There are plenty of standard methodologies and techniques people rely on when it comes to handling negotiations, in everything from haggling over a yard sale purchase all the way up to buying a company. You've probably seen the ads for seminars to teach these time-tested techniques.
Through my own experience, I've come to rely on a simple three-step process that delivers almost every time: Flinch, reflect, and go silent. While each of these techniques alone can help move the needle in a negotiation, the real magic happens when you layer them all together.
Let me explain how it works--and how you can use it to gain some significant concessions in your next negotiation.
It's human nature that when someone quotes a price, many of us don't want to be embarrassed and therefore respond by saying, "That's reasonable." But if your goal is to negotiate that price down, that's the worst possible response to lead off with. Rather, when someone shares a price with you, you're better off by displaying some kind of "flinch"--perhaps reacting as if the person somehow slapped you. My preference is to make some kind of verbal response, saying "oomph" or sucking air through my teeth to indicate my physical displeasure at hearing that price quoted. The point is to communicate your discontent with the price in a clear, nonverbal manner. What's important is that you flinch no matter how reasonable the price. This is a time to remember your drama class and go big on the flinch.
After showing your physical displeasure with the initial quote, your next move is to repeat back to that person what they said in a way that reinforces how steep you think it is. Let's say you're trying to buy a rug at a flea market, and the vendor quotes you a price of $100. After flinching, you might then say something like: "$100 for this rug?" or simply "$100?" The point is to communicate how shocked and displeased you are by the price they are quoting to you.
3. Go silent
The last step in negotiating for a better price is to go silent. Be warned: This is extremely uncomfortable for both you and the other party. But it's also extremely effective, because at some point someone will be moved to break the silence. Remember the rule: Whoever speaks first, loses. Your goal is to ensure that you keep your mouth closed, even if every second seems like it drags on for minutes at a time. Just staying quiet for 20 seconds can seem like an hour. But, remember, don't speak up. One tip that I use is that I will literally bite my tongue (softly) to ensure that I don't break the silence. The prior two steps set up this powerful final move in gaining a concession.
If you can pull off these three steps--flinch, reflect, and go silent--you'll find that you can win some significant concessions from the person you are negotiating with. As I mentioned earlier, deals can range from the small and insignificant like a yard sale coffee mug all the way up to a high-stakes negotiation to buy a company. I have had success in all of these scenarios.
I remember one case where I even used this technique to reduce the escrow on a deal from 24 months all the way down to 12 months. While it was difficult, especially the remaining silent part, it resulted in a big win. My suggestion is to try it somewhere small to learn the technique, so you are practiced when it really matters.
The next time you find yourself in a negotiation of any kind, give this three-step technique a try and see what kind of amazing results you get.