When asking for a discount (or a raise) fails

I have a friend that recently bought a used car at full price. His excuse: “I asked for a discount but they didn’t give it to me so I gave up.” Sure, he could probably stand to learn a little bit about better negotiating but there is a better way to get a better deal.It’s no secret that most people have a hard time talking about money — just look at how many bloggers write about ways to ask for raises at work or save $100 on your next purchase. Sure, it’s great if people use the advice but most people won’t, so why keep beating the proverbial dead horse?

The point is not to avoid asking for the discount but to know exactly what to do when that tactic fails.

The art of asking for more

Next time you’re negotiating, try asking for more. I use this tactic when buying cars, dealing with vendors or bargaining with street merchants

and it works every time — despite what you might believe, most businesses would much rather give you something more than reduce the price. When your request gets shot down, don’t walk away pissed off —ask for something more: get them to throw in something else. (Tip: If you’re buying a car, you can usually get floor mats and your first few service visits absolutely free — ask for them after you think you’ve gotten the price as low as you can go.)

What businesses are thinking

At a 10% discount, a typical firm would need to sell 50% more units to keep the same profit on the bottom-line. Costs also increase in the “discount” game, so companies can literally discount themselves out of business. Instead of cutting cash out of the deal, they’d rather add value to whatever you’re buying — this “value added” proposition means they can “give away” something that won’t come out their profits. Done right, it adda to the customer’s experience and that’s the key to getting that customer back.

Oh, and one more thing

Use this tip when you’re negotiating your next pay raise. If the conversation gets bogged down before you get to the number you want, start asking for other perks instead — extra vacation days, telecommuting perks or educational reimbursements. It’s all fair game.

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