This is Part 2 of a two-part post on negotiating tactics. Please click on this link for Part 1 of this article.
As I noted in the first part of this article, I have always believed that one of the most important life skills that every person should have mastered before setting out on their own is the ability to successfully negotiate.
For most of us, negotiating skills are usually needed shortly after we leave home to strike out on our own for the very first time. For example, the opportunity to engage in negotiations often comes into play when we get our first job, move into our first apartment, and buy our first car.
In Part 1, I highlighted the first five essential tactics that everyone should know. Here now are the remaining five tips that I always follow to ensure that I get the most from my negotiations:
6. Use Misdirection to Gain Negotiating Leverage
Just as misdirection is a key tactic used in competitive environments such as poker, sports, and even war, it is also an important aspect of successful negotiations. Going back to the example that I highlighted in Part 1, although I had saved $10,000 to cover the costs of a new block wall, before any contractors drew up their bids I made sure that they understood that my money situation was tight. I also let them know that because money was tight I was only “considering” a new block wall, even though I was absolutely certain that one was going to be built. By doing this, I hoped to lower the contractor’s initial bids and, by extension, their negotiating starting points.
7. Remember, It’s Just Business
Keeping your emotions in check is crucial when negotiating for anything. Raw emotions often become exposed during negotiations because many people look at the process as a win-at-all-costs situation. The truth is, yelling, making threats and/or making take-it-or-leave-it demands will quickly alienate those who you are negotiating with to the point that it could permanently sour any potential deal. Negotiations should always be conducted with respect and a cool head.
Always keep in mind that, at the end of the day, negotiations aren’t personal – they’re just business. Remember, the person you are negotiating with is simply trying to the best possible deal just like you are.
By the way, on the rare occasion when I encounter a hot head negotiator, I immediately walk away from the deal, as this signals to me inflexibility on the part of the other party.
8. Signal your Willingness to Walk Away From the Deal
In order to maximize your negotiating leverage, the other party has to be convinced that you are not emotionally tied to whatever it is that you are bargaining for. As long as they feel you are willing to walk away from the negotiations, you will be able to maximize their concessions.
9. Remember, A Contract Placed In Front of You Is Not Immune from Modifications
A strong-arm tactic used by many salesmen and agents is to place a pre-written contract in front of you and then ask you to kindly sign on the dotted line. Keep in mind that the contract before you is written with their best interests in mind, not yours. As such, it is important to remember that whenever a contract is placed in front of you for your signature, there is no law against offering “red-line” modifications to any part of that contract before you sign.
For example, many real estate agents will hand you a contract that makes them the exclusive seller of your property for a 6-month period. But what if you want that period to be for only three months? Is the agreement dead on arrival? Of course not! Just cross out the offending clause and replace it with your modified terms. Again, the worst that can happen is the other party will simply decline the deal if they do not like your proposed changes.
10. Don’t Exploit the Other Party – Ever!
A successful negotiation is one where both parties end up feeling like they got a good deal. Negotiations should always be tough but fair for both sides. Trust me, taking a hard-line approach that exploits others is absolutely counterproductive. Why? Because when you try to exploit the other side, one of two things will usually happen, and neither of them are good for you: 1) you will derail the negotiations, or 2) you’ll unwittingly end up with an inferior product or service that costs you more in the long run.
I learned this lesson first-hand many years ago when I took a hard line with an irrigation contractor that I knew who really needed the work. Because he was desperate, he eventually agreed to some very unfavorable terms for him and his business but, as I already mentioned in an earlier post, that ended up being one of the biggest money mistakes I ever made.
Yes, I got a great price, but I paid dearly for it in the end because he had to use some very inferior high-maintenance materials in order to ensure he earned a profit for himself.
That’s a mistake, I can assure you, I’ll never make again. 
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Great article. Since people are always negotiating about something everyday I think this post is so valuable. I like #10 where we are encouraged to remember that negotiating is working with someone not against them.
Glad you enjoyed it, Craig! In terms of importance, number 10 probably should have been listed as number 1!