MoneyMagpie

Sep 01

Make and save money by negotiating

Does the idea of negotiating fill you with terror?

Would you rather pay a few extra pounds than risk the embarrassment of haggling?
moneymagpie_win-winActually, whether we like it or not, we are all negotiators in some way.

Whether it be in a business setting or at home with our partner or children, we all have to negotiate to survive – in fact, if you’re a parent you will know that kids can be excellent negotiators!

So fear not because help is at hand. You can be a negotiator as well as any sharp-suited salesman, if you just know the tricks. This article will teach you how to make and save money by negotiating.

We spoke with Derek Arden who has been an expert in international negotiation for over 25 years and has negotiated deals totaling up to £5bn. He has also recently written a (brilliant!) book, Win Win – How to get a winning result from persuasive negotiations.

 

 

Why is negotiating important?

make money negotiatingNegotiating means getting a better deal for yourself, or for someone you represent.

It doesn’t have to be in a business setting. We negotiate with people all the time.

For example, have you ever made an agreement with your partner about what you’re going to watch on TV? That, in itself, is a form of negotiation.

Derek Arden says “Negotiating is crucial, it’s a 24/7 skill. Most people don’t even realise they’re negotiating all the time. Even parents and children negotiate!”

In his book, Arden says there are two kinds of people in the world – those who negotiate, and those who don’t. Equally there are two prices in the world – one for those who do negotiate and one for those who don’t.

In fact Arden estimates that over the 25 years he has been negotiating he has saved over £250,000 (after taking into account compound interest.)

Even if you only saved a fraction of that, it’s a lot of money to have in your bank account. And of course, money saved by negotiating is tax free!

Remember, no matter where you’re employed, you actually work for Me plc.

You sell your time and your skills for payment – often in the form of a salary – and you either get paid what the boss thinks you’re worth or how much you can negotiate for yourself (more on that later.)

 

What if I don’t feel comfortable negotiating?

Make money negotiatingThere seems to be a fear in a lot of us that makes us hesitant or nervous about negotiating, particularly in everyday life.

Thankfully Derek Arden has some solid advice “ You need to practice. Pick somewhere you can negotiate and see what you can do.

“Obviously pick your battles, you’re unlikely going to be able to negotiate on price in a supermarket where the pricing is set, but try where you can,” he advises.

“Electrical stores like Currys are often a good place to try. You might not be able to bring the price down but you might be able to get something extra thrown in.”

In other words, flex your negotiating muscles and always try your luck for a better deal – you’ll start improving your confidence in no time.

There are things you can do to help make yourself more confident. Arden says  “Appearing confident is obviously very important. Wear confident cloths as this puts you in a good psychological state.

“If you’re negotiating on the phone it’s often good to stand up as you’ll feel more confident and more oxygen is able to go to the brain. In fact, did you know Winston Churchill wrote all his books standing up for this reason?”

“Walk a little faster than you normally do before and it will get you in the right frame of mind.”

Ultimately though you’ll have to take the plunge and get stuck into the negotiation.

“Be assertive, take a deep breath and go for it. Be brave and decide what you want to get. It helps if you’re able to connect with the person you’re negotiating with and build a rapport.”

 

How can I negotiate myself a pay rise?

moneymagpie_pay riseThere are many situations where we need to negotiate in life, but I put to Arden the big one – how do we negotiate ourselves a pay rise? After all, that’s what many people want but are too afraid to go after.

He says “Do a fantastic job. Over deliver. This has to be an ongoing thing. Keep notes of all your achievements because the boss won’t remember.

“Then ask for a rise, if you don’t ask you don’t get. Be firm but gentle. If the figure they suggest isn’t high enough then flinch and say “I was hoping for a bit more than that.”

“It might sound scary but you’ve got to show your options are open and you’re prepared to walk away. If you never have any intention of leaving then you probably won’t get a rise.”

Click here to read our whole article on the secret to getting a pay rise.

 

What is Arden’s top tip when it comes to negotiating?

I finished the interview with Derek Arden asking him what his single best piece of advice was for someone new to negotiating.

“Read my book,” he replied wryly.

But he had a little more to say than that; “Look at kids, they’re excellent negotiators. Watch other negotiations as a third party, study them, look at the body language. There are negotiations in sport all the time, so it’s easy to see!

“Study negotiation and you’ll continue to improve.”

Win Win – How to get a winning result from persuasive negotiations is the book that will help you haggle in the high street, in the office and at home.

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