If you are in business, you Negotiate!
You negotiate with your partners, employees, auditors, vendors, bankers, competitors, lawyers.
Every person you meet in business will negotiate with you for a better deal; and you do the same with them.
Even in personal life, you are always negotiating. Here are a few examples.
- Your wife wants to go to the Chinese place for dinner, while you negotiate to order in pizza.
- Your kid wants the new toy thats coming out for Christmas; and you want him to finish studying his multiplication tables to get it.
- Your parents want you to come home for Christmas, while you want to spend the holidays in Hawaii.
Whenever we deal with people, we are negotiating for something or the other. So, here are a few tips to keep in mind when you are preparing for negotiations as well as during negotiations. These will enable you to have better odds of getting more out of your negotiations.
How you fare in negotiations will depend on your level of preparedness.
1) Do your homework and learn about as many aspects of the expected negotiation and the negotiators, if possible.
2) Who are you dealing with?
3) What are his strengths/weaknesses?
3) Is he the final decision maker?
4) What is the least he is willing to accept to give me what I want?
5) What does he know of my strengths/weaknesses?
6) Is he a straightshooter or is he known to hide things?
7) Is he passionate about this subject matter and know a lot or is he susceptible to bluff?
8) Is there something you can do for him as a favor, which will bear upon the outcome of this negotiation?
9) What are the accepted standards in this country, industry or culture?
10) What alternatives would he be willing to accept if not the best option for him?
The Negotiation Setting.
1) What date and time are you going to meet this person to negotiate with? Is it set to your advantage or disadvantage?
I’ve heard of a business tycoon flying in his competition and going into meetings with them right when they are too tired by the long flight to think straight. At the same time, you need to have your head on straight. You should not be distracted by other problems in your business.
2) Where are you going to hold the negotiation?
– You have a home advantage if its at your office. Usually for negotiations where a lot is at stake, people use a neutral venue.
3) Who are the people who will appear on your side?
– A show of force may be a big factor in the negotiations. A lawyer on your team will make it look like you have the law on your side.
4) People who appear taller, better looking, in better health, have a natural advantage and have a better chance of gaining more ground in a negotiation.
-Remember the tale about keeping the visitor’s chair shorter than yours so you appear taller?
5) A smaller table in a small room is much better than a big table with empty chairs in a big room. A small room makes everything less formal and hence its easier to arrive at a meeting point.
6) If the negotiation is between two people, sit at the corner of the table so you are next to each other, instead of being at opposite sides of the table.
7) If you want it to be a friendly negotiation, choose a less formal venue such as a quiet restaurant.
8) As you arrive, take off your coat and hang it behind your seat. This makes you look vulnerable, and puts the opponent at ease.
9) Keep your hands on the table at all times to show that you have no hidden agenda. Hidden hands make people uneasy.
10)Nowadays, a lot of negotiations take place over the Internet or other telecommunications media. I believe this is ok when you already know the person you are negotiating with and you have previous experience of negotiating with that person. If its a new party you are involved with, its best to meet them face to face for your first negotiation. Nothing beats a hand shake during a meeting. Also, its rather difficult to pick up subtle nonverbal cues when you are across a televison screen.
Deep Janardhanan is the founder and Chief Creative Officer at Noble River Ventures; a full service marketing firm in Richmond,Virginia. He works with small businesses in the Richmond area advising them on marketing strategy and tactics. He also helps his clients with business negotiations. Noble River helps business with Website Design and Development, Social Media Marketing, Strategic Partnerships, Lead Generation and Conversion as well as Web & Print Copywriting.
During the Negotiation
1) Make a big first offer, one that you are pretty sure will be rejected. But this has the psychological effect of having set the anchor point or a reference point. Every subsequent offer your receive will be based on this first offer.
2) Make an aggressive counter offer. When you receive an offer, even if it was more than what you were expecting, make sure you ask for more.Its only expected.
3) Dont show your hand. Seek the most concessions while trying to give away only what you know are small concessions on your end, but may appear to be much bigger.
4) Ask lots of questions. Try to understand the basic driving forces behind his requests or offers. Encourage him to talk about his business and what has been going on lately.
5) Ask about why he chose to do business with you/ your company. The more he answers, the more he talks, the stronger your position in the negotiation.
6) I once met a professional mediator whose background was Broadway. He had perfected the art of looking distressed or elated at a moment’s notice. His negotiating skills were very highly valued since he could sway the direction of the negotiation merely by raising or dropping his voice suddenly with a look of disillusionment. You may want to practice this in front of the mirror.
7) Nod a lot when he is talking. This gives the impression that you are agreeing with him.
8) Follow his body signals(non-verbal cues). Hands folded may mean he is disagreeing or also that he is cold.
9) Ask him if he is comfortable. This will make you look like you have his best interests in mind too.
10) Get clarifications on the offer. Rephrase it in your own words, so there is no ambiguity.
11) While you rephrase it, break his offer up into multiple pieces and enumerate each one. This will give you multiple points for demanding concessions.
12) If you are feeling pressured to accept, retreat. Its okay to take a break, and then regroup for more discussion.
13) Avoid distractions during the negotiations. Switch your phone off, ask your secretary to hold all calls. You dont want to lose out just because you spoke to your gym coach during a negotiation.
I agree this article was longer than most but I am putting it all together so that it can be most helpful.