Today’s tip on negotiating is one we all learned at a very young age. Only negotiate with someone who has the authority to give you what you want. We learned this when we were children asking our parents for something.
In the real world this negotiating technique shows up in a slightly different manner. You are sitting at the car dealership with the car salesman and you are going back and forth about which options are in or out and what the final price will be and how much you will get for your trade in. You finally come to an agreement and the salesman says “Great! Let me just run this by my boss real quick and we’ll get you out the door”. He comes back a good time later with a glum look on his face and breaks the news to you that the price he gave you was too good and his boss won’t allow it. Then the salesman will say something like this “but if you can just raise your offer a little bit I’m sure I can talk the boss into this deal.”
This is where if you don’t remain alert you are going to get burned. This dealership is trying to manipulate you.
You aren’t negotiating with the person who can give you what you want.
How to deal with this problem
Before you start any negotiation always learn about the other party. This goes back to being a good communicator. A basic question you should always ask is, “do you have the authority to make an agreement with me or do you need further approval.” You probably don’t want to negotiate with someone who can’t make an agreement. Try to deal directly with the person who can make the deal happen.
Fight Fire with Fire
Try using the “I need to ask my boss or the one with authority” in reverse sometime, it is rather funny to see. Negotiate your heart out on the car of your dreams and when the salesman asks you to sign on the dotted line tell him you first have to run it by your significant other, who isn’t there at the moment. Later that month you can call the salesman back and say your significant other was not happy with the price and won’t be letting you get the car at that price, but if you could just drop it down a few hundred dollars you think you could talk them into it.
In my professional career when negotiating with contractors for the mine it is standard practice to validate that the other party has the authority to make a final decision. I wanted to share with you the best response I have heard to the validate question, which I have brazenly taken as my own standard response. When asked if you are able to authorize an agreement always say that you are authorized up to a certain amount. This incentivizes the other party to give concessions in hopes of having you not escalate the issue and also gives you the option to escalate if needed. The next contractor I hear use this exact line I’m going to buy a box of doughnuts for because I figure hey if I can’t win the negotiation I might as well try to bribe them.
Do you have an experience negotiating with someone who wasn’t able to negotiation? How did you feel?
I wanted to end with a quick reminder that negotiating should focus on creating a win for everyone. Work to make the pie bigger for everyone. You will always make more money making a bigger pie than you will by getting a bigger piece of the small pie. With that said I still find it helpful to have the tools necessary to acquire a bigger piece of the pie even when the pie isn’t going to get any bigger.