Category Archives: Negotiating

A Drop of Honey Makes You Money in Negotiations

Hello again, I’m Kevin McKee from Thousandaire, ready to destroy Daniel in another one of our epic arguments.

Daniel is a great guy, but he and I don’t usually agree on much. Luckily I’m here to straighten him out. Okay, maybe he has won our last two arguments (according to public opinion), but I have a feeling this one is going to be different.

Daniel believes that if you want to negotiate well, you have to be a huge jerk. He claims that Hostility is the Best Negotiation Technique. Baloney! Everyone knows that people are much more willing to make you happy when they don’t hate you. It all goes back to an old saying from Abraham Lincoln:

A drop of honey catches more flies than a gallon of gal. So with men. If you would win a man to your cause, first convince him that you are his sincere friend.

In other words, a drop of money makes you money in negotiations. If you can make someone like you, they will be much more willing to help than if they despise you.

Being nice can get you free stuff when you don’t even deserve it. When I first moved to Dallas, I went to Potbelly’s for lunch. I had never been before, so I struck up a conversation with the cashier and playfully asked, “Is there a first-timer discount?” She said there was no official policy, but since I asked so nicely I could get a free dessert. Sweet! Imagine trying to get that free dessert by being a jerk. It would never happen.

A free cookie is nice, but what about when you are arguing with a company bad service or overcharging? The important thing to remember is that you can be nice and forceful at the same time. Being nice doesn’t mean letting people walk all over you. You do have to be persistent and escalate your problem to a manager if necessary, but at no point do you have to be rude, obnoxious, or hostile.

When I leased my last car, the dealership tried to get me to pay an extra $1,000 over what we originally agreed upon. They said I didn’t qualify for a $1k rebate that was included in my purchase, and I’d have to pay the difference. I could have gotten angry and upset, which would have made them try even harder to collect the money from me. Instead, I told them very calmly that if I couldn’t keep the car at the original price, they can refund my down payment and give me back the keys to my old car. I was pleasant but persistent, and in the end I didn’t give them an extra penny.

I will admit, I was 100% right in that situation. We had already signed the contract and they were trying to change the terms after it was signed. I could have gotten angry and still walked away without paying anything extra because there was a clear right and wrong in that situation, and I was right. It’s even more important to be nice when you are trying to get a customer service agent to fix a problem or credit your account when there isn’t an obvious breach of contract.

My high school girlfriend worked at the Sprint Store. They sold mobile phones and plans, and she absolutely hated the job. People would come to the store irate about overage charges or dropped calls or anything else they wanted to complain about. She was a salesperson by title, but she spent most of her days dealing with unhappy customers.

She was actually empowered to make significant changes to people’s accounts. She could waive fees, give account credits, get new phones for free, and lots of other stuff. But do you think she did any of those things for the people who came in and screamed at her? Of course not.

She would make sure the angry people left the store just as angry as they came in. She wasn’t going to reward someone for being a jerk. On the other hand, she would offer discounts and credits to people who were nice, even if they didn’t ask, just because she was happy to deal with someone pleasant.

Finally, Daniel can pretend that he believes being jerk is the best way to negotiate, but in reality he doesn’t even agree with it himself. Daniel prefers to ask nicely for a credit after a bad flight experience and his fiancée got free internet at a hotel by just asking nicely. Daniel pretends to be a big meanie-head, but in reality he’s just a teddy bear who understands that a combination of persistence and a smile on your face is the best way to get what you want.

So remember, Daniel and I will determine the winner of our debate via the number of comments, so post one here if you think pleasant persistence is best, or post one on Daniel’s article if you think being a jerk is best.

Also, feel free to check out some of our previous arguments below:

How to Use Personal Finance to Make Friends vs. Coupon Sharing is Stealing
Investments and Credit Cards Are Not an Emergency Fund vs. Don’t Waste Your Money on an Emergency Fund

Asking Is Always the Best Solution

This post was written by Lauren, my fiancee. It turns out I’ve taught her a thing or two!

I recently drove 12 hours from Maryland to Chicago for my roommate’s wedding. Upon our arrival a friend and I were offered an extra hotel courtesy of the groom’s parents. We sleepily crawled into the comfortable beds after a very long drive and desperately scrambled to turn on our computers and soothe our Internet withdrawal symptoms.

