How to negotiate - Top 10 Tips
Don’t be afraid of negotiation! Negotiation skills can be learnt by anyone and once you’ve tried it, you’ll want to develop and hone this skill in your work and home life.
1. Build rapport - Be warm on the person, tough on the issue – rapport is your secret weapon. I’m not saying to try and be your counterpart’s friend, but do take the time to use their name (this is the favourite word in the world for most of us), understand a little bit about them, find some common ground. It could be a similarity of favourite food, a sports team, authors, bands anything. Be human, and smile – this can be surprisingly disarming!
2. Preparation – I read recently that over 40% of people do not have time plan their negotiations – this is a recipe for disaster, or at best, a sub-optimum outcome. You do need to do some legwork up-front. Think about the very best outcome you think you could achieve, let’s call it the “optimistic outcome”, satisfactory outcome and a minimum outcome. Write these down and talk through with a colleague as this will help reinforce these objectives. Think about what your counterpart might want from the negotiation? Finally, jot down what you think are your strengths and their weaknesses. This will make you feel powerful.
3. Walk away point – this is critical. It’s vitally important to establish in your own mind the red line that you can’t cross…and stick to it in the negotiation. It can be helpful to discuss this with a colleague in advance of the negotiation: this will help cement it in your mind. In the cut and thrust of the negotiation it’s easy to get carried away, so make sure you’re clear on this. If you break this once, you’ll be tempted to break it again. So, never go beyond your walk-away point!
4. BATNA – Your Best Alternative to a Negotiated Agreement. If you can’t reach a negotiated agreement, what’s your plan? You need to have a clear idea on your options should the negotiation fail. This could mean that you have an alternative supplier or customer lined-up, in case of a salary negotiation it could mean an alternative job offer.
5. Ask lots of open questions – who, what, how, when etc. Notice I’ve avoided “why” as this could be interpreted as confrontational. Go beyond understanding what your counterpart wants and seek to understand WHY they want what they want. What are the hidden motivators that might be driving their wants. Think about what you’d like to find out that may give you an advantage in the negotiation. Ideally, these should be prepared in advance.
6. Deploy empathy - put yourself in your counterpart’s shoes, truly understand their position. Listen to what they say. I need to say this twice as it’s so important: listen to what they say! Make your counterpart feel heard. Periodically summarise the position they’ve presented and state it back to them. Get one of your team to focus deeply on what’s being said and observe your counterpart’s body language.
7. Tradables - The best negotiators will come armed at the negotiation with a list of tradables, both things you might want, or things you’re prepared to concede. The more options you have, the better, as this can keep the negotiation moving forward reducing the chance of deadlock. Think creatively on what these might be, they needn’t be price. They could be payment terms, service levels, access to resources, access to key personnel, supplier training courses for your teams or the quality of the lunch when you visit. Anything really.
8. Trading – when you’re trading items on your wish list, always make your tradables conditional, and phrase it as “If you do xxx, then I will do yyy”. For example if you’re selling, “if you give me a 3 year contract, I will offer you a discount of 5%” or “if you change your delivery schedule to once a month, then I will hold safety stock for you”.
9. Opening first or not – the negotiation experts seem to be divided on this, but I think it depends. If you’re buying a commodity for which there is lots of publicly available price data or for which there are lots of competitors selling the same product, I think it’s fine to open, but do so with an ambitious price.
If you’re buying something which is a unique, one-off bespoke item or service, it’s critical not to open first AND BY NO MEANS DISCLOSE YOUR BUDGET. Allow your counterpart to open first – you never know, they may open way below what you had expected to pay. And if they’re opening offer is way above your budget, don’t fall into the trap of “anchoring” on their price – ignore it. In fact, then is the time to make your “counter-anchor”, something incredibly low, and if you’re a buyer, under your optimistic outcome price.
10. Don’t give anything for free – never under any circumstances give something away without getting something in return. There are 2 main reasons for this – your counterpart will smell blood in the water and will ask for further concessions, a bit like your cute but clever dog who hovers around the table even after you’ve already given him a morsel from your plate (giving you that classic look). The second reason is that you could appear untrustworthy. “Why did he ask me for £100 if he’s now happy with £80”.
I suppose there is one exception to this. If you’re early in the relationship, or if you feel the need to build some goodwill, it’s reasonable to offer something of value without getting something in return, but preferably don’t do this in a negotiation situation.
So there you have it, my top 10 negotiation tips, all of which and more you’ll learn on my 1-day negotiation skills course, which is available face-to-face or remotely.
Negotiation is a skill that anyone can learn, it’s fun and can help you get a better deal at work and in normal life. There’s a lot more to learn about negotiation, so if you’re curious and want to know more please get in touch here.
The best days lie ahead
Martin
