Today, I decided to go a bit off topic from technology to talk about a fundamental dynamic in business – the constant give and talk known as negotiation. You may not realize it, but you are always negotiating; Vendors, customers, employees – they want something from you and you want something in return. I wanted to leave you with some things for consideration as you negotiate in the future that hopefully equates to a win-win for the parties of the negotiation and helps maximize your satisfaction of the outcome.
State needs, priorities at outset of negotiation.
Make it clear to the other party what it is that is important to you and not only what it is important, but why it is important. It is important to understand their needs and wants too – so ask good probing questions. Stating needs and priorities will maximize the value of the discussion and create a more personal relationship. You will be able to harvest common goals and determine concessions or strategic moves to make later in the discussion.
Know your BATNA. Be willing to walk away.
Know your best alternative to a negotiated agreement (BATNA). If you are like me, you negotiated feeling you had little room to take what was offered. You may end of frustrated, resentful and at least unsatisfied that you left something on the table that you really needed. Always prepare an alternative of some type and if it is a compelling point. Empirical evidence by researchers prove that those with a BATNA typically have better outcomes. Moreover, you may find it appropriate to share your BATNA with the other party – albeit in a subtle, nonconfrontational way. Empirical evidence and research shows that those with a BATNA have better outcomes and letting the other party know your BATNA (and vice-versa) results in better outcomes.
Consider benefits of intangibles.
A negotiation begins with a opening offer of some point. Counteroffers come and concessions are made – this is the essence of negotiation. Your concession does not always have to be of monetary value. Write down a list of your potential needs and potential counteroffers – both tangible and intangible. It is easier to make a concession that is of intangible value that maybe appealing to the other party. Knowing their needs and understanding your capabilities can give them something for nothing and give you a leg-up to request a concession in return – perhaps something of tangible value!
Never make an ultimatum – cultivate alternatives.
The focus of my business is partnerships – not just a provider or consumer. I want to be a stakeholder of my clients businesses and want to see them succeed and want trusted successful vendors/suppliers too. Hopefully you and I share that opinion and if so, a ‘take it or leave it approach’ will close the door on future opportunities with that party. That’s why I suggest to conjure up alternatives if there are disagreements. Again, the essence of negotation is give and take, so give yourself wiggle room in your offers to provide alternatives you can live with and demonstrate your willingnes to come to an agreement.
When you make a demand in negotiation, justify it. Don’t be vague.
I sometimes hear ‘I can get this faster/better/cheaper’ and things of that effect. If you want something in particular, be prepared to do some research and articulate your demand. You should expect the other party to do the same. There are non-confrontational ways to probe and ask how they came to that conclusion and even ask for the source so you can educate yourself too. Chances are that they are misinformed, don’t have all the facts or you may be humbled to correct your understanding and take a new factual position. Facts speak for themselves, so know the source of the facts. Hopefully this mind set prepares you to do your research and articulate your demand clearly.
Get it in Writing. Be suspicious if they won’t.
Perhaps it still works this way in some places, but a ‘gentlemen’s agreement’ or a deal on a handshake won’t necessarily generate the outcome you hope to achieve. We all process verbal messages differently and dissonance is created when the expectations are not aligned. Whatever your agreement, get it in writing. If you have the opportunity, be the party to offer the agreement in writing – this gives you a chance to put a bend on how you perceive what you both want. Be wary of those that don’t take this step or say things like ‘don’t you trust me?’ – because at the end of the day it is your word against theirs and this creates unnecessary frustration and suboptimal outcomes. (key point: Always consider facts – explore the origin of the facts provided.)
Value what you are giving up as a concession later
In a negotiation, there may be several elements at stake to give and take. However subtle, be it tangible or intangible, write down your concessions. Consider this: Even if you ask for something in the negotiation and they won’t budge – this has become leverage for you later. You can say ’since you didn’t concede on x, I am going to ask for this on y.
If a topic deadlocks or becomes lengthy, agree to come back to it later – keep things moving.
To somewhat build on the last point, there may be a big gap in what you want and what they want on a particular topic in the negotiation. Don’t rathole the entire conversation on one topic. You are better off to suggest to come back to that point later to keep a good flow of conversation. Continuing to remain gridlocked on a particular point can set a negative tone to the rest of the negotiation and calling out the need to move on and come back later can help assure that cool heads prevail and the discussion remains positive. In fact, circling back on a stuck point later may have given both parties time to rethink their position on that topic and a positive mood and acceptable results on other topics will make things easier.
Keep control of the circumstance and negotiation. Don’t get channeled into negativity or be taken off track.
Yet again, focusing on the previous point, be aware of the over all mood and pace of the conversation. We all know negotiations can become heated, tempers flare and sometimes attacks and jabs may come, but consider not returning the favor. Maintaining a controlled and calm demeanor will prove your resolve with the other party and demonstrate they cannot use emotion alone for you to concede. There are negotiators that use this tactic to get what they want, or perhaps they just have a vulnerable temper for which negotiation is not their strength. Take the upper hand and simply ignore this tactic, call it for what it is, but never reply in kind. Continue to move the conversation forward, even if that means suggesting a temporary break. Focus on your goal and maintain conduct – if you cannot bring down the hostilities, you may even consider breaking off the negotiation and going with your BATNA (best alternative to a negotiated agreement).
Know when to stop talking and listen more.
Are you the talkative type? Negotiation experts suggest that the more information you provide, the more leverage you give to the other party. I am not suggesting you don’t engage in conversation, but consider what you are giving up and how that can be used to their advantage. Let’s say hypothetically for a moment that you are selling widgets. You had a deal to sell these widgets on the market for $2/each for a $20,000 order. Your costs is $1/each. For whatever reason the buyer backed out and the deal fell through. Great. Now you have inventory on the shelf tying up precious capital. As luck would have it, a new buyer calls in and they need a rush order of a similar quantity. You answer the call and say ‘Great! As luck would have it, I have the quantity you need in stock because another deal fell through and I sell at $2/each’. Does the new buyer really need to know that you another order fall through? Sensing your desperation or sense to get this inventory of your shelves, this could potentially give your new buyer strong leverage to get a reduced price and cut into your margins. By listening more to their needs and talking less, there could have been another scenario that has an upside. By listening to the new buyer, you may come to find out they are willing to pay up to $2.50/each and a modest rush fee if you can ship ASAP. See how different the outcome could be? This scenario may not speak to you per se, but hope you see the point of listening and providing only the information that is really relevant to what the othe r party needs and wants.
Lies and Secrets always become uncovered
I am sure you are smart enough to ask probing questions so the other party doesn’t ‘pull the wool over your eyes’, but listen to your instinct and determine of the other party is lying or being overtly secretive. Be wary of subtle and white lies because this can lead you to discover inconsistencies in other parts of the negotiation that can make your BATNA more attractive.
To that end, be ethical and honest yourself. Overt secrecy, nondisclosure or misrepresentation of any type can be considered reckless disregard for the truth. Be objective, be factual, be honest. Bluffing (insincere threats or promises), bloated or lowball offers, corruption, bribery or other insincere acts will be uncovered in time. This damages credibility, brand, reputation and future deals – particularly if you work in an industry where people know one another and their dealings quite well.
Be aware of this old saying -
- “Oh what a tangled web we weave,
When first we practice to deceive!
- Sir Walter Scott
Scottish author & novelist (1771 – 1832)”
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Be aware of this old saying -
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