Negotiating the Purchase 

“Everything is negotiable” says Gavin Kennedy, the author of the book of the same name, and a Fellow at Edinburgh Business School in Scotland.

A diamond engagement ring may be one of the biggest purchases that you make in your life, behind a house and a car. This makes it an eminently negotiable purchase and one that you would be crazy not to negotiate on.

Once upon a time, before the age of the Internet, the negotiating advantage was held by the diamond merchant, with their grip firmly on diamond knowledge and current diamond prices.

However plenty of information is now available on diamonds and their prices and as a result the negotiating advantage has swung in favour of the purchaser. Purchasers armed with this new information have access to a large pool of potential diamond retailers and merchants.

Personally, I found the negotiation step in the purchase of Lou’s engagement ring rather fun, and looked at it as a way of not only being able to buy more diamond with less pounds, but also a chance to sharpen my negotiating skills.

If you are not comfortable with negotiating you need to take it one step at a time and start realising that negotiation is both a process and a game that can have two winners.

Let’s look at some of the tactics available to you.

Tactics for Successful Negotiating 

1. Since the price of the diamond that you want is a known you have the slight advantage of knowing what the jeweller’s maximum selling price is. You now need to find out what their minimum selling price is. You can do this by offering a price low enough so that it will force the jeweller to lower his/her price but high enough so that he/she does not laugh you out of their shop/office for suggesting such a ridiculously low price.

2. Don’t have your fiancée with you when negotiating or else you will end up spending more. No matter what she says, she really does want a bigger diamond and if she is there next to you when you’re negotiating with the dealer then you will be helpless to stop the dealer influencing you by using her.

3. Load your negotiating rifle with plenty of “bullets”. This means having many reasons why the jeweller should sell the diamond to you significantly lower than what he/she is asking.

Examples of these might be:

a. Joe Diamond down the road is going to be able to sell you a similar diamond for less.

b. Your fiancée really loves the diamond but it is too expensive for you at his/her current price.

c. You are willing to purchase at his price if he provides free wedding bands to you (make sure you specify
what material).

d. If the laboratory certification is not a GIA one, then you should be able to bargain him down a few hundred pounds or more.

e. You guarantee to give him future business, i.e.
wedding bands, earrings etc if he sells to you at your price.

f. If he/she sells to you at your price, you promise to tell all of your in-love friends planning to get married
about his/her business thereby gaining him more revenue from your business.

Remember not to fire all of your “bullets” at once, it could be a long negotiation process and you may need to draw on some further reasons later.

4. Writing a cheque for the amount that you are prepared to pay and taking that to the final negotiating meeting can do wonders. To the jeweller a bird in the hand is definitely worth two in the bush, especially if he/she has invested a lot of time in educating you about diamonds and finding you a great diamond.

5. If you are well into the negotiation period, the walk away tactic, while being a bit uncomfortable to do, can work wonders. This is where you politely say to the jeweller that although you would like to take him/her up on the deal, your budget just can’t stretch that far, and so you are leaving. Because of the time investment that he/she has put into you, it is highly likely that as long as your bid price is not too low, then they will meet it or at least be very close to it, in order to not lose the deal completely. As for further resources for negotiating I would recommend reading anything by Gavin Kennedy, who has written extensively on this subject.

Recognising Persuasion & Influence Tactics Being Used Against You 

While the game of negotiation is played out, the diamond merchant will be doing everything in his/her power to influence you to

a) Purchase from him/her and

b) Purchase the diamond at the price that he/she wants.

It is important that you are aware of the most common tactics that will be used against you.

Dr. Robert Cialdini wrote an excellent book called “Influence – Science and Practice”. In it, he explains the 6 major tactics that "influencers”, e.g. salespeople use to powerfully influence the rest of us.

These 6 tactics are:

a) Reciprocity

b) Consistency & Commitment

c) Social Proof

d) Liking

e) Authority

f) Scarcity

Another technique that Cialdini also describes in detail is the Perceptual Contrast technique.

I actually read this book after I purchased Lou’s ring but looking back, I can now see how these tactics were employed by the diamond dealer who supplied the ring.

