Approach a negotiation of salary or the price of an asset like a house, with the Ackerman method. Negotiating will be a breeze using this very simple technique.
Set your price target
A negotiation will always be easier if it is well prepared. If you are in front of the person in an interview or an appointment, you will be less stressed if you’re well prepared.
Write down any questions you may have as well as your maximum price if you are buying, or minimum price if you are selling or negotiating a salary. This will serve you later. Without it, you will get embarked on a traditional negotiation, where the price will naturally fall between half your price and the price of the interlocutor.
Think about non-monetary elements, which can add weight to your proposal. For example: “I am free immediately; ok but with 2 days of teleworking « for a job, » I don’t have any pets; I’m a good payer, you can call my former landlord » for a rental; « I can come tomorrow to sign » for a car purchase.
Psychology in price negotiation
Humans are unfortunately subject to many psychological biases, which we may be aware of but which are difficult to avoid. There is a whole range of techniques to give your interlocutor confidence, but also to draw useful information to better understand him.
One technique that works very well, which you can also use in any conversation, is the mirroring. This consists of simply repeating the few words at the end of the sentence of your interlocutor. « Of your interlocutor? ». Try and you will see that the person with whom you speak will naturally develop his thought, will feel listened to. The mirroring will bring about a climate of trust.
Here are some examples where you can easily use the mirroring effect :
« Your salary is already very high » => « Already very high? «
« I do not want to sell off this car, it is close to my heart » => « It is close to your heart? «
“It ended badly with the old tenants. » => » It end badly? «
Once you have some additional informations and confidence in you, you can move on to the next step, talking about the price.
The anchoring effect
The anchoring effect is a bias that can trick you into putting a number in your head, which can distort your perception, here we will talk about it for prices. For example : « I have a friend who does the same job for $ 3,000 », « I visited a similar property for $ 185,000 », « I don’t think I can offer you more than $ 65 ».
Once this price has been announced, negotiations will naturally revolve around this anchor.
The Ackerman method price negotiation
Find your (realistic) goal, which will represent what you are willing to accept. Then we will apply the Ackerman rule of 65% / 85% / 95% / 100%. This allows you to vary your price less and less, until you reach the goal of 100%, which is the amount you set out to start with, while giving the impression that you have made a budget effort. For the last price, we will give a not round number to reinforce the idea of a calculation. It will give even more credibility, as if you had made an extreme effort.
Here are two examples :
- Negotiating a salary. Your target : $ 50,000. Start by announcing 76,500 (135%), then 57,500 (115%), then 52,500 and your last offer at 50,417 (100%).
- Negotiation of a piece of furniture sold for $ 250 , your target is $200. Begin $ 130 (65%), then 170 (85%), then 190 (95%) and finally $ 198 (100%).
Your first offer is rarely accepted, but it acts as an anchor, and will make your subsequent offers credible.
To quickly calculate these different levels and know how to respond to an offer without thinking, I created an app for iOS and macOS that automatically gives me the prices to be announced, whether you are a buyer or a seller.
To go deeper
In order to be an expert in price negotiation with the Ackerman method, here’s the book with which I learned a lot about psychological biases and negotiation. It is a very good investment that quickly pays for itself :
If you like the Bargain app, you can also check my other apps here.
