My wife and I just returned from a very nice vacation in a beautiful country
in Central America. Not only did we have a great time—we also enjoyed a few good deals.
For example, we paid around $24 for a taxi ride for which the asking price
was $30. We shelled out $40 for a two-hour boat ride that set other couples back a steep $100. We got 25% off for two nights at a splendid
beach resort although we had simply walked in rather than booking at an online discount rate.
You think it took a lot of time and effort to negotiate these deals? Not
really. All we had to do was follow a few simple rules. These rules apply to your personal affairs as much as they do in the world of business.
They also work in most countries around the world. Amazingly, I have found again and again that these rules are often overlooked:
Never Accept the First Offer
To most members of the human race, negotiating is a game. A serious one, sure,
but nonetheless one to be played and enjoyed. I'm not talking about the U.S., Canada, or much of Europe here. Most Latin Americans, Africans
and Asians, however, as well as many Southern Europeans, share this playful attitude. To them, the first offer is just the opening move in
the game. Accepting it right away means you're refusing to play.
In all of the above settings, and in many other such situations, we rejected
the first offer received, asking for a better price instead. We got one—almost every time.
Do Your Homework
Without knowing how much something should cost, you are all but guaranteed to
end up overpaying. Do your homework and find out upfront. Sure, there's a limit to how much time you'll want to spend on this, but the
return on the time invested often makes it more than worth your while.
In case of the taxi ride, for instance, our 'homework' consisted of asking at
our hotel how much the ride normally cost. That took but a minute and saved $6. Before the two-hour boat ride, we talked to two other vendors
offering such rides in the area to find out about their pricing. Five minutes spent, $60 saved.
Leverage Your BATNA
You probably heard of the 'BATNA', the 'Best Alternative to the Negotiated
Agreement.' Those corporate types might dish up the term trying to impress you with their negotiation savvy, but let's be honest here: all
it really means is "What's your next best option?"
In case of the two-hour boat ride, once we had done our homework and identified
our BATNA, we stumbled across our most attractive option: a nicer-looking tour, albeit at a much steeper asking price. We refused and pointed
to the pricing we'd get elsewhere. Since the company already had others signed up for the tour, meaning we offered incremental revenues at
no incremental cost, they accepted our counteroffer.
At the beach resort, we knew we had other options in the vicinity. Although
it was already late in the day, leveraging this knowledge was all it took to get the receptionist to offer a significant discount. This again
took only a few extra minutes, for savings of well over a hundred dollars!
Following these essential negotiation rules doesn't take much. All you've got
to do is remember them and spend a little time in order to prepare accordingly. Time worth spending? I think so.