In business, negotiation is a very important skill. You negotiate practically every day! From getting better wholesale deals to giving a pay rise. We are surrounded by negotiation. Negotiation leads to improvement and progress so it is important that you know HOW to negotiate effectively! Here are some tips from my experience as a city lawyer!
- Do your homework – You know that saying fail to prepare, prepare to fail, that basically sums up negotiation. You cannot just turn up and blurt out what you want. You need to know a) who you are going up against and b) what they want. This is the only way that you can determine a best case (your dream outcome)/worst case (your bottom line) position for yourself. Study your opposition’s motivations, obstacles and goals. Research them and ASK questions in the negotiation, ask and listen and think about how you can manipulate that information to get what you want. FOR EXAMPLE, Bob is negotiating better wholesale prices from his fish supplier for his restaurant. Dave, the supplier, cares about getting rid of his entire catch of the day on the same day. Bob knows this having done his homework and so agrees a 30% discount on prices if Bob buys the remainder of the catch of the day at the end of the day.
- Don’t be afraid to ask for what you want – If you don’t ask you don’t get, simple. That’s not to say that your requests should be outrageous. They should be considered requests based on doing your homework above. Start by listing what you want from the negotiation and why. For example, following on from our example above, Bob may have listed that he wants cheaper prices for the fish that he buys so that he can offer cheaper prices to customers and attract more business. Dave may have listed the fact that he no longer wants to have to chuck away leftover stock at the end of each day. When an opportunity arises to discuss anything on your list of wants, leap in and talk about it. The trick is to always go in with your best position; start with your hopes and dreams then work down to your bottom line (but this is still better than where you are).
- Persuade them – So following on from the above, you have your list of wants but how can you get the other side to buy in to them. You present them as a solution or a benefit. Think of everything you want out of the negotiation and how it can actually help the other side. Having done your homework, you should always try to present your wants in the best possible light, not as things that the other side is giving away but as things that HELP them. HOWEVER this will not always be possible. Some things you want are just things you want BUT you can attach them to other potential benefits for the other side. For example, Bob might decide that he doesn’t need all types of fish in Dave’s catch of the day. He may only need Cod and Plaice so that’s what he bargains for. Dave is annoyed because ideally he wants a guaranteed buyer for all of the remainder of the catch of the day. Dave is losing out with this proposition. He may have a catch of the day that is all Cod or that is Cod, Haddock and Mackerel, he still faces wasting produce and losing money. Bob addresses this concern by saying “hey, you’re still getting a guaranteed buyer for Cod and Plaice which you catch REGULARLY.“
- Don’t be in a hurry – The reality is that some negotiations take longer than others. Some issues are more complex. Some concerns affect more than the parties negotiating. If you face such a negotiation, you won’t get anywhere rushing the process. You have to go in at a realistic pace. Rome wasn’t built in a day and a sensitive negotiation can’t be agreed in a day. If you push too hard you could chase the other side away leaving you at square one. It is ok and a smart move to suggest “some time to think about it“. This shows the other side that you really want THEM to consider YOUR WANTS because you are serious or that YOU really want to consider THEIR WANTS because you are serious. You can suggest a night, a couple of days or even a week to “think about it“. The amount of time will depend on the issues being negotiated.
- Keep your cool – DO NOT under any circumstances rise to negativity from the other side. Keep your cool! It will intimidate them. If you’re met with a stone wall or ridiculous counter arguments, take a minute and think about what the other side is saying. Then make them defend themselves. Ask them WHY they take a position. What’s their rationale? In most cases they can’t do this and hey presto, you’ve shifted the balance of power in making them realise that they can’t defend their ridiculous idea. In exposing the fact that they cannot actually defend their position, you then have the opportunity to launch into what you want, eloquently explaining your rationale and persuading the other side as to why they should agree.
- Stay flexible – Do not LIMIT yourself to a single strategy. You should have done your homework so well that you give yourself different ways to get to a solution. If you are met with heavy resistance to one option, build in the next and work on that. If the other party makes a demand, ask them to explain the reasoning behind that demand then brainstorm. Think – how can I get there another way?
Ultimately the worst negotiators are those who never move from their best case or shout down the other side instead of listening. Just remember that negotiation should lead to progress, negotiation is successful when a compromise is reached. HOWEVER there will be circumstances where it just won’t work, the parties interests are just not aligned. This is when you 7. WALK AWAY. Never ever force it. Good negotiators know when to cut their losses and walk away. In my opinion such negotiators have still won as they have been able to definitively rule out a business relationship thus freeing them to focus on another.
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