Successful negotiation involves mastering several moving parts. Attitude, preparation, solid fundamentals, and knowing how to deal with concessions are the four key elements to being a good negotiator. Let’s look at each.
- You must approach any negotiation with the right mindset. Your objective should be to create a win-win result; both parties need to be satisfied with the result. You should also be prepared to walk away if a win-win agreement cannot be reached.
- Do your research. Information is power. Know as much information about the company you’re negotiating with as well as the individuals involved in the process. Know what’s at stake for both.
- Know your position. What do expect to achieve? What does your ideal outcome look like? What is the worst possible circumstance in which you would agree to do business?
- Use a Meeting Agreement to set the structure for the meeting. Try to establish the ground rules and take charge yourself. Discuss time, mutual objectives, and the possibility that an agreement may not be reached, necessitating dissolution of negotiations if there’s no mutually agreeable outcome.
- Know your concessions and rank them from least important to most important. Attempt to develop a comparable list for the company/person you are negotiating with.
- Ask questions. You control the negotiation by asking questions and listening, not by monopolizing the conversation.
- Don’t argue. An argument will hurt any rapport you might have developed and sow the seeds of failure. Negotiating successfully depends on a collaborative effort to share information, not on trying to prove who is right or wrong.
- Never respond immediately to a request for a concession. Take your time. A pause will add uncertainty for the other party. It will give you more time to consider your response, avoiding a snap judgment that you may regret.
- Never make a concession without asking for one of equal or greater value in return. Unilateral concessions send the wrong message. If you are asked for a concession, you can simply respond, “The only way I could do that is if you could do something for me. I’d need you to ____________. How do you feel about that?”
- Struggle. Never give up a concession without giving the prospect the impression that they’re asking for too much. “A 5% price reduction! That’s going to be a tough one. We don’t have that much room to spare.”
- “Let’s Pretend.” Present a hypothetical situation and ask the prospect what he would do. “Let’s pretend we could agree to that, what would happen then?”
Self-Study Assignment: For your next negotiation, prepare a list of concessions you would be willing to give and another list of concessions you would like to receive. Rank them in order of importance to you and your prospect. Review this list before you start negotiating.