When it comes to negotiations, how do we know whom to trust? How can we tell when someone is lying to us? Have we gotten the best deal? These are questions many of us have faced when dealing with negotiations, and sometimes the answers favor us and sometimes they don’t. While we cannot control others actions or personalities in negotiations, we can protect our own. Our reputations and our predilection for lying are both tools we use to negotiate deals everyday.
My first step in negotiations is to do my research and prepare my questions. As Hoch, Kunreuther, and Gunther (2001) stated, negotiators should identify missing information and prepare to ask questions multiple times. Today’s world of Internet makes it even easier to shop around to just about any item one would want. I like cars and I like to trade and buy cars often, this has made me a pretty good negotiator with dealerships. I will spend weeks looking at different dealerships for the car I want and then use the information I have to work against them. I start as far away from my home as possible (within driving distance) and then work my way back. This gives me the opportunity to work the dealerships that are far away to give me the best deal to make it worth my drive to them. I then ask questions of my local dealerships to see where they stand in price and availability.
By asking the dealerships direct and specific questions, I can assure I am making similar comparisons. According to Hoch et al (2001), direct questions are more difficult to answer with a lie. Vague questions give the responder the opportunity to think up an indirect way of answering. I want to know exactly what is included in the deal, what they are going to do for me, and why I should buy from them. These questions are not always easy for dealerships to respond to. I have found that the quicker the response a person gives the more honest it is, they don’t have time to create a lie. I also find that the slower a person talks the more apt they are to be telling the truth. When people talk fast I fell like they are trying to gloss over something.
Another important part of negotiations is to get everything in writing, that way there is no question about what the deal entails. Hoch et al (2001) stated that it is important to put things in writing, inspect records and insist on guarantees. When details are made and agreed upon a written record should be created, and both parties should have access to it before ending negotiations. Verbal agreements can be easily changed or reworded which may change the outcome, even a simple email can be sufficient proof.
Managing one’s reputation is just as important after the sale. By taking a step back and reflecting on the negotiation can give good insight as to what went well and what could have gone better. I also like to follow up with the other party a few days after the deal is closed to thank them. Hoch et al (2001) advised to never reveal additional confidential information, such as what you would have been willing to pay, this can harm future relationships.
My best negotiation was with buying a new van. I had bought a van but did not like it, in fact, I hated it and within a year, I wanted a new one. I did my research and chose the make and model I wanted. I then went online to find all the dealers that had that model in stock and narrowed my choices down from there. It was down to two dealerships, one not far from my house and the other that was over two hours away. The dealer that was further away gave me a better price but it wasn’t a color I liked, so I took their price to the closer dealership, who had acquired the color I wanted from another dealership. When I arrived at the dealership, on a Saturday, I presented the cheaper price to them and they refused to match it. My husband and I went to lunch to discuss the deal and decided that if they would not match the price we would go to the other dealership or not purchase the van at this time, as we did not need the van I simply wanted it. We returned to the dealership and told them to match the price or we were leaving. They still said no and we walked out. On Monday morning, I received a phone call from the dealer saying they would match the price and they would deliver the van to my house. I accepted and was a very happy customer. I have bought other cars since then and I always give that dealership, and that salesman, the first opportunity. They may have played hardball at first but in the end, they realized I was not going to give up and the amount of money they may have lost was worth keeping the sale and the opportunity for future sales as well.
Hoch, S., Kunreuther, H., & Gunther, R. (2001). Wharton on making decisions.
Hoboken, New Jersey: John Wiley & Sons, Inc.
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