Reciprocity 

This tactic can essentially be summed up in the saying “you scratch my back and I’ll scratch yours”. It is welded into human nature that whenever someone does us a favour, we are then indebted to that person until we return a similar favour back to them. Not repaying ones debts tends to be something that most people will avoid because it is not seen as a positive value in a person.

Think about the last time that someone did you a favour. How did you feel afterwards? Have you repaid that favour or is it still "owing”? How does that make you feel?

Don’t underestimate this rule – it is very powerful and used to great effect by salespeople. An example of this is when a salesperson takes a prospect out for a “free” lunch. The prospect then feels a certain indebtedness to that salesperson, which can contribute to increasing the chances of turning that prospect into a customer.

A perfect example of how a diamond dealer may use this rule against you is to give you a “free, no-obligation consultation”. This will most likely comprise sitting down with you for an hour or so and explaining all of the intricacies of diamonds to you. You will probably be offered a glass of wine or champagne, or tea and biscuits. You haven’t paid for any of this, and he or she has just given you an hour of their time. Will you let the rule of reciprocity be used against you in this situation?

The best way to combat this rule being used against you is by changing your perception of the action. Rather than viewing any thing done for you by the jeweller as a favour, simply view it as a technique to enable you to more easily comply with what he/she wants. This change in perception then negates the feeling of indebtedness that you will feel if you view the action as a favour.

Consistency & Commitment 

The consistency and commitment tactic can be summed up by saying that if you have done or said something in the past, then you will likely be consistent to the past action with whatever you say or do in the future. It is another human trait that is valued positively; the person who does what he/she says that they will do, a sign of integrity and stability. Most people will avoid not being consistent.

The commitment part of the rule means that small commitments often lead to larger commitments.

The expert salesperson will use this subtly against you. For example, the diamond jeweller may start off by getting you to agree that a certain diamond they are showing you is beautiful. Later on he or she might ask you whether you think the diamond is more beautiful than an inferior diamond they are comparing it too. Still
later the jeweller may ask whether you think your fiancée would cherish the moment when you propose and present the diamond to her.

Because these questions that gain your verbal commitment are asked over a period of 10 minutes, you probably weren’t aware of the purpose of the questioning. But when the jeweller recaps to you what you have just verbally “committed” to, stating that it looks like the perfect diamond for you both and then asks “how will you be paying for that today?” then the pressure can be intense not to backtrack on what you have just verbally committed too.

To defend against this rule being used against you, you must be aware of the type of questioning that is used by the jeweller. What theme is presented by the types of questions he or she is asking? Listen to your gut feel about it and don’t be forced into a corner where you feel like you must purchase there and then because of any consistency issues you are feeling.

Social Proof 

Social proof is the human tendency to accept that what everyone else is doing must be the correct course of action. It is the “if the Joneses are doing it, then probably so should I” syndrome.

An example of how a jeweller might use this against you is to tell you that “emerald cuts have been all the rage during the last year and most men tend to be buying ones larger than a carat. Bridal Monthly also ran a survey and found that the cut and size that most women wanted is the emerald cut, greater than 1 carat”.

Here the jeweller has used 3 pieces of social proof against you:

a) A particular cut is fashionable, which is anecdotal unless backed up with proof,
b) That men are buying this cut larger than a carat, again anecdotal unless backed up with proof,
c) That women who have been surveyed prefer this cut bigger than a carat, and again, unless you are shown this survey firsthand, remains anecdotal.

To prevent this tactic from being used against you, firstly question any social proof statistics that the jeweller uses. After all, what they say will invariably be anecdotal. Any actual data they provide should be independent of them and their business otherwise it is too easy to fabricate.

Secondly, you need to realise that just because the majority of people are doing something, doesn’t mean they know something that you don’t. The majority of the crowd are themselves probably acting on the principle of social proof. What is the lesson here? Question everything!

Liking 

This is a natural tactic for almost anyone to use in any situation. We all like to be liked, and will use rapport-building skills such as humour and body language to convey that not only do we like another person, but that we are eminently likeable ourselves.

