10 Steps to Better Negotiation Skills
Posted 02 Oct 2014 Do you know how to negotiate the best possible business deal even if the odds are stacked against you? *“Successful bargaining means looking for positives in every possible circumstance,”* says Margaret NeaLe, professor of organisational behaviour at Stanford University business school.
But, she says, far too often, business negotiators get bogged down, usually over trivial irrelevances, and over 40 per cent of deals fail to meet anyone’s expectations. So how can you improve your chances of getting your own way at the right price? Here are ten steps to better negotiation skills:
- Preparation is vital. When brokering a successful deal you should know exactly what you want before you arrive at the negotiating table. Think hard about what the other side is likely to be looking for. Work out what sweeteners and concessions you can offer as part of a deal.
“Try to think of the negotiating process as a see-saw”, says Professor Neale. “It goes up and down until you reach the point of balance where both parties think they have achieved a good outcome.”
- Talking money. Beforehand, work out a fair price for what you want to buy or sell and what’s most important to you and to the buyer or seller. If you are negotiating on costs or prices decide on your highest and lowest figures and work out fall-back solutions in case your first offers are rejected.
Try to be fair. Getting what you want at someone’s expense means they are unlikely to trust you again and could always renege on the deal.
Plan your strategy, which should go something like this: Identify the issues involved, make an initial demand, build a rapport, bargain for concessions, close the final agreement.
Understanding the negotiation process means asking yourself: “How much do we need this person and how much does this person need us?” You should also understand that the negotiation process is a package, so continue to look for variables. Stay flexible and be prepared to modify your plans at short notice. Make sure your proposals will stress the mutual advantages.
Controlling negotiations is the key to getting what you want. Experts say that whoever takes the notes effectively controls the meeting. Whoever holds the pen, holds the power.
Make a point of stating what you both agree on because the other side will then believe that you understand them, leading to an immediate drop in hostility. A useful controlling tactic is to stay silent until the other person speaks. After eight seconds of silence an opponent starts to become uncomfortable…
The stalking-horse ploy works by letting the other side burn itself out by negotiating with the wrong person. When an agreement is in sight the negotiator admits he has no authority to close the deal and is replaced by a colleague who insists on restarting the bargaining from scratch. Drained and frustrated, the other side are easy meat.
The good guy, bad guy strategy is still one of the most persuasive persuasion ploys. It usually involves having a negotiation team led by someone seemingly intent on making everybody’s life hell. When he is replaced by someone charming and relaxed, the other side as so relieved they will probably agree to almost anything!
The carrot and stick technique exploits the psychological advantage the buyer has over the seller when there are rumours that a rival supplier is offering a better deal. In one recent case the stick was used to beat down the price. Then came the carrot – the offer of a three year contract.
Repeat key statements to help achieve what you want, but avoid worlds like “unfair” and “unreasonable” which can encourage doubts and even aggression.
Know when to stop. When you’ve reached agreement terminate the discussion. Otherwise you might find you’re making more concessions than you bargained for.
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