lots of questions — knowledge is leverage!

You may want to supplement your negotiation education with a few YouTube videos on the subject. You can get some ideas about body language and tone of voice that way. When you’re ready to take the plunge, remember: There’s no harm in asking us for some real time pointers.