Do you recall the last time you negotiated and what the outcome was? I am sure you thought of a moment of confrontation with someone. When you hear the word negotiation, you subconsciously start to think of competition between you and the second party. However, that’s not the case! Negotiation is reaching an agreement that is moderately satisfactory for both parties.
How does that work?
Good question! How does that work? I mean, I want this deal but the other party is definitely not agreeing with anything I am proposing! There are three forms of negotiation, Hard (Aggressive), Soft (Passive) and Principled (Assertive). Aggressive is when you shout, yell, confront, make the other person look bad and do anything to get the deal. Passive, you yield, and come off a bit unconfident. Best practiced is Assertive, you focus on interest and not the position.
Assertive negotiation creates a Win-Win situation for both parties. To create a Win-Win situation you need to define the purpose of the negotiation. Why do you need the negotiation? What purpose will it solve? After we have an answer, let’s assess if our proposal is realistic. Remember you don’t want the proposal to be turned down! Then comes thorough research on the topic of proposal and the party we are negotiating with. Trust me, you are only calling for failure if you are not confident! The only way to gain confidence is by acquiring knowledge about your product and the client! Yes, I know I say this way too often but one more time, PRACTICE! Run through the negotiation points, presentation, slides, speech, numerous times. Now don’t get the wrong idea, you are not there to prove the other side wrong or look desperate for the deal but practicing will boost your confidence and give you an edge when negotiating.
Know what your clients interests are and what they want out of the deal. Always do a Scenario analysis and figure out alternative plans for the proposal. This way if the second party counter offers you are not sitting there blank. Don’t read off the paper! Emphasis on confidence is major! If you are not assertive then you are giving the other party leverage. Keep a poker face, which means even if you are franticly in need of the deal, don’t show it! Be honest about the information you provide and be yourself.
FACT: UK businesses lose estimated $9 million per hour due to poor negotiation
Communication! The most important out of all the information shared; you need to be a good communicator to be a good negotiator. Practice and learn this skill, it’s needed in leadership, business and in your day to day life. You need to focus on pitch and tone of voice, speech, body language and most and foremost be a good listener. In negotiation, no foul words please! Don’t let the emotions get the best of you when things are not going your way. Remember, who ever gets angry first loses as the other person has leverage. Be calm and patient, listen and show respect. How you dress at the meeting has a lot to do with communication as well. It tells the second party how serious you are about the proposal.
You are not competing against the second party, hence you have to compromise. Don’t throw a tantrum, you won’t always get everything. Negotiation is neutralizing conflict, resolving and ensuring mutual gains. Don’t be in a hurry to close the deal. Show patience and buy time from the second party. Inaction, as in buying time will give you more time to think of an alternative counter offer.
The method of negotiating as follows:
Rapport – Share good vibes! Build a relationship. In business, you are negotiating a deal not just for one time gain but for a prospect client!
Analysis – Understand/Research your product and the second parties interest
Debate – The main part of negotiation is the discussion. Stay calm and composed. Don’t assume, the clients can’t read your mind. Be clear about the proposal.
Propose – Propose the best idea to reach the best possible conclusion
Close – Closing the deal. Contracts to be carried out in presence of both parties.
There are many types of negotiations: Day to Day negotiation: flow of work, the negotiation we have with ourselves, our family, our friends, our dogs. Negotiation with a superior, team, Commercial Negotiation, Legal Negotiation. The negotiating conditions of sale, lease, service delivery, etc. Hence sometimes negotiation can get complicated. A lot of businesses use third parties for instance, Lawyers, subcontractors, project managers, etc. as negotiators for deals. This way they remain positive in front of the client.