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The 5-Step Negotiation Process I Use To Lower My Monthly Bills By 25%

04/01/2015 07:47 am ET | Updated May 31, 2015

Anyone who tells you something is "non-negotiable" is, in fact, using that as a negotiation strategy themselves. Those of us familiar with haggling know the truth: everything is negotiable.

Where I am in The U.S., negotiation is typically reserved for used cars and flea markets. It's not customary to question the price of something that doesn't fit in those categories.

This means people who sell things in my part of the world are at a huge advantage. You can set your price at whatever you want and most won't argue. What if it wasn't like that? What if you had the power? What if you decided how much your phone or Internet bill is?

These are the things you pay for every month. Over time, they add up to tremendous amounts. What if you could cut those bills by 20% or more just by learning a bit of negotiation psychology?

I tried my hand at this last year and recruited a few friends to do the same. We all lowered our bills or received improved service. And it all took us 10 minutes or less.

Here's a brief rundown of everything you need to know to learn the psychology of negotiation and get big companies to let you decide what you're going to pay.

How To Negotiate Your Monthly Bills

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Image courtesy of Silke Gerstenkorn

Last year, I teamed up with a Portland news station, KATU, to test the major principles of negotiation on big companies like Comcast, AT&T, Verizon, and others we all tend to pay a lot of money to. The questions we wanted to answer were:

  1. Do the principles of negotiation still work when little consumers like us try to strike deals with enormous corporations?
  2. Can anyone do it?
  3. If so, how much work does it take to get a decent deal?

I recruited a few friends, prepared some tips for what to say and how to respond when they spoke to a representative, and we set to work.

After a quick bout of verbal kung fu, my friend, Kiah, was able to lower her Internet bill by $15/month. Another acquaintance, Heather, doubled the mobile data her provider was offering without paying extra. As for me, a leisurely web chat resulted in a 25% savings on my home Internet bill.

The results were exciting, but hardly surprising. When you know the fundamental principles of negotiation--and it doesn't take much work to put them to use--you can get a better deal on anything.

Here are the five principles you can use, starting now, to lower your monthly bills.

1. Speak in a friendly-assertive voice, no matter what happens.

When you start negotiating with someone--no matter who they are--the goal is to get what you want. That's easier to do when the other person likes you.

Your friendly-assertive voice is the one that's always calm and courteous but never gives in. Compare it to how a mother would deal with a toddler having meltdown in a store. "I know you're very upset because you can't have the dinosaur toy. I still love you. Also, you still can't have it."

You won't deal with hostility like that when you're talking to a customer service rep (at least let's hope not), but remembering this can help guide you when you feel like reaching through the phone and throat punching the guy on the other side.

2. Ask for more than you want, then slowly back down.

One of the keys to successful negotiation is to make it seem like you're on a team finding a solution together. One way to do this is to give in here and there.

When you give in, the other person feels more comfortable doing it, too. But, you still want to get the deal you need, so it's important to start by asking for more than you want so you'll have room to move down. This brings the other person to your side without giving up what you actually want.

3. Only negotiate with someone who has the power to do so.

When you call customer service, you'll usually talk to a "first line" representative who has no authority to negotiate at all. This is a strategy they use. The first line rep will tell you how sorry they are and how they understand your position but that they can't do anything about it.

Don't give up when this happens. Instead, ask to speak with someone who can help you with your request. There is always someone who can, but they may be one or two transfers away.

If you feel like you aren't getting anywhere, there are two things you can do.

  1. Hang up and call again. Big companies have lots of agents. If you try a few times, you'll get someone willing to help you.
  2. Ask to cancel your service. You won't actually do it, but this will always get you to someone who can negotiate. Big companies have whole departments dedicated to keeping you from canceling. They know it's more expensive to get a new customer than it is to keep you, so the person from this department will almost always have authority to make billing exceptions for customers.

4. Always have a backup solution.

Sometimes, you just won't get anywhere when you're negotiating over price. For one reason or another, it'll become clear that lowering your bill simply won't be an option. This might be the case if you're already on one of the lowest tiers of service and they know you're already not making the company much money to begin with.

When this happens, you can do what Heather did with her cell provider and negotiate for better service at the same price tier.

The more solutions you propose in any negotiation, the more likely it is you'll find something the other side will be more willing to negotiate on. When you find those, focus in.

5. Know when to stop.

There's nothing worse than a negotiation that never ends. To leave both sides feeling good, you want to come to an agreement quickly. This means knowing when to stop negotiating because you're either too far apart or because you're so close together it's not worth squabbling over anymore.

To know when to stop, though, you have to go into your negotiation knowing what the least you'll accept is. Before you get on the phone, ask yourself, "What's the lowest I'm willing to go and still be happy?"

When you know that number, you can skip a lot of frustration and confusion. You'll know quickly if you're never going to get there and you can adjust, if you want. Or, you'll know when you're close enough to what you want that you can call it a deal and be on your way.

Knowing what you'll accept before you start is key to getting what you want and keeping a negotiation from dragging on.

The Best Deals Go To Those Who Ask For Them

Just like anything in life, it's rare to be good at negotiation if you don't practice it. It's not complicated or difficult to learn the basics of negotiation psychology. What is difficult is getting yourself to put it to use when you're not used to it.

Whether you feel like you're not skilled at it or you're just uncomfortable asking for a better deal, remember that life is for the taking! You won't get anything you don't ask for!

Talking to a representative on the phone or even chatting online is one of the best opportunities to start practicing and improving your skill. Take 10 minutes and try it out today. It could save you tens of thousands of dollars.

Tyler Tervooren founded Riskology.co, where he shares research and insights about mastering your psychology by taking smarter risks. For more, join his Smart Riskologist Newsletter.

This article was originally published at Riskology.co

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