| Every time we are in a discussion with another person, it is likely we are in some sort of negotiation. Negotiating in business most often gets us things we want that belong to someone else.|
The better we are at negotiating, the more likely we are to get what we want. Remember, the best negotiations are about both parties feeling satisfied with a win-win outcome. That's important.
With that goal in mind, the first thing we have to realize is that there are many issues involved in important negotiations. Too often, we fail to look beyond cost. When cost becomes king in a negotiation, there has to be a winner and a loser. When value, rather than cost, is the key issue, all parties can be winners.
Understand that other parties may not want the same things as we do in the same circumstances. This is a Catch-22 that causes us to negotiate strictly from our perspective, ignoring the really important issues to the other party or parties.
Seven Points to Keep in Mind during Active Negotiating:
1. Resolve the easiest issues first to build on success before getting into more touchy issues
2. Assert your needs while emphasizing issues already resolved
3. Know the value to both sides of any concession
4. Concede slowly and know the value of what you are giving up
5. Get something in return for your concession
6. When challenges come, remember the goal and work through them
7. React to anger constructively by side-stepping an attack with more productive suggestions, such as stressing the need to reach win-win solutions
Remember, win-win doesn’t mean giving up your power in your negotiations. Negotiating guru, Roger Dawson says, “Power negotiating is the highest and best use of your time, a double-insulating profit protector. Power negotiating not only lets you drive profitable bargains, but also protects you from incurring unnecessary cost. You just can’t make money faster than when you are negotiating well. A negotiated dollar is a bottom line dollar.”
In business, you only get what you are able to negotiate. Test negotiating profitability on a case by case basis. Subtract the original cost from negotiated cost and divide that by the number of hours spent negotiating to calculate an hourly rate. For example, a piece of equipment has an original cost of $20,000. You pay $17,900 after negotiating 1-1/2 hours, saving $2,100 or $1,400 per hour.
Victorious negotiators who get what they want time and again enter the negotiations with a solid armor of knowledge. They begin negotiations as soldiers in a civilized competition, mentally and physically postured to win. With a soldier’s mindset, they guard against getting outmaneuvered. As soft on people as they may appear to behave, they maintain the soldier’s hard resolve on the important issues, matching mission with strategy to come out victorious.
Here is what the negotiating soldier learns in basic training:
1. There are Three Stages of Every Negotiation—The Ready Stage where you Establish Criteria. Find out what it is the other side/s want. Converse with them to get them to establish their criteria. Avoid assuming anything. The Aim State where you Exchange Information, Share Information to Establish Positions. Beyond cost, what are the value issues? What will it take for you to get satisfaction? What will it take for other parties to get satisfaction? Compare satisfaction ranges for all parties. Avoid losing objectivity by getting personal or taking issues personally. The Fire Stage where you Reach for Consensus, the optimum victory in any negotiation when all parties leave the negotiation feeling like winners. Again, make your biggest concession initially making smaller and smaller ones as negotiations continue. Give and gain in credible steps that lead to a final offer within your satisfaction level.
2. Remember, the Ready and Aim Stages Come Before the Fire Stage—Premature, cut-to-the-chase mindsets foul up negotiations every time. Impatient negotiators drive blind without a route map or road condition information, two vital elements to get from one place to another. The route map in negotiations is the Ready Stage. Get road conditions in the Aim Stage. Know what issues lie in the way of getting to an acceptable agreement.
3. If the Negotiations Move out of Your Satisfaction Range, Walk Away—If you want something too much to walk away, you stop being a negotiator and become a fish chasing bait. The parties who act like they want the deal the least have the most negotiating power.
Despite the best intentions, deadlocks can occur and halt negotiations that could have continued. If all parties are on opposite sides of an important point, you may save the negotiation by summing up progress, suggesting a break, and/or moving on to other points that are resolvable. This dovetails into the save the most difficult issues for last strategy. The philosophy is, the greater the progress, the more incentive there is for all parties to move the negotiations to a conclusion. Even though you may enter negotiations with the best of intentions, you might find yourself up against down and dirty negotiators. They know dozens of tricks to give you less and get you to give them more. They come with hidden agendas, commonly nibble away at your position and try to sneak in costly concessions even after the negotiations are over. Each one of the tricks below can catch even the best negotiators, especially in high-stake deals. Even if you don’t use the tricks, if you know less than what they know, they will beat you every time.
Roger Dawson’s Thirteen Negotiating Tricks, Dirty & Otherwise–
1. The Flinch – “Always visibly react any time a proposal is made to you.” Counter: “Identify it. 'That was a great flinch. Now what do you really think?'”
2. The Trade-Off – “Always ask for something when someone asks you for something.”
3. The Vice – This negotiating squeeze play replies to a proposal by saying, “I’m sorry, you’ll have to do better than that.” If you are responding in writing, write the words across the bid and send it back. Counter: The Volley Gambit: “Just how much better do we have to do?”
4. The Dollar Anchor/Reverse Bait and Switch – Sellers come in with a high, high price they expect you’ll refuse. Later, they offer a much lower price for just about the same thing. Both prices may be too high, but your memory of the first price can make it seem like a great deal. Counter: Call their bluff and shop the competition before buying.
5. Good Guy/Bad Guy – This old trick gets dressed in creative clothes and still works. The negotiator is a good guy who has to answer to a bad buy who doesn’t want to deal. Counter: Dawson says make the other side feel foolish for using it. “Come on, we aren’t going to play ‘good guy/bad guy’ are we? I am going to attribute everything you say to you.”
6. The Higher Authority – This trick can work to sweat concessions onto the table. Counter: “Appeal to their ego. ‘They usually go along with your recommendations, don’t they?’ Get a commitment. ‘You will recommend my proposal, won’t you?’” 7. The Done Deal – Discount and formally change a written proposal and send a check for the reduced amount. Counter: "Send a light note that basically says it was a good try but we will need the balance to complete the agreement."
8. Piecemeal Costing – “Calculate the difference per hour or per item rather than per job or per year, like insurance people and bankers do.” Counter: Ask what the cost is per job or per year.
9. The Decoy – Divert the other side’s attention from important issues and sidetrack them into decoy issues. Counter: Stay focused on important issues. 10. Devil at 4 O’Clock – “Add to your deal-doing needs an issue you know the other side would never accept and use it as a trade-off to get an important concession.” Counter: Match theirs with your devil at 4 O’clock.
11. Puppy Dog Close – Here, take it home. Bring it back if you don’t want it. Counter: Call them on it, “Come on, this isn’t a puppy dog. I can’t take this back to the pound if it doesn’t work out in the long term.”
12. Take Back the Offer – This trick can be used at any time during the negotiations.
13. The Walk Out – This is a showy emotional blackmail reaction to put fear into the other side that they may have “blown it.” Counter: Keep offering alternatives to prevent the walkout.
Use the Good Will Concession – Always leave the other side feeling like a winner by offering your congratulations at the end of the negotiations. You’ve been negotiating your entire work life and before. Just before you go into an important negotiating session, just take a few minutes to read through this to sharpen your negotiating saw!