It also follows the human tendency to like other people who are like us, people that we see as being in the same image as us.

A jeweller might use humour to build rapport and also find out similarities between you and him/her. They may also mimic your body language so as to make you feel relaxed in their company.

The way to combat this tactic is to note to yourself when you are feeling an unnatural liking for the jeweller. There are just too many different ways of inducing liking in another person to be able to stay aware of all of them, so it is best to realise when one or more of those means has worked, and then do the following.

You must mentally disconnect the diamond from the jeweller. They are not the same thing. Your fiancée will be wearing the diamond, not the jeweller. It is possible to be completely agreeable and polite to the jeweller and then not accept his/her deal and walk away. Stay focused on the diamond and the deal at hand, not on the jeweller themselves.

Authority 

Humans generally take the advice of people in positions of authority,such as doctors, lawyers, policemen and so on. This is because very often these people are highly trained and/or educated and have extensive knowledge which we do not have. Past experience usually bears out that following their advice is of benefit to us.

A jeweller who has completed professional exams in his or her profession will be sure to use these qualifications in his/her marketing and correspondence. If they have a number of years experience in the industry this will also be prominently advertised and proclaimed. This all helps to build their reputation as an
authority; one who should be listened to and whose advice should be followed.

Cialdini offers two pieces of advice when faced by an authority figure, which are actually questions we must ask ourselves. The first is “Is this authority truly an expert?” To ensure that the jeweller is truly an expert  investigate the “impressive” industry qualifications that follow his/her name to make sure that they are  legitimate and also ask to see the jeweller’s certificate of completion.

The second question is “How truthful can we expect the expert to be?” Given that the expert jeweller is trying to get us to comply with his/her request to purchase one of their diamonds, the answer is possibly  "somewhat”. That is why educating yourself about diamonds and their intricacies is so important, so you can make an objective judgement of the quality and realistic value of the diamonds you view.

Scarcity 

Humans tend to assume that anything that is scare is valuable and worth having. Also, the human fear of losing something is much stronger than the potential pleasure of gaining something. This probably goes back to the days when food was a scare resource.

Skilled salespeople will use this tactic against you by proclaiming that the diamond that you have now got your eye on is of a very in demand specification which will probably be gone by the end of the week. They will argue that it would be in your best interests to avoid missing out on the diamond by not delaying the purchase and securing it there and then.

Stores use this tactic effectively by running sales that last for a short period of time. Potential customers are motivated to make a visit to the store and look through the sale contents so as to not miss out on any of the “bargains”.

To stop this tactic being used against you, note the feeling that arises when you are told by the jeweller that “this stone has been viewed by two other couples and I expect it to go very quickly” or whatever story they give you.

The feeling will be one of agitation and high emotion as the pressure mounts to make a quick decision. What you need to recognise is that there will be hundreds of very similar diamonds in the UK that you will be able to purchase in the near future.

So there is no need to rush this particular purchase just to secure the diamond before someone else. Easier said than done perhaps, but just be aware of how your reasoning gets clouded when something appears to be scarce.

Perceptual Contrast technique

This technique, once explained, is quite simple. It is simply a case of asking for something much greater than what you might expect to realistically get. For instance, in the past you may have asked your girlfriend to make you breakfast in bed, knowing full well that this request would get turned down. Your counter would be to then ask for a cup of tea, which is what you knew you might get all along anyway! Because a cup of tea is much less effort than a full fry up she is much more likely to concede you this small favour.

An example of how a jeweller might use this against you is when you are balking at the price he is asking for the particular specification of diamond. He/she then brings out a much larger diamond than what you can afford or have been looking at, for "comparisons sake”. This is especially effective if your girlfriend/fiancée is with you because she then falls head over heels for it, but will be reticent in asking you to make your budget
accommodate it.

Not wanting to disappoint her you swiftly close the deal on the diamond that you were previously looking at.

The best way to stop this being used against you, is to recognise when it is being deployed and then to ask yourself, if the larger request hadn’t been made, would I still have wanted to comply to the smaller request? If you would have anyway then go ahead with the purchase, if not, then politely decline it.