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You may not be drafting multi-million dollar real estate contracts or brokering major corporate acquisitions, but the fact is you’re negotiating from the minute you get up in the morning to the moment your head hits the pillow at night.
Whether you’re convincing your toddler to eat his breakfast, discussing your salary with your boss or buying a new car, you’re participating in the dance that is negotiation. Here’s how to do it well.
Negotiation expert Ed Brodow, author of Negotiation Boot Camp: How to Resolve Conflict, Satisfy Customers, and Make Better Deals, says it’s critical to get in the right mindset before wheeling and dealing. He refers to this as negotiation consciousness. “If you have a high negotiation consciousness, you’re assertive, not afraid to ask for what you want and challenge what [the other party] tells you,” he says.
It’s also important to identify your goals for the negotiation on the front end so you can measure how successful you were and, if necessary, refine your approach for the next go around. Whatever you’re after—a better price, a higher salary, Thai food for dinner—focusing on it from the get-go will help keep you motivated during the process.
Like just about everything else, preparation is half the battle. Marty Latz, founder of the Latz Negotiation Institute and author of Gain the Edge! Negotiating to Get What You Want, sums it up like this: “Information is power, so get it.” This means finding out what the other side says they want—what they really want—and what their underlying interests are. Then, “try to develop options that may satisfy their interests.”
Brodow offers an example. “Let’s say you go to buy a car and you want [the seller] to lower the price,” he says. “Instead of saying they’ve got all the power, ask why do they have to make the deal?” he suggests. Do they have a glut of inventory on the lot? Are they trying to make room for new models that are on the way? Once you find a compelling reason for them to work with you, use that information to your advantage to get the best deal possible.
“People who leave money on the table probably didn’t do their homework,” he adds.
After you’ve prepared for your negotiation, it’s time to play your cards. “A fundamental element of leverage is finding out what you’re going to do and what the other side is going to do if there is no deal,” says Latz. “I like to think of this as your plan B.”
Brodow also believes in having back-up options. “Once you say, ‘I have something else I can do,’ it gives you power,” he asserts. Case in point: you’re trying to negotiate a contract on a house you want to purchase. “If my plan A is buying that house, then my plan B is either staying in my current [residence] or finding another house that will serve my needs,” says Latz. “The better your plan B, the better your leverage for your plan A.”
To strengthen your plan B, you should continue to search for a new house while negotiating for your top choice. “You’ll probably find a plan B that will also satisfy your needs and interests,” says Latz, just in case you need it.
Sometimes your plan B is an unattractive option. Perhaps if you don’t seal the house deal, your current lease will expire and you’ll be without a place to live. Or maybe if you don’t get the raise you’re after, you won’t have enough money to pay some unexpected bills. When you’re leverage is weak, it’s important to have common sense on your side.
“There is a question in any negotiation: What is fair and reasonable?” says Latz. “The answer is that what is reasonable depends on credible standards.” For instance, if your house appraises for $250,000, then that is a fair asking price. If your salary research shows that someone in your industry in a position similar to yours earns an average of $50,000 per year, then it is reasonable to request this amount during a compensation negotiation. When you know you can’t win based on leverage, resorting to what is fair and reasonable can help you achieve victory.
Sometimes negotiating can get you exactly what you ask for. Other times, it can’t, but that’s not always a bad thing. For instance, if you approached your boss asking for a raise but instead got a nicer office, an extra week of vacation time and a telecommuting day, did you really lose?
“A successful negotiation is one in which both sides feel satisfied,” says Brodow. “My definition of satisfied is that your needs were met and not that you got everything you wanted.” At the end of the day, if you’re happy with the way things turned out—even if they didn’t go exactly as planned—then that’s reason to celebrate.
Negotiation expert and author Ed Brodow offers some of his top tips for successful negotiations.
1. Don’t be afraid to ask for what you want.
2. Don’t be in a hurry.
3. When you give something away, always get something in return.
4. Know your industry
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