Career Life Money

Tips on Negotiation

When I went to business school a few years ago, one of the few skills I knew I wanted to work on was that of negotiations. I am one of those annoying people who say things like, “life is a negotiation” but I believe it wholeheartedly. So much of life and whether or not you are happy or unhappy centers around the terms you’re been able to grasp for yourself.

That being said – I have struggled with negotiating my entire life. The process used to make me incredibly uncomfortable and  even though I had two years of training and now negotiate often as part of my job, I don’t think I will ever be an expert. There’s a few key lessons I always try and keep in mind that I’ve learned along the way though, and I wanted to share some today. Oh and I disliked all the stock “negotiations” pictures I found on the web – so I included some of my favorite comics instead!

via The New Yorker

Know what your goal is.

It shocks me how much I find myself negotiating with somebody who doesn’t even have a clear idea of what exactly they want. I’ll ask something like, “Well…what about, dollar amount $X? Would that work?” And the person will hem and haw forever because they really don’t even have an idea of what they are seeking, or what would be an acceptable conclusion. When you don’t have a goal, you don’t know how far from it you are when you are negotiating. So always have a goal in mind, and the very minimum that you’d take before walking away.

Be fair, it’s a relationship.

I’ll be the first to admit that there’s a certain satisfaction in wringing out every last bit from the other party – it’s like getting a great pair of shoes for 90% off retail. But that’s not how you should approach a negotiation with another real life party. There are very few negotiations that are strict one off occurences – 99% of the time, there’s a relationship based aspect to it, whether it be you interacting with that party directly again, or them having an impact on your  greater reputation. The world can be way smaller than you think, and unhappy people who’ve gotten a raw tend to pass along their negative experiences to anyone and everyone.

via Dilbert

Find other terms and levers.

Usually negotiations involve money – but they are can also be about other things, like time or participation levels and other extras. For example – sometimes when we travel I try and negotiate with hotels on the price, especially if we’re staying a long time. I’ve been able to get the price lowered occasionally, but at times when the hotel was sticking on price, they’d often throw in extras like massages, etc.

Make the first suggestion.

This rule applies 95% of the time, and I think is one of the most important ones. I always try to make the first suggestion, in order to “anchor” the negotiation around a certain number. Let’s say I want a handbag (yes all of my business analogies are like Cher Horiwitz’s). If I come out with suggesting $500, the other party will likely use that as a base and then maybe try to get $550 or $600 (10-20% higher). But if the other party suggests first asks for $1000 for the bag, then it becomes more unreasonable for me to come out and suggest $500, which is half off. The entire negotiation becomes anchored around $1000, vs. $500.

via Dilbert

And finally…as I was talking to a friend last night and mentioned negotiations to him – he threw his philosophy out which I’ll leave you all with:

“Tell them what you want. You’ll never get what you don’t ask for.” 

What are some of your do’s and don’ts for negotiations? Do you struggle like me or are you a negotiations ninja?

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  • Atiqa
    July 13, 2012 at 7:33 am

    I agree. I also took a negotiation class at b-school, and I cannot believe the number of people that are representing their companies, that don’t even fully comprehend what they want or what is in the best interest of their company. I also typically make the first suggestion as well, makes me feel a bit more in control.

    great tips! Have a good weekend.

  • Alice
    July 13, 2012 at 8:41 am

    I absolutely love educational posts like this! Thank you for sharing your business school tips!
    Btw, my best negotiating experience was getting a scholarship for law school 🙂

    • Katherine
      July 13, 2012 at 8:49 am

      Wow, that negotiation was totally worth it! Well done!

  • adele
    July 13, 2012 at 8:50 am

    These are great tips Katherine! I would also say confidence in negotiating is key to success.
    Would love you to check out my latest outfit post 🙂
    Have a fab weekend Hun xoxo
    http://www.intotheblonde.com/

  • Jillian
    July 13, 2012 at 9:25 am

    These tips are GREAT! I just favorited this post!

  • Audrinajulia
    July 13, 2012 at 9:45 am

    Thanks for sharing your tips. I’m not that good in negotiations so most of the time I already tell what I want and what i need. Probably I ‘m more likely to agree with your friend.I’m not good on bargaining either so mostly in that case husband do the talking.

  • chocolatecookiesandcandies
    July 13, 2012 at 10:56 am

    Love this kind of posts, Katherine! I’ve learned so much here. My father often tells me that when negotiating, always be fair and leave something for the other party as they need to “eat” too. It’s so true about the world being small. If you negotiate down to the bones, the other person will feel bitter and will tell anyone and everyone they meet. I get pretty crazy “offers” via eBay where the person will keep bargaining as if they’re in a fish market. The more adamant, demanding and unreasonable they are, the more obstinate I become about sticking to my price.

  • DSK Steph
    July 13, 2012 at 11:36 am

    Your post reminds me of a book called “Getting to Yes,” my bf told me to read a few years back.

    I’m not naturally born a negotiator, so I really value as much info I can get on the topic!

    I love practicing my stills at garage sales. lol

  • chanello
    July 13, 2012 at 12:49 pm

    I’ve learned that negotiations are all determined by the power scheme of the situation. The appearance of who needs the other more. If I’ve got the upper hand, I don’t negotiate. In fact, I’m a dick. (surprise surprise). The key is making the other party believe you have the the stack against them.

    Example:
    Condo is WAY overpriced market PSF. Buyer wants to live in that apt’s building because the company bus stops right in front of building and buyer is disabled. There are not many units available in building and none are of the seller’s size. Seller knows this and has no financial need to sell apt. Buyer makes offer at 20% off listed price (which was already generous since original price was inflated). Buyer counteroffers with SAME ORIGINAL PRICE.

