WINSTON FLETCHER - ON THE WAY UP - LAUGH YOUR WAY TO THE BEST PRICE/Many of us are uncomfortable when it comes to negotiating over money but when the time comes to haggle, and it will, a good game plan is essential.
Few managers relish haggling about money. They fear they are not very good at it and are scared of coming off worst. That's why large organisations have purchasing departments, which fight about prices even after they have been accepted 'in principle' by line managers. The purchasing departments are, or should be, staffed with people who have no particular commitment to the project, and who love to haggle.
With or without a purchasing department, however, all managers sometimes have to fight about money. And because they don't like doing it they tend to procrastinate which almost always makes things worse. There are certain occasions, which we'll come to, when it is wise to delay - deliberately - but it is never clever to let jobs slide down your work list simply because you can't bring yourself to deal with them.
As with other unappealing tasks, bargaining will be less painful if you adhere to some simple disciplines and, as is the case with other unappealing tasks, it is essential to brief yourself extensively beforehand. Start any negotiation without being in full possession of all the facts and you can bet your profit margin to their percentage discount that you'll lose. You'll be most likely to win if you treat the negotiation like a game of chess - whether you play or not.
Find out all you can about the guy or guys on the other side of the table and work out how they may respond to your moves. Once you are ready to start, employ the following basic game-plan tactics which should ensure the encounter ends in victory:
Move first. If you name a price or a discount, the argument will then be continued on your terms. Never be shy about opening the bidding.
Take time out. Once you've got the process moving, let the other side stew for a bit if possible, to emphasise your lack of concern. This is the only type of delay that's acceptable.
Pick a nit. Even the tiniest nit can, like a hole in a dyke, provide a worthwhile breach in your opponent's case. Keep watching for any pimple that can be inflamed with a deft scratch.
Hang on in there because the other person will usually feel as insecure about haggling as you do, and pig-headed perseverance will generally prevail.
Give a little, take a lot. Giving away a trinket to show you are being reasonable can help you win the jewel in the crown.
Laugh. American second-hand car dealers are trained to burst out laughing as soon as a car is presented to them. Such belittling chortling can immediately unsettle even the most confident adversary.
Make them laugh. Psychological researchers have shown that in financial negotiations you will get a better price if you break down your opponent's defences by making them laugh. Think about it: it is hard to be hard when you're giggling.
Make them compete - remind your opponent that there are other fish in the sea, other pebbles on the beach. A well-timed wink from the green-eyed monster generally works a treat.
Invade their territory. Contrary to conventional wisdom, it is generally advantageous to meet on the other side's turf, as they will feel more at ease and thus be more susceptible to your wiles. And if they prove recalcitrant, it will be easier for you to stomp out.
Having planned your tactics, you must consider your style. Is it better to be conciliatory or aggressive; to keep calm or to raise your voice?
It would be pleasant, but unfortunately untrue, to say that displays of anger never pay off. They do. And if you are one of those rare people who can switch your temper on and off like a light, you will have a huge advantage in negotiations. It's not a skill given to most of us but even the best-tempered managers must learn to raise their voices when they have to, and to sound furious when they must. Nice guys do not always finish last, but in negotiations, the occasional blast of anger will usually work wonders.
Despite employing these tricks of the trade, not even the toughest of negotiators will always come through to win. So, in any important negotiation, you must always have prepared your BATNA - Best Alternative To a Negotiated Agreement. (The term was invented by Harvard Professor Roger Fisher and William Ury, two of the most experienced negotiation experts in the world.)
Basically, your BATNA is your fall-back position, and it must be developed before negotiations begin. To start thinking about a fall-back before negotiations have started may sound unduly pessimistic and naive enthusiasts will claim that if you get stuck in and are confident, you'll ride roughshod over the other side and win. Codswallop.
If you are over confident you'll be taken to the cleaners. But if you know you've got a good fall-back position then you can negotiate with strength from the start. 'The better your BATNA the greater your power,' say Fisher and Ury. And having developed BATNAs ever since I first heard of the system, I'll drink to that - a glass or two I managed to get at a brutally negotiated discount.