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Win Every Negotiation
Imagine winning every negotiation that you entered. What would that do to your revenue, your margins, and your own personal income?
Consider these five steps before you enter your next negotiation:
- Get specific on what you want from your negotiation. Clarify the outcomes. Write down possible outcomes that are the most beneficial and the lowest acceptable result from your negotiation, and target the high. Start with your high number because you just could get it. And if you donít get the high number, at least anything below it but still higher than your lowest acceptable result still seems appealing when contrasted with the high range that you go in with.
- Find out what is important to the other party and focus on helping them get that. Is it a higher value or a lower price? A lower percentage rate or better terms? The more information you have about the other party and what is in their best interests, the more you know what motivates them and how to structure the deal. Ask them questions like this: "What sort of arrangements did you finalize when you worked with someone like me in the past? What is important to you in this transaction?" That way, you can learn about the components of services that were offered, the terms, the percentage rates, and all of the other details that can give you a clue to what is really important to that other party.
- Clarify all of the items of what you offer, and break it down in a menu list. Do this before you enter the negotiation with your colleagues. This could include terms of payment, pricing issues, percentage rates, your core product or services, and extra value-added services. Rank each of these items into three separate categories, A, B and C. A's are the requisites that you must get from the negotiation to make it worth your while. B's are items which have value but be traded because you can live without them. And C's are those items of much lesser value that can be easily traded for other items from the other side.
- Anytime you make a concession, understand that you must always ask your negotiating prospect to make a concession as well and to trade something. There are two reasons why it is important that you do this: first, you are actually getting something of value for your concession. In our society, we are socially conditioned to reciprocate when someone makes a concession or does a favor for us. You can use the principle of reciprocity to your advantage. And second, it shows your negotiating prospect that you deem your services worthwhile and aren't just going to offer a discount. If you drop the price, ask for referrals. When you spread out the terms, ask for an introduction to your prospect's CEO. If you discount the rate, ask them to speed up the payments. When you do this, you are showing them that you respect yourself and when you start doing this, they will comply and respect you as well. If you don't ask for something when you make a concession and if you don't take advantage of this principle, you are leaving money on the table.
- If your negotiation comes to an impasse, say this: "Joe, it seems that we are at an standstill. I wanted to ask you to at least agree with me on one item: let's just agree to talk as long as it takes for us to work up to a mutual satisfaction of needs. I'm confident that we can come up with something beneficial for both of us, I just need to have your commitment on this as well." You are now building a collaborative relationship and are aligning yourself with your negotiating prospect in a mutual goal, which also builds rapport, leading to trust. You have now built confidence and you are one step closer to finding a mutually satisfying solution. And you have their commitment to continue the negotiation.
Remember that a negotiation is not a contest as much as it is a partnership seeking a resolution. It is a partnership to discover a mutual satisfaction of needs. Successful business people always view their business as a means to create a contribution to others. By using these tactics and having the intention of creating a value contribution to your prospect, you will win your negotiations every time and they will thank you for it.
Copyright © 2004 Scott T. Love
Scott Love improves the leadership and sales performance of companies and does it in a way that is fun and easy. He is an author, consultant, and professional speaker. To book him for your next corporate, franchise, or association meeting, call him at 828-225-7700 to check his availability.