“Have more than thou showest,
Speak less than thou knowest.”
William Shakespeare
The ability to negotiate effectively is an invaluable skill that you can use in all facets of your life. Negotiating skills are a potent potion – they will save you time and money, bring you influence and success, reduce stress and make friends.
The best news yet is that you can improve your skills as a negotiator with little effort and no cost. First, recognize that life in general, and business management in particular, is a never ending series of negotiations. Constantly be prepared to negotiate. Once you have recognized that you are negotiating, remember a few key points. They are all simple, common sense logic, but in the rush of our daily lives or amidst the heat of debate, our emotions and impulses often get the better of us.
Be prepared. Planning is crucial to effective negotiation. You won’t always have the time to plan because some negotiating situations occur more spontaneously than others. However, you should be able to anticipate and at a minimum not be caught off guard. If you are, develop a strategy for delay that will give you the opportunity to collect your thoughts.
Knowledge is power. Leave no stone unturned that might uncover a piece of helpful information. Do not confirm or offer new information that may be of use to the other party. When they increase their knowledge base, the knowledge differential changes to your detriment. Recognize that others are always holding back some information.
Ask questions. We are all conditioned to answer and often say more than we should. Answer questions with questions. Be as brief as possible.
Always enter negotiations with a pre-established objective and a bottom line position. Make sure that those positions are reduced to writing for important or lengthy negotiations. This will help to protect you from having the negotiations themselves alter your goals. All too often I have seen groups enter negotiations with generalized objectives. “As much as we can” is a certain prescription for less than optimum results.
Under no circumstances disclose your objective or your bottom line position. As you strive to increase your knowledge base, place a high priority on determining the other parties objective and their bottom line position.
Negotiation is more than just dealing with numbers. They are just one piece of the puzzle. Let others mention numbers first. Generally speaking, those who first mention numbers lose.
Get others to mention numbers first by asking hypothetical questions. “What would you say if…”. “Suppose that….”. When asked for numbers, answer with examples and stories. “The last time I was in a situation like this….” “I know a guy that only paid…..” Never use round numbers. They lack credibility and invite a counter offer. An offer of $9,600 is more effective than say $10,000.
Choose the right environment in which to negotiate. If you need an extension from one of your suppliers that is owned by a partnership, make sure that you carefully consider which partner you approach, when and where you do it. It may not be wise to approach them at the end of the month when they are watching their cash balance and trying to meet a payroll. It may be quite effective to bring it up while they are soliciting your next order. Always consider the who, what, where and when.
Don’t be afraid to acknowledge the other parties position. “I understand and agree but…” That but is very important. Make your concessions slowly. Make sure that they are seen as concessions. Regardless of how easy they are to give, make sure that you get some mileage out of each one.
Use silence to your advantage. Silence is a powerful tool. Just prior to an important negotiation, I was reminded by a respected advisor to remain silent after the other party made their offer. Their initial offer was in excess of my objective. I was elated but I remained silent. I looked at them as if if there was more to come for what seemed to be an eternity. They eventually spoke. That eternity might have been just seconds or minutes, I’m still not sure. But it did set the stage for negotiations that increased their already satisfactory offer by over 30%.
Don’t raise side issues that will create controversy. Resist the temptation to get something off your chest that will only antagonize the other party.
The objective of negotiation is to reach a mutually advantageous deal. Your primary objective is to win, but try to make it a win-win as opposed to a win and walk. Always declare the other party the winner.
Because it’s your business, remember that a manger is constantly negotiating. Recognize these situations, control your impulses and use these common sense reminders to your advantage.