    A week later, buyer concedes and buys at full price.

    Why do you think Hermes/Ferrari doesn’t negotiate!? Because they always have the upper hand – or so they’ve made us all believe. 😉

    • Katherine
      July 13, 2012 at 2:33 pm

      LOL – is this a personal real estate story example? 🙂

      • chanello
        July 16, 2012 at 12:10 pm

        SOrry typo in above -“Seller counteroffers with same original price” OY I’m overworked/tired. and it may or may not be…
        😉 But I certainly know alot of the intimate details.

  • hera
    July 13, 2012 at 12:53 pm

    Thanks for putting this together. I think knowing what we want, and also understanding it is a respectful relationship process is really important. I negotiate for my entire life and still, it is a life long thing to learn dealing with different people, culture, and the subjects in question.

  • E
    July 13, 2012 at 1:34 pm

    Another great post!!! I loved it.

    I do agree with always ask what you want. It does make me a bit uncomfortable to negotiate but I have gotten deals on things that some people would never ask. Recently I got my hotel resort fees waived.

    • Katherine
      July 13, 2012 at 2:34 pm

      Awesome! Yes I dislike those resort fees (although it takes away the annoyance at a lot of places of always having to tip everybody, having cash ready, etc)

  • Andrea
    July 13, 2012 at 7:02 pm

    So entertaining. THX

    ~Art a la Rue
    Enter my awesome giveaway…

  • Tangled In Texas
    July 13, 2012 at 7:46 pm

    This was awesome Kat! Two of my favorite things are fashion and finance. 😉

    I think that we’re so used to paying “sticker price” or giving what is asked of us that the art of negotiation is lost sometimes. For instance, the other day was the first time I price matched at Walmart to Aldi’s prices and got a bunch of fruit for a steal!

  • Anonymous
    July 13, 2012 at 8:58 pm

    Jeez woman… This is supposed to be a fashion blog ( or I thought, at least). Why not just stick to what your comparative advantage and leave the other stuff to the pros

    • Katherine
      July 14, 2012 at 10:14 am

      Thanks for the feedback – sorry that you found this unhelpful! If you have any better negotiations tips please share.

      • chanello
        July 16, 2012 at 12:15 pm

        Yes K:
        Please keep yourself as 2 dimensional as possible. God forbid you have ANY other interests or thoughts other than what goes on your body because then this blog would become humanized with personality and opinion, thereby making it harder to flame you.

        We wouldn’t want to take away the ability of the anon to flame now would we?

        😉 WOW what a run-on-sentence!

        • Katherine
          July 16, 2012 at 1:08 pm

          Aww thanks for the support! 🙂 And for your negotiations advice and contributions!

  • SS
    July 14, 2012 at 5:53 am

    It is really useful post! I’m really bad at negotiating… next time, I keep this post in mind and prepare well.

  • Latkesanddimsum
    July 14, 2012 at 8:01 am

    Kat, loved the post. It was very useful!

    For negotiating, Getting More by Stuart Diamond is another great read. 🙂

  • Mrs C
    July 14, 2012 at 2:43 pm

    I CAN SURELY USE THIS TIPS WITH MY HUSBAND AND MAKE HIM AN OFFER HE CANNOT REFUSE HEHEHE! THANKS KAT FOR SHARING THESE TIPS 🙂

    MRS JACK OF ALL TRADES DAILY where Fashion and Food collide!
    FOODIE WEEKEND : Red Velvet Cupcakes
    http://mrsjackofalltradesdaily.blogspot.com/2012/07/foodie-weekend-red-velvet-cupcakes.html

  • elle
    July 15, 2012 at 8:15 am

    I loved reading this post – great tips! I really hate negotiating but know its absolutely necessary sometimes. For someone who’s generally anti-confrontational its hard for me, but its satisfying knowing you are getting a better deal sometimes.

  • Jen
    July 15, 2012 at 10:30 am

    Kat – I think this is a great post, educating women on negotiating is wonderful. I think women need to speak up more often and push for themselves – like you said take the risk or you never know.

    But to take that risk make sure you have some results to back up why you want a raise or something like that.

    Red Soles and Red Wine

  • Annabelle
    July 15, 2012 at 11:49 am

    Nice post. Negotiating doesn’t come naturally to me either but I totally agree, it’s an important skill.

  • yesenia
    July 15, 2012 at 1:36 pm

    I like to negotiate to get a good deal. I also loved that last quote!

  • Chic 'n Cheap Living
    July 16, 2012 at 4:52 pm

    Oh love this Katherine! I am all about BATNA and anchoring. Anchoring is huge because it is hard to get away from that number. I have also tried to loop in a secondary item in conjunction with the first item too so the focus may be on a package than a single item.

    xoxo,
    Chic ‘n Cheap Living

    • Katherine
      July 16, 2012 at 4:56 pm

      BATNA! Yes! Did you ever read Getting to Yes?

  • Small Savings – Part Two » Feather Factor | Feather Factor
    July 23, 2012 at 6:38 am

    […] usually for a year. This is a very low pain negotiation (for those who mentioned being nervous in this post to negotiate) and a great way to practice! If you have questions on this, feel free to leave them […]

  • Aki!
    July 28, 2012 at 10:47 am

    I have to negotiate a salary soon. Any specifics on that?

    • Katherine
      July 28, 2012 at 7:45 pm

      Honestly the biggest item for me in negotiating a salary has always been being prepared with market data and what other offers/etc I have or should expect in the same field. Is it for an existing job or a new one? Good luck!