The Power of Bargaining

In these challenging economic times, the power of bargaining or haggling...a type of negotiation in which the buyer and seller of a good or service dispute the price which will be paid and the exact nature of the transaction that will take place, and eventually come to an agreement [Source: Wikipedia] is a great skillset to have in today's workplace and personal life.

Employers and employees alike have been asked to be budget-conscious more so these days than perhaps in recent past years. As a manager, it is my mantra to run the office like I would my own finances - mindful of every penny/dollar that is spent and trying to get as much bang for our buck as possible. Since I have been manager, the office budget has come in at 5%-7% under budget, which is quite significant when budgets can be multiple millions.

This year our national office has asked that regardless of how fiscally responsible we have been, we have to constrain our spending by an additional 5%. Some companies would terminate an employee as the amount requested to be slashed equalled a salary. Instead, a lot of time has been spent on reviewing each budget item and reducing it where able. This required a lot of bargaining/negotiating with staff and stakeholders.

Other departments have also been asked to cut-back, for some this is not as easy - they have been used to dealing with this money not as their own and may not have been as careful about how it was spent. For example, a budgeted amount has been set aside for food & beverage (non-alcoholic) at an upcoming conference in the fall. Last year, the same organizers insisted that the hotel we had selected for the conference would not negotiate/bargain a lower price...I knew that was not quite accurate so this year, I took it upon myself to contact the hotel directly and bargain a more reasonable price that came under budget by $20,000. The hotel was very accommodating and told me that "they value our business and are in it for the long-run, not a short-term cash grab". This was a rather refreshing exchange between a salesperson and myself and opened up my eyes as to the power of bargaining.

Recently, I have applied bargaining in my personal life and managed to get two weeks free cable for some service issues that I experienced with the cable company. For some bargaining is not a new concept, however it bears reminding that being able to bargain effectively can be lucrative and that companies are willing to bargain if it translates into retaining you as a customer.