Using the Power of Negotiation

Let us never negotiate out of fear but let us never fear to negotiate.  ~John F. Kennedy

One lesson I have learned during this recession is that prices that are advertised are not set in stone.  Everything from major appliances to contractor work is willing to take a reduced price in order to get the business.  It seems like the price that we are given at a store is merely a "suggested" price, but not necessarily the price that you have to pay.  This leads to the use of one of the most powerful tools that we have as a consumer.  The power of Negotiation.

By definition, Negotiation is the following:

A dialogue intended to resolve disputes, to produce an agreement upon courses of action, to bargain for individual or collective advantage, or to craft outcomes to satisfy various interests.  (Citation)

Although negotiating may seem like a very trivial task to some, it proves to be very complex to most.  According to wikipedia there are six different negotiation styles.  Personally, I probably fall into the category of "accommodating" as I typically like to avoid conflict and will sacrifice of myself in order to get past the issue (or just the uneasy feeling of tension).  This has not always proved to be beneficial for my best interest as I have found myself paying more for items that I have regret at a later date.

I rarely had confidence in my negotiation ability due to the fact that I did not know what I was doing.  However, recently I made a decision to begin reducing my bills further by cutting back on the money I spent for luxuries such as cable and Internet access.  Since my satellite company just increased the amount that they were charging me, I naturally started with them first.  

I made a call to my satellite provider and called to see if they could do anything to reduce the amount that I was paying for my current channel listings.  Unfortunately, when I called, I did not have a good reason as to why I was requesting this reduction in price except for the fact that "money was tight and I was not sure if I was going to be able to afford the service".

The customer service representative offered the options of a $5/month reduction for six months or changing to a cheaper package that did not contain all the channels I wanted to see.  At the end of the phone call, I politely told the customer service representative that I was going to research my options and probably cancel the service.  It is my thought that he probably thought that was an empty threat due to the fact that he allowed me to get off the phone.

At this point, I began what I believe to be the successful negotiation procedure listed below:

1. Research your options
   
• Immediately once I got off the phone with the satellite provider, I began my process to research with my other options.  Fortunately I found a very comparable option with another provider that was $10/month cheaper (even after the promotional period was up).  
  
2. Have good reasoning to support your argument
   
• In addition to the new option being cheaper, I also had more channels as well as free HD options that were not provided by my satellite provider.
• The speed of my Internet access was greatly increased.
3. Look to see how both parties can benefit from the negotiation
   
• During the initial phone conversation with the satellite provider there was not really an effort from the customer service representative to see a real benefit for both parties.  In my opinion, he seemed fine with me discontinuing my service with their company as well as them losing the revenue.
4. Stick to your guns
   
• During the initial phone conversation, I laid out the terms that I felt were reasonable to have fulfilled in order to continue service with the satellite provider.  There were multiple times when the customer service representative wanted me to downgrade the channel listing (giving up TNT and TBS) which was unacceptable to me.  I never conceded on reducing my channel listing.
5. Do not be afraid to walk away
   
• Ultimately, as a consumer, the most powerful weapon in negotiation that you have is the ability to walk away.  The most important thing that I have learned during this process is that no matter how bad we want something, it will not be the end of the world if we do not get it at that particular time.

So on the day that I called DirecTV to cancel my service, I got a different customer service representative who wanted to know why I was canceling my service.  In addition to the same reasoning I explained to the previous CSR, I provided her the information on their competition and the deal they were providing (without any loss of channels and features).  

Immediately she began to bring out her arsenal of discounts and added channels to try to keep my service.  I kindly explained to her that the opportunity had passed and that I was still switching to the other provider.  At this point I realized that I had an "upper hand" in the negotiation process due to the fact that the satellite provider did not want to lose one of their customers with perfect payment history.

Although I did switch from my previous provider, I learned some very valuable lessons during the negotiation process as noted above.  I really recommend stepping out of your comfort zone and trying to use the negotiation procedure when making your next purchase where prices are not set in stone.

Where are some of the other places you have received success in negotiating?  What are some of the techniques that you have used to successfully negotiate in your favor?  Leave your comments below.

Stay Disciplined!