Click: computer on. Click: FireFox loading. Click: Facebook… intercepted by the hotel’s Internet access fee page. $12.95 for 24 hour Internet use. WHAT?! Outrageous! All I needed was an hour to check my Facebook and email, and maybe play a couple rounds of Bejeweled (it’s very addicting). It wasn’t worth the $13, but I did want it pretty badly, so I started thinking of other possibilities to connect to the Internet.

Ever since I met my Daniel almost 3 years ago, he’s always encouraged me to bargain and haggle, to get the experience. I consider him an expert in getting discounts, but for some reason he never wants to negotiate for me, giving me the ‘you’ll never learn if you never try’ excuse. LAME!

Without Internet, finding ways to get a discount were few and far between. My first move was calling Daniel to see if he could find any complimentary access codes online for this hotel. Nothing came up, but he told me to try calling the front desk and ask them for a free code. He also told me to sound as sappy as possible, about how I love the hotel, but after a 12 hour trip, I just want the Internet for a little so maybe they could help me out. That option seemed completely ridiculous, asking for a free service when clearly they want you to pay!

Despite my shyness and fear of being turned down I made the call. It turned out that my fear of no Internet trumped my fear of rejection. At least I didn’t have to go down and talk to the guy in person:

Guy at Front Desk: “Hello, this is the front desk”
Me: “Hi, I just checked into the hotel a few minutes ago and I only need the Internet for an hour tonight and am checking out early in the morning. Would it be possible to get a complimentary access code so that I didn’t have to pay $13 for one hour?”
Guy at Front Desk: “Sure no problem, just sign in and we will remove the cost from your bill.”

WHAT?! It worked? No long arguments, no threatening to check out immediately, no asking for a manager? Amazing. Who would have thought that all I had to do was ask for free Internet in order to get it (I feel like I’ve tried that with Comcast before and failed miserably)! The worst case scenario of that story the man at the front desk would have gently declined and explained it was not a possibility.

Moral of the story: Always ask because the answer is always no to a question you never ask!

Face to Face Negotiations are Easier Than You Think

I love negotiating, plain and simple. Who doesn’t love the fact that just asking or in some cases saying nothing at all can save you money? It’s a lot easier via email, but it turns out the art of face-to-face negotiations hasn’t been lost on me.

About 3 weeks before I proposed to Lauren, I found the jeweler who was going to make the perfect ring for her. Instead of buying the ring I wanted (because it was crazy expensive to buy it from the upscale store that sells it), I searched for a diamond dealer who could re-create the ring for a far lower price.

I visited a few jewelers, got a sense for their prices, and ultimately decided on a deal in Virginia who not only had terrific rates, but took the time to answer all my questions before pushing me to buy. In fact, I never felt any pressure from him, so it was a fairly easy decision for me. In contrast, a few of the other jewelers pushed me to look at stones with qualifications that weren’t within my requirements.

My issue was getting the biggest bang for my buck. But in reality, I wanted to spend my budget. If I were just trying to save, I would have bought a much smaller center diamond with lower qualifications, but for my future wife, I decided to go all out. I set aside a certain amount of money, and I intended to spend it.

After passing on a diamond that would have only used about 80% of my budget, the jeweler called me back when he found something a little larger that fit my requirements. It was the perfect size and it really sparkled. It was stunning.

But it pushed the price of the ring to very top of my budget. I could have (and would have) paid his price for it, but I promised myself that I would negotiate in this situation. When else would I get to spend thousands of dollars and put the owner in the position of risking a nice sale over a relatively small amount of money? So I finaly built up the courage and this is how our conversation went:

Me: I was hoping to keep the price a little lower.
Tom: I mean, it’s a beautiful ring, I already given a cash discount, and it’s a great price for that stone. Or we could go with the smaller stone that’s significantly cheaper, if that’s what you want.
Me: I don’t know, is there any way we could do it for $XXXXX,500? (I’m not telling you how much I spent, but it certainly had fewer Xs than that!)
Tom: I can’t go that low, but I can split the difference, which comes out to $XXXXX,700.

I shifted in my seat, thinking about it, trying my best negotiating tactic by stalling and seeing if he would react. He didn’t for a full minute, so I gave it one last show.

Me: Can you do it for $XXXXX,600?
Tom: Alright, let’s do it.

Sweet, I saved $300 just by asking! And that’s real savings, not the pretend savings people sometimes claim. It’s not saving if you wouldn’t have paid the higher price!