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Negotiating with banks

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Negotiating with banks Empty Negotiating with banks

Post  Max Thu Oct 21, 2010 12:55 am

Hurling insults, bribes, praise, threats. For those of you who know my history of negotiations know I take it very seriously and dont hold back (Fred may even claim I cheat). I have recently taken on the legal department of a major bank for our accounts at work, and won all points under negotiation.

What have I learned:

-Nothing works if you are dealing with someone who doesnt have any authority. You need to involve a supervisor as soon as possible.
-You need leverage. If you dont have something they want, they will not help you. Make sure you threaten their career by pointing out how they have not done their job and how you will escalate the issue to superiors if you dont get action, threaten to take your money somewhere else, promise to move more money in, promise to add new products.
-Keep your arguments logical, rational, and fair. You are only trying to get a good deal, not rip them off. They will be more willing to make a deal if they dont perceive you as greedy. Keep a poker face, keep calm, dont get angry, and be constructive at all times. Offer solutions at all times that result in you getting what you want. Be subtle, and dont be too overpowering.
-Reference their customer service policy, mission statement, slogan, everything they have that is supposed to define how they operate can be used against them and cannot be ignored. You can threaten to report the managers lack of compliance with the customer service policy to the banking ombudsman (a special customer service agent that wont actually help you, but sounds like he will). A lot of the banking staff dont seem to know their own customer service procedures, so you can catch them off guard by studying carefully and referencing the process confidently as though you have used it before.
-Be flexible within their bureacracy. You cant give me 4% mortgage, no problem, just give me a discount off of my renegotiation fees equivalent to the interest rate difference. Keep offering alternate solutions.
-Get it in writing. You need something that you can submit to the customer service department to prove your claim. This can be used as a threat against the bank representative you are dealing with.
-Dont acknowledge counter-offers for less than you want. Be firm and negotiate based on principle rather than positional (i.e. I want to be compensated fairly for your incompetence vs. I want $500).
-Be prepared to follow through with your promises. Have a backup plan. You will find that they may force you to make an ultimatum, and will only react after you have made a decision.

After you have won:
-It is not over yet. They will still negotiate with you to try and reduce the damage by remembering a bunch of small costs in order to realize the deal you have made. This is the time to grant them some concessions. You can be firm, but most likely this will only bring you back to the ultimatum again and you risk losing the deal you have made. Choose carefully.
-Deal does not exist until someone gives it to you in writing (signed).
-Try to reconcile with the person you are negotiating with. This is often a sensation of relief after negotiations that can help escalate your relationship with the bank representative. Use this to become better friends so you can get better treatment and deals in the future, but keep it clear that you will cause trouble again if necessary.

The two biggest factors in your success will be preparation (learning customer service policies, being better informed about how certain processes work than they are, and using that superior knowledge to make them feel off guard), and leverage (having something to offer or withhold that they want). Style counts for a lot too.

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