We usually make a counteroffer when told the price of a home or car that we want to buy, yet most of us treat other prices and policies as if they were set in stone. They’re not.
Every professional and financial interaction is an opportunity for negotiation. People who fail to take advantage of this are leaving thousands of dollars or more on the table each year.
Negotiation doesn’t mean offering lowball bids or making power plays. There are strategies that provide greater odds of success without the risk of appearing cheap or confrontational…
CITE THE COMPANY’S STANDARDS
Many companies have official standards, mission statements, advertising slogans or mottos that promise excellent service or quality. Service providers, including telecom companies, financial firms and hotels, are particularly likely to have these.
Examples: Red Roof Inn promises on its Web site “freshly renovated, cozy rooms” and “luxuries like incredibly comfortable bedding.” AT&T says on its site that its mission is to “connect people with their world, everywhere they live and work, and do it better than anyone else.”
When a company lets you down, browse its Web site, ads and any other printed materials for written statements about its standards, mission or the high quality it delivers. Write them down, then calmly and politely quote them to a company representative. Next, describe the problems you encountered, and ask the rep to gauge how your experience measures up to this promise or mission. If the employee agrees that your experience fell short, ask what he/she can do make up for this.
If the employee will not admit that you deserve compensation, calmly ask how the CEO of the company might react if he/she were brought into this conversation. Even if it is not realistic that the CEO of a big company would get personally involved in a minor disagreement, evoking the CEO forces the employee to consider the potential career fallout if a boss learned that he failed to live up to the company’s standards. Most employees would rather give a customer a discount or perk than risk negative career consequences, particularly if the customer is friendly and polite.
Options if you can’t find relevant written standards or slogans…
Ask a company rep questions that establish standards before describing your negative experience.
Example: Ask, “Does your company stand behind its services?” or “Does your company sell well-made products?” The answer will almost certainly be yes. Now describe your poor experience, and ask what the company can do for you to match the standards that the rep just described.
Ask an employee to estimate the value of the subpar goods or services you received.
Example: When the hot water in my expensive London hotel room didn’t work, I asked a front-desk clerk, “What is the value of my room without hot water?” He decided that it was half the normal room rate and reduced my bill.
Employees who sell big-ticket or big-margin items, such as furniture, appliances and jewelry, often earn much of their income through commissions or bonuses. The size of that commission or bonus usually is not tied simply to how much customers pay for items. When you negotiate with these salespeople, start not by requesting a lower price, but by asking, “What can I do to help you earn a higher commission?”
Examples: Perhaps one of two items that you are deciding between would result in a higher commission, even if it’s not the more expensive item… or perhaps the salesperson would earn a larger bonus if you purchased multiple items at the same time rather than spreading out purchases. Even if there isn’t anything you can do to boost the commission, asking this question casts you as the salesperson’s ally in reaching his income goals. That is likely to make the salesperson more willing to help you reach your goal — a lower purchase price or other perks. Most customers instead start negotiations by asking for a lower price, creating an adversarial relationship with the salesperson.
Helpful: If you’re not certain whether a salesperson receives commissions, it’s OK to politely ask.
Big spenders often qualify for big discounts. Even if you’re an ordinary customer, you might be able to negotiate for these volume discounts if…
You buy two big-ticket items. If most of a merchant’s customers buy just one big item at a time, buying two should entitle you to extra savings.
Example: At some appliance and electronics stores, buying just two televisions qualifies for a volume discount — but few customers know to ask. If you don’t need two, perhaps you could team up with a friend who is shopping for something similar. Ask the salesperson what he could do for you if you buy more than one pricey item. If the answer is, “I can’t give you a discount,” ask him, “Who can?” The store’s manager or owner might be more flexible.
You buy the most expensive of two or more comparable items. The expensive unit likely provides a larger profit to the merchant — and perhaps a larger commission to the salesperson — than the cheaper one. It’s in the salesperson’s financial interests for you to choose it, so you may get a much bigger discount. Explain that you’re trying to decide between the comparable items, and ask the salesperson or store manager what he can do to encourage you to buy the expensive one. Don’t do this unless there’s a valid reason to buy the pricier item, such as superior workmanship.
You belong to a local organization with many members who also could become customers with your urging. Tell the business owner or manager that you work for a big local employer… have a position of leadership in a large local association… or live in a major condo complex or retirement community. Point out that you might be able to steer other members of the group toward the business, then ask what the business can do for its most loyal customers.
The Internet often offers lower prices than area stores, but buying locally has its advantages, too. A local seller might provide better product support, and buying local might mean that there’s no wait for delivery.
You can use low online prices as negotiating tools even if you prefer to buy locally — merchants sometimes will lower their prices or throw in other perks, such as service plans, to compete with Internet sellers.
Unfortunately, customers who attempt to use Internet prices as negotiation tools generally do so by saying that they have found a low price online, then asking the local merchant to match it. This direct approach tends to remind merchants and salespeople that the Internet poses a major threat to their businesses and jobs, which often triggers feelings of fear and anger. Those feelings greatly reduce the odds of successful negotiations.
Instead, say, “I’d rather buy this from a local business such as yours than on the Internet, but the Internet price is lower. Is there anything you can do to help me buy from you?” This casts you as an ally working with the seller against the looming threat of the Internet, increasing the odds that the merchant will do what he can to help you.
