In a study of more than 2000 participants (A salary.com survey) almost 49% of respondents mentioned that they didn’t negotiate because they lacked the skills or self confidence or found negotiating unpleasant.
We want to help change that. And more importantly, help you make it a win-win interaction
In any negotiation communication, there are two aspects. Verbal and non-verbal.
Let’s start with the verbal first:
#1 Provide an Anchor
Often times clients who seek our services are not aware of the fair prices. Then they rely on the belief – ‘The vendor wants to extract the maximum out of us. Hence the prices must be over the top’. Best solution here is to provide an anchor of what is the going rate in the market (if it’s a standard product or service) or what other clients have paid for it (if it’s a highly customised service). Try to provide references or show them actual invoices (if possible) to build their comfort. It’s easier for them to justify a price which others are comfortable paying too.
Here’s an example of providing an anchor:
#2 Give Them a Win
Everyone likes to feel like a winner. A price negotiation is more than a matter of lowest price. Everyone wants to go back feeling like a winner by extracting the maximum value in the minimum price possible.
Be ready to give them this win by keeping additional discounts and freebies that you are ready to give away after a few rounds of negotiations.
Bonus: It’s more cost effective to provide extra product/service instead of giving a price reduction. For e.g.: for a consulting project, it’s better to throw in 10% extra hours rather than a 10% reduction in hourly price.
#3 Think Long Term
Sometimes you might get a chance to get away with charging an exorbitant amount. For example, they may be unaware of the right prices, they might have an urgent requirement, or simply because they are not as strong a negotiator as you are. It’s a good idea to think long term in these situations. You may get away with that fee once but you can say goodbye to your chances of a repeat business from them. Even if your services are of a one-time nature, we live in a small world. Word gets around fast and your reputation of a fair vendor will take you a long way.
Bonus: If you have an opportunity to overcharge but you didn’t, make sure the client knows about it. Else, although it may make you feel self righteous, it will do nothing to help your business.
Let’s move on to the nonverbal aspects
#4 Avoid Questioning Your Own Price
Try saying these two sentences aloud:
The price of this product is 10,000 rupees?
The price of this product is 10,000 rupees.
Commonly known as “uptalk” it is the habit of making statements sound like questions.
But when you question your own price, it’s an invitation to the other side to negotiate with you.
If you find yourself “uptalking” often, the best solution is to do a bit of practice. Record your answer and play it back so that you can self-correct.
Watch this video for more:
#5 Avoid Self-Calming Gestures
Talking about price can often make us nervous or unsure. Your body reveals these nerves by using self-calming gestures. Self-calming gestures serve to calm us down after our brain experiences something uncomfortable. So if you’re not prepared when talking about price your brain feels uncomfortable and sends a message to your body to calm it down. Your hands respond immediately by self-soothing which stimulates nerve endings, releasing the calming hormone endorphins. Infants and young children display these behaviors when they suck their thumbs.
As we grow older we adopt more discreet and socially acceptable ways to satisfy the need to calm ourselves. This could be stroking your hair, pulling at your collar, rubbing your arms, touching your face, tapping your foot, playing with an object, touching the back of your neck or holding your upper arm in a self-hug.
When you’re out of sorts, you have every right to comfort yourself. But to the other person’s brain, these gestures make you come across as tentative, unprepared, insecure or low on confidence.
In general, a good practice is to become aware of your self-soothing behavior and avoid it during price negotiations.
This video will help you with an exercise
#6 Use the Steeple
When people are very certain about the point they’re making their hands often steeple.
Steeple is a powerful gesture to bring gravitas, show composure, project conviction and sincerity when talking about your price.
Steepling is when your fingertips touch but your palms are separated.
If you’ve ever wondered how to deploy your hands during negotiation, try the steeple.