Negotiating Skills

You are probably an expert negotiator already and perhaps you don't know it.

When your car insurance renewal comes up, do you accept the first offer that is made from your agent? I suspect that you'll shop around and look for a good price and good value match for your requirements.

Where do you prefer to do your food shopping? Tesco, Sainsburies, Waitrose? Again, you are exercising a choice based on your budget, experience and preference.

We do not always see this as negotiation, but why should we? There is no face to face haggling as such. We accept the store, their prices and that effectively is it. However, there's a lot more discerned choice here than we perceive. Also if we don't like one store or their products let us down, we can always walk down the high street to a competitor.

Negotiation by location - just walk away. Competitive prices and good customer service should keep all companies on their toes.

A lot of people from the UK do not excel at negotiations and often get burnt with bad deals.

When companies make offers saying 30% off, how can they survive? Well, they inevitably do. Sure it cuts into their profit margins, but it's sometimes better to get a small share of the market at a reduced price than no share in the market at all.

This discussion changes slightly when we're discussing products and services. Some products like fresh food have a limited shelf life and have to be shifted.

However, services can be taken or left. They have a real price from the vendor and a perceived value from the buyer. The gap between the real and the perceived is the negotiation zone.

A few years ago, I started receiving calls from the Parliamentary Year Book asking me if the College of Public Speaking would like to insert an entry. It sounded interesting. "How much?" I asked.

£2750 + VAT. I liked the idea of positioning my company at the high end of the market, but I knew I'd never get my colleagues to agree to that outlay. So, unfortunately it was a no go situation.

Every three months or so they would ring me back and ask me if I was interested. I said yes, I was interested but couldn't afford the outlay.

One day, near to their production cut off day they rang me and asked me how much I could pay. I replied about £750 + VAT. They said no. OK, I thought. Two days later, they called again and asked me if I could stretch my budget to £1000 + VAT. I called my colleagues and we made the deal. A saving of £1750 + VAT. Not a bad day's work. You need to know your bottom line and the perceived value of the service. They got a sale and we have a professionally crafted article in the PYB. Win-win!