Improve Your Negotiations With The 5 Golden Rules.   LEARN THEM

I was driving south on the Squaw Peak around 9:30 a.m. when the engine missed. Despite my mechanical ignorance, I knew something was wrong.

My only question – whether I could nurse it to the shop without destroying the engine. I gambled, and five minutes later drove into the Nissan dealership.

I explained the problem to John (not his real name), the guy who usually writes up my repair tickets, and got a ride back to work.

I left with a bad taste in my mouth, sensing big dollar signs on the horizon.

I was right. John called around 10:30 a.m. to tell me the damage: $1,900.

Yikes. John also said he’d need the go/no-go sign by noon if I wanted the car that day.

After giving it some thought, I decided to: (A) evaluate whether the work needed to be done; and (B) see how far I could negotiate down the price.

My first negotiation step, after defining this goal, was to gather more information.

So I asked John what exactly needed to be fixed, and how he made this determination. What parts needed to be replaced? What did each cost? What was their labor charge and how long did they estimate the repair would take? What other charges were included? Finally, what options did I have other than fixing everything?

Armed with this information, I glanced at the clock. It was approaching noon, so I applied what I call the DEF Principle. Deadlines: Evaluate their flexibility.

Some negotiators impose artificial deadlines to increase pressure on the other side. Some feel the pressure more acutely than others and thus often cave too quickly. Deadlines also may prevent the other side from gaining sufficient information and leverage to get the best deal.

The counter strategy? Evaluate whether the deadline can be changed and, if so, determine its cost. In this case, given John’s time estimates to repair the car, I knew the deadline was pretty real. Yet, I ignored it. I figured I would save more than the $30 rental car cost/day with an hour or so shopping around.

So I started to call. I called four other Nissan dealerships and an independent repair shop.

Why? In all negotiations, the ultimate value of any agreement should be judged based on its realistic alternatives.

The better my alternatives to an agreement with John, the more leverage and power I would achieve in my negotiations with him. So I dialed.

In each call, I described my car’s problems, John’s proposed solution and asked if the work appeared necessary given the car’s symptoms, age and mileage.

I then told each I was calling five different shops, would go with the lowest estimate, other things being equal, and wanted their absolute best price.

Interestingly, while the diagnosis appeared accurate, the estimates ranged all across the board. Their labor rates ranged from $55 to $72 an hour. Even the parts costs varied by dealership.

The best price? $1,450, including tax.

Time to call back John. After all, my car still sat in his shop and I trusted the work they had previously done on my car.

After shmoozing a bit, I told John what I had done, what I had found and asked him to beat $1,450. He said he didn’t think he could, but he’d check with his boss.

A short time later, John called and said they’d match it, but that was their best price. I believed him.


Nope. I then asked about a rental car, knowing John’s dealership had an on-site rental agency. John hemmed and hawed, but then agreed to provide a rental car, too.

The negotiation lessons?

In this context, gather sufficient information, evaluate deadlines’ flexibility, research alternatives, exercise your leverage, do it in a nice way, and don’t forget one of the principal negotiation lessons in life – you’ll never get what you don’t ask for.

You’ll also do better if you treat it like a game.

Enjoy it. I certainly did – until the credit-card bill arrived.

Published May 21, 1999 The Business Journal

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