Overused Negotiation Strategies are akin to pseudoscience: some people believe whole-heartedly in them despite the lack of clear results. Despite their common acceptance and use, more often than not they will be counterproductive for negotiating a good deal.
Sure, some of these strategies may fool an inexperienced opponent, but even the average college kid working at a big ticket electronics store will be able to call your bluff when you threaten to “leave the store and go to a competitor.” As with anything, there are exceptions to every rule. I also believe that at one point in time many of the negotiation strategies below were actually effective. That time has passed. At this point most of these overused negotiation strategies merely exist as negotiation clichés.
For each overused negotiation strategy below I will offer up an alternative that might provide a fresher approach to saving you money on that next big-ticket purchase. Here is my list of the top 5 overused buyer negotiation strategies.
1- Bluffing About Competitors's Prices
Here is what the seller is thinking when you say you've found better prices at a competitor's store: “That doesn't sound right, but hey, if you can get that ridiculously low price elsewhere then perhaps you should go take advantage of it.”
The seller might simply call the bluff and say they know their price is the best in town and can't be beat, or that the price you are stating doesn't sound accurate. The seller might also begin to use your bluff as a starting point to begin talking about how their company is different, such as a “killer warranty” or maintenance program that the competitors don't offer. Finally, the seller might simply respond: “If you provide documentation competitor X is offering this item at Y price, then we will match it.” This of course would be great if you weren't bluffing about the competitor's price being lower.
Try this instead: Do your research and actually find the best prices. If you are going to a store that you prefer to purchase from but hasn't advertised the lowest price, then be ready with documentation of more competitive pricing.
2- Threatening to Leave the Store and Go to a Competitor
These days you often end up dealing with a non-commission employee working at a big-box type major chain store. They are making close to minimum wage and will continue to do so whether you buy that flat screen television from them or not. Do you think they really care if you leave the store and go to a competitor? That sounds like more of a hassle for you than for them. A threat only works if the threat puts the other person at risk of losing something.
In many situations a threat to leave a store does not risk the employee losing anything whatsoever. In fact, if you carry through on the threat they may consider it a win. After all, their job status will remain the same with the exception that they won't have to deal anymore with you, the difficult customer. Please note that this negotiation strategy may work better for commission based sales (i.e., a car salesperson might be more inclined to put up with it then a non-comission based customer service representative).
I believe the best negotiation strategies involve rapport building and making the other party want to give you the best price because they like you or have compassion for your situation, not because you are making idle threats against them. If you were a seller wouldn't you be sick of buyers always threatening to leave?
What to do Instead: Everyone threatens to leave and go to a competitor, so instead make it more personal. Be honest, try to gain empathy, and leave the competitor out of it. Here is some suggested dialogue for a better approach: “I really appreciate you working with me on this potential sale. I love this store and if I was going to buy item X from anywhere, it would be here. The thing is, this item is just a little out of my price range. I know that's not your problem but it's why I don't think I can make a purchase today. Is there anyway you could work with me to take a little off the price?”
This approach is more honest and will likely be met with a positive reaction from the seller.
3- May I Speak to the Manager?
I actually generally like this approach. That said, I still feel it is overused. Asking for a manager is not the only negotiation technique in the book and it certainly shouldn't be used in every situation.
Try this instead: Everyone asks to speak to the manager. This often subtly offends the person you are dealing with. Remember, that person is likely reminded all day long that they are lower on the totem pole than their manager. Of course, you are faced with the reality that managers often have the ability to give better deals than salespeople.
What I do in these situations is go head on into the negotiation and try to hold out as long as possible from going over the salesperson's head. At a certain point, if I recognize that the seller cannot budge any further or if they lack the authority to make a better deal, I will then ask if the seller will speak with their manager on my behalf. This can be less offensive to the seller, as you maintain their status as the point person in the deal. Plus, who do you think is more persuasive to the owner/manager: you or the person who works with them on a daily basis?
Patience is a true virtue in an effective negotiation. The longer you keep the other party involved the more invested they become in finalizing a deal.
4- Good Cop/Bad Cop
You may think that your “divided” front will be magic for lowering prices. However, often times the opposite is true. Too many people attempt this approach. Additionally, you're likely not the great actors you think you are. Most sellers will admit that the good cop/bad cop routine often leads to a buyer paying more money.
Try this instead: Go into the negotiation with a strong united front. Better yet, only let the best negotiator go in for the deal in the first place. A lot of people are not comfortable with negotiation. If your spouse/partner is the better negotiator then your attendance may only lead to problems. Moreover, experienced salespeople will often try and use spouse/partner guilt to finalize a deal. They almost instinctively recognize the weaker negotiator and go after them.
If both of you have fairly equal negotiating skills then perhaps the best play is to send in the partner/spouse who likes the item the least. Falling in love with a possession often comes across to a salesperson, and it will be used against you during a negotiation. The bottom line: fly solo and you will likely leave with a heavier wallet.
5- Low-Ball Offers
Imagine that you wish to sell your 2007 Chevy Cobalt. You know it is a decent car and in goodcondition. You do your research and learn than an acceptable price range for your car is $8,000 to $12,000. A potential buyer contacts you and makes a low-ball offer of $4,000. How do you feel? Probably a little irritated and insulted. People want to give a good deal to people they like. The low-ball offer might just be the most harmful cliche' in the book. It instantly makes you seem difficult to deal with.
Unless you are negotiating from a point of extreme power, it may be best to stay away from making any low-ball offers whatsoever. Most people prefer to negotiate with somebody who appears reasonable. A low-ball offer is by its very nature, unreasonable. Try your best to avoid being mean to the seller. Your bad attitude will only hurt your chances at receiving a good bargain.
Try this instead: Research your item and come up with a legitimate price range. In our Chevy Cobalt example, the buyer should do their research to find that an acceptable range for that car is $8,000 to $12,000. If he were to offer a price such as $7,000 or even $8,000, he will have much better luck getting the price into the lower end of that range.
The overused buyer negotiation strategies above are mostly ineffective and obvious. These tactics might have worked trading baseball cards back in first grade, but not as adults. If you insult a seller's intelligence by attempting an overused negotiation technique in the wrong set of circumstances, then you might find finalizing a good deal is much harder than it needs to be. Treating the seller with respect and working towards an amicable result is a better negotiation process. For a better approach to negotiation, check out these 5 UNDERused negotiation strategies.
What other overused negotiation strategies can you think of? Do you disagree and believe that any of the above strategies remain very effective?