Regardless on the type of business you are involved with, negotiation is something we are engaged in on a day-to-day basis. We negotiate with customers, staff, suppliers, partners, family and friends.
So if negotiation is such an important part of our lives, how do we do it better? All too often negotiation is seen as a ‘I win, you lose’ scenario, but truly successful negotiations are about alliance, not conflict. Much more can be achieved in a collaborative manner that will result in long lasting and rewarding relationships. Here are a few simple steps to help you become a more successful negotiator.
- Be Prepared – Make sure you are clear in advance about what outcome you want to achieve. As much as possible, study the other party’s goals and understand what they want from the transaction. This might be generic as in retail sales or it might be specific in more consultative or relationship based sales. Whatever, you need to decide in advance what you’re prepared to offer and when you’ll walk away.
- Take the ‘first mover advantage’ – Research by the Michigan School of Business indicates that making the first move generally results in a higher agreed price. Some people worry that by making the first offer they may be ‘leaving money on the table’ if the buyer is prepared to offer more, but you should have enough information to make a solid first offer. If you don’t, go back to Step 1.
Making the first offer puts you in a strong position to control and anchor the negotiations.
- Listen Effectively – An old adage in sales states ‘you have 2 ears and one mouth, use them in that proportion’. If you do not practice active listening in negotiation you may miss a key issue that will help you reach a favourable result. To negotiate successfully you need to understand the other person’s objective and listening to their position may help you reach a more attractive position for both parties.
- Give Credit – If you are in the negotiation for the glory of winning, you will fail more than you succeed. Successful negotiators encourage discussion, put ideas ‘out there’ for others to expand on and praise involvement in the discussion even if they came up with the ideas themselves.
- Compromise – If you enter a negotiation with fixed ideas and a ‘winner takes all’ position, you are likely to not reach an agreement or reach an agreement where one party feels like they have lost. Neither situation is ideal. In Step 1 you should have prepared alternate offers or requirements to allow you to address any proposition from the opposite party and allow you tp reach agreement, or know when to walk away. Remember, in a successful agreement both parties should feel as though they have achieved a desirable outcome. In business this will lead to referrals and more business.
- Close or Recap – Know when you’ve ‘done the deal’. Don’t get greedy and push the other party away. Recognise when you have achieved what you set out to achieve (again, see Step 1) and take the deal.
If the negotiation is ongoing, at the end of the session list all points covered; the agreements reached, the points that need further discussion and the actions to be addressed before the next meeting. And make sure you set a time for the next meeting and make yourself available to address any questions the other party may have post-meeting.
Whether negotiation for business or in our personal lives, with internal or external stakeholders; we could drastically improve our lives if we just adopted these simple steps.
Go ahead and try it – you might be surprised how good a ‘win/win’ situation feels and the benefits it can deliver.