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Five Tips For Successful Negotiation
What would happen if you ended up winning every negotiation that you entered? What would that do to your revenue, your margins, and your own personal income?
Here are five steps to consider before you enter your next negotiation:
- Clarify your outcome from your negotiation. Get specific. Write out two possible desired outcomes, the highest desired outcome and the lowest acceptable outcome, and start with the high. Start with your high number because you just might get it. Furthermore, your lowest acceptable outcome seems much more appealing when contrasted with the first number that you go in with.
- Find out what the other party desires from the negotiation and focus in on it like a laser beam. Is it a lower price or a higher value? Better terms or a lower percentage rate? The more information you have about the other person and what is in their best interests, the better. Ask them this: ďWhat sort of arrangement did you finalize when you dealt with someone like me in the past? What is important to you?Ē That way, you can find out what the components of services were offered, the terms, the percentage rates, and all of the other details that can give you critical information about what is really important to that other party.
- Clarify all of the components of what you offer, and break it down in a menu list. This could include terms of payment, percentage rates, your core product or services, and extra value-added services. Rank each of these variables into three separate categories, A, B and C. Aís are the necessities that you must receive from the negotiation to make it worth your while. Bís are valuable items which can be traded but you can live without. And Cís are those items of lesser value that can be easily traded for other items from your opponent.
- Anytime you make a concession, always ask your negotiating prospect to make a concession as well and to trade something. There are two reasons you do this: first, you are actually getting something of value for your concession. And second, it shows your negotiating prospect that you deem your services worthwhile and arenít 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 prospectís CEO. If you discount the rate, ask them to speed up the payments. In other words, use the principle of reciprocity to your advantage. We are socially conditioned to reciprocate when someone does a favor or makes a concession for us. If you donít ask and if you donít take advantage of this principle each time you make a concession, you are leaving money on the table.
- If your negotiation comes to a standstill, say this: ďJoe, it seems that we are at an impasse. I wanted to ask you to at least agree with me on this: letís agree to talk as long as it takes for us to work up a mutual satisfaction of needs. Iím confident we can come up with something that we both feel good about, I just need your commitment on this as well.Ē You are building a relationship and are aligning yourself with your negotiating prospect in a mutual goal, which also builds rapport, leading to trust. You have increased the confidence level your opponent has with you, and you are one step closer to finding a solution that will benefit the both of you. And you have their commitment to continue the discussion.
Remember that a negotiation is not a competition as much as it is a partnership seeking a solution. It is a meeting of the minds to discover a mutual satisfaction of needs. Successful business people see their business as a partnership in creating a contribution to others. By seeking to make a value contribution to your prospect and using these tactics, you will win your negotiations every time and have them thank you for it.
- Scott Love
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Copyright © 2011 Scott Love