How to negotiate to earn more


We all negotiate because we have to. There is no way out. Negotiation situations are wrapped in our daily mundane transactions and we might not be even aware of them like you asking for an extra discount on the clothes you are planning to buy or deciding on the color of the car with your wife. At the workplace, it could be asking for a few extra credit days or requesting the extension of a deadline. Whatever might be the situation, when we dig deep we find that there are plenty of such situations and that it might be a good idea to improve our negotiation skills.

The word negotiation rouses feelings of competition and threat. Our response is usually of fight or flight. It is said that you can never make money faster than negotiating. If that is true and if you are not doing it right it also means you are losing out on the money you could have saved or earned with good negotiation skills. So let us understand what the basics of this Art of Negotiations are.

What to expect in a negotiation?

1. Expect the unexpected. Every negotiation will be different. Be flexible.

2. Be kind to the people but be tough on the cause.

3. Always act and never react. Know your buttons so that they cannot be pushed.

Types of Negotiation

Collaborative: People with whom you will have multiple transactions in the future. For example your employer. You don’t want to burn bridges in your first review where you are seeking a promotion.

Confrontational: One-time transaction. For example with a property dealer for renting or buying your house. It is very unlikely that you will deal again with him but that is no reason to be rude or unfair with him.

Stage 1: Test Waters

Don’t Negotiate: Identify value proposition and share it. Leave it for the other party to decide.

Never argue early in the negotiation: It will make the other person defensive. Instead, agree with the other person. Use the feel, felt, and found formula. You tell them how you understand how they feel about the offer and that many have felt the same way. You also tell them that when you sit and discuss it with the other party, they have always found that you give the best value in the marketplace.

Never accept the first offer: Most likely the other person is holding back something more for later and you could miss that. This need not necessarily be in terms of money only. Always go through the process of negotiating as it makes the other party feel they have won something in the process. If the first offer was better than expected then you should always take the excuse of checking with the higher authority before accepting.

Be a reluctant buyer or a seller: Give the seller all the time to explain the offer before it is initially rejected and then say “you have already put in a lot of effort so what is the last price you are ready to give ?” The seller will normally surrender half their negotiating range. If you are a seller understand their need and pain areas. Show them value. Quote only when the buyer asks for it.

Never make the first offer. If you can, avoid it at all costs.

No free gifts: Make them pay in equal measure or earn it. Don’t even give free information or even co-operation. Today’s free gift is tomorrow’s starting point. Secondly, they will ask for an additional free gift in the next transaction.

Stage 2: Being in the thick of things

Watch the ‘Salami’ effect: Let us say you are selling a drawing for Rs 100. You tell the customer Rs 100 for the drawing another Rs 20 for the coloring and another Rs 5 for the delivery. When you give the breakup the customer might say leave the coloring and delivery as he will manage and will then start negotiating. The whole deal went down from Rs 125 to less than Rs 100. Quote Rs 125 and don’t negotiate and keep shut.

Never Make a Quick a deal: Every deal has a timescale and a tempo of its own. If the tempo has increased it could mean they have identified a mistake on your part or have identified an advantage which you might not be aware of and in both cases, they want to close the deal. You should then slow down the tempo and revisit the 3 TQs.

Never disclose the bottom line was: Bottom line is how far you could have got pushed in terms of price, credit period or services, etc. Never disclose this even if the other party is your best friend. If they find out then it would become win-lose for them.

Stage 3: The end game

Flinch to visually convey shock and surprise when the other party asks for a concession or a discount. Always react with shock and surprise that they would have the nerve to ask you for a concession.

Danger Point: The other side often makes a proposal to you that they really don’t expect you to agree to. When you don’t flinch, they start believing that they could get it from you. It makes them tougher negotiators.

Solution: Practice your flinches before you go into a negotiation. A concession often follows a flinch.

The Vise Technique: Upon careful consideration of the other party’s proposal, respond ” You’ll have to better than this ” and patiently remain silent and wait for the response and concession. The next person to talk loses. The next person to open his or her mouth will make a concession. The solution is to reply with the counter-tactics “Exactly how much better than that do I have to do?” Pin them down to a specific.

Never Offer to split the difference Instead, try to get the other side to offer to split the difference. “How far apart on this are we? We’re not that far apart. There must be some middle ground on which we can both agree.” When the other side offers to split the difference, you can reluctantly agree to their proposal, which services their perception that they won.

Danger Point: If you offer to split the difference, they could get you to split the difference again.

Solution: Get the other side to offer to split the difference. You may then be able to get them to split the difference again. Even if you don’t, you still make them feel that they won.

Avoid the Rookies regret: Could you have done better? Answer the 3 trailing questions TQs.

1. If I am going to give him a concession what is it gonna cost me?

2. What is it worth to the other guy?

3. What do I want from them of equal value?

Tips and Tricks

  1. Listen more and talk less: Use the 80:20 rule. Listen more and talk less and don’t break any rules.
  2. Specific Numbers have more credibility than round numbers.


People buy on emotions and justify with reasons. People make decisions on not what they think but on how they feel. People will forget what you said to them, people will forget what you did to them, but they will never forget how you made them feel. It is very important that you aim at a win-win situation at the end of the negotiation process. In the end, both parties involved should have satisfied their needs identified before going into the process.

Deals are never decided on price directly. Understanding your needs and the needs of the other party is the most important rule of negotiation. If you can fulfill the need of the other party you have got the deal and most likely a good one.

Please comment below what are the other tricks you use in your negotiations and how well they have served.

Please follow and like us:
Pin Share

What do you think?

Your email address will not be published. Required fields are marked *

No Comments Yet.