About Me 0011: How to Making Money

I sat down not half hour ago to watch a replay of Raw. For the third week in a row, I have watched a full WWE show in order to see one man. A man who in the last month has become the "saviour" of wrestling for some fans and a mainstream publicity magnet for the WWE. The most impressive thing, it seems, is that he's only unleashed it now, a month before he leaves the company.

When the news first broke that CM Punk was planning to leave the WWE after his contract expired, I wasn't surprised. I honestly didn't and still wouldn't blame him. Not only because of the backstage stories of his poor treatment; from being buried in developmental, to his nickname as the "King of the Indies" (1).

Not only because it seems Punk has never been considered a member of the "Youth Movement", or as an established main eventer like Cena or Orton for sometime now. Leaving him essential in no man's land. Not only because Punk, a three time WWE world champion (four time if including the ECW world title), has been used for a while now to only advance Vince's home-grown talent.

But because he has never been truly valued as a WWE superstar. That was until now it seems.

While others like Chris Jericho and Batista left the WWE having been buried, Punk has used his last month in the WWE it seems to show Vince why and how he can draw money. He's taken the unlimited potential which guys like Paul Heyman and Steve Austin (3) have noted in him and used it to punch Vince right in his giant grapefruit's. In one scene of the movie, Wall Street: Money Never Sleeps, big time capitalists, Bretton James and Louis Zabel, are negotiating a stock bailout for Zabel’s firm, Keller Zabel Investments. In doing so, they reveal two powerful negotiating techniques that can help you secure the best deal.

James offers Zabel a measly $2 per share. “Under these conditions”, starts off James, “… [James and co] are prepared to risk $2 a share”.

“2 bucks?”, questions Zabel, breaking out in a nervous laughter shocked by the ridiculously low offer. “You're out of your mind. The stock was trading at 79 a month ago. Our building alone is worth more than 2 bucks a share. My board will never accept this. There is no way I'm going to sell for 2 bucks a share.”

The government representative steps in to back up James, telling Zabel that the government could never justify a high price for his firm and that he has no other option. If he doesn’t sell then he faces bankruptcy.

But Zabel remains unmoved. “I'll take my chances in bankruptcy court before I sell to that barracuda” angrily responds Zabel.

A blanket of silence falls over the room. It looks like the deal is off. Neither party is willing to pay the price the other is wanting.

The Defining Moment

Realising that the negotiation has reached stalemate, James decides to do something completely unexpected. While he really wants to buy Zabel’s firm and knows he is getting a great deal, he decides to walk away.

“Then we have nothing more to talk about” says James as he gets up out of his chair and turns to walk away.

But just as James reaches the door, Zabel calls out "6". It’s a counter offer.

“3 and that's it” responds James.

“5”

“3”

“Alright, we'll call it an even 4. So we don't look so god damn pathetic.”

James pauses for a moment, looks at his colleague for confirmation, who nods back at him in agreement, before taking a step forward. “3, and not a dime more,” says James and locks in the deal.

There are two key negotiation techniques used in the scene above.

Negotiation Technique 1: Use Anchoring and Adjustment

James started at $2 and Zabel started at $6. In what is called Anchoring and Adjustment (see Those Clever People at Wikipedia and a little phenomenon called anchoring) initial values, regardless of how extreme, have a strong affect on final values. In this case, James used a $2 anchor, not because he thought he would get it for such a low price but because he knew it would get Zabel to start thinking low values. To counter that effect, Zabel used a $6 counter anchor to get James to start thinking higher values.

If you are selling, start by asking a high price. If you are buying, start with a low price. The technique will subtly but strongly influence the figure the other party has in their mind, therefore allowing you to get the best price.

Despite the effectiveness of the technique, however, many people will not feel comfortable asking for an excessively high or low figure because they don't want to appear unreasonable. That is, they don’t want to risk the Zabellian response, ‘are you out of your mind?’

For those people, negotiation technique two provides for a more comfortable approach.

Negotiation Technique 2: Walk Away

Who wins in a negotiation? The one who is willing to walk away.

Guess what? Be willing to walk away. Even if you are willing to pay the asking price, pretend like you can walk away. This technique is especially useful for people who don’t see themselves as hard line negotiators.

Why? Because you do not have to haggle, you do not have to offer unreasonable figures, and you do not have to have a big mouth to use this technique. All it requires is that you risk not making the purchase on that very day, which, for most purchases worth negotiating for, is worth risking for.

Here’s How You Do It:

Next time you are negotiating with a business supplier, nicely tell the person:

“Thanks for your help but the price you’re offering is beyond my budget” (or whatever reason you want to give).

“But I’ll tell you what I’ll do. I’ll leave you my name and number and if you can do me a better deal, then give me a call and we can take it from there."

Now if that is the best price the salesperson can do then you probably will not get a phone call, in which case you can just go back the next day or so and buy the product. But if they can do you a better deal then they will call you. After all, you have already proved to them that you are not willing to pay their asking price.

What is more, 9 times out of 10 you will not even have to come back. If the salesperson is able to do a better deal, they will usually offer it to you on the spot. It will probably be along the lines of, “alright let me try asking my manager again and see if we can do you a better deal”.

Having been on both sides of the negotiation table (as a salesperson and as a buyer), I have seen this technique work over and over for all deals great and small. It is not only one of the most powerful negotiation techniques, but also one of the easiest and comfortable to use, which makes it all the more useful in securing yourself the best deal.

About Me 0011

Monday, August 1, 2011

How to Making Money

The Defining Moment

Negotiation Technique 1: Use Anchoring and Adjustment

Negotiation Technique 2: Walk Away

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