Tim Phillips, Managing Director, Revenade, LLC
It’s a pretty safe bet that at various times in your life, you will have to negotiate – for a business contract, a new car, or even a personal relationship. Obviously, you want to walk away satisfied that you have made the best deal. And you will want the person you are negotiating with to walk away satisfied as well, because a successful negotiation is one in which everyone feels they have gained in some way.
It’s been said many times that children are the world’s best negotiators. They ask for what they want and keep negotiating until they get something. It may not be everything they want, but it’s usually something more than what they currently have, and they are satisfied with it. The parents are also satisfied, for not giving in to the original request.
Once we become adults we often become uncomfortable negotiating, but that doesn’t have to be the case. Keep a few simple rules in mind, and your next negotiation will go a lot smoother.
Rule # 1: Define What You Want
If you don’t know what you want, how can you even go about getting it? Create a strategy of what you want and what you can – and cannot – accept. Set a goal and write it down, and by all means, have the discipline to walk away from a bad deal.
Rule #2: Be Prepared
Don’t wing it. Do your homework to know what the other party needs – not what they want. Research the market value of whatever you are trying to sell or purchase. If you are the buyer, check out other possible suppliers. It may only take two to tango, but you will want to dance with everyone in the room. The Internet has made the research process much easier, and that’s had a big impact on negotiations that involve buying and selling.
Rule #3: Patience Truly is a Virtue
Know the time frame. The world works on deadlines, and that creates dynamic pressure on negotiations. Many people hate negotiations so much, they just want to get it over with. However, the best advice in these situations is just to “take your time.”
Rule #4: Be Aware of the Negotiation Dance
There are stages to every negotiation. Here are the basic steps:
- The Overture. Someone contacts you with a request – to buy, sell, or trade. That’s the time you decide what you want and design your strategy.
- The Initial Offer. Never make, and never accept, the first offer. The latter is true even if the offer is what you want. Your negotiating partner will leave feeling he or she should have offered less.
- The Counter Offer. Make your counter offer as wildly extravagant as possible. That will make your negotiating partner feel he or she has made a good deal when the process is complete.
Rule #5: Don’t Negotiate with Bullies
There is a difference between negotiation and coercion. Learn to recognize a negotiation bully and, of course, avoid becoming one yourself. A negotiation bully will try to take advantage of what he or she perceives as their opponent’s weak position or treat negotiation as an all or nothing proposition. Negotiation bullies make negotiating so unpleasant you never want to deal with them again.
Rule #6: Absolutely Avoid Absolutes
The Never Do’s to avoid:
- Never use “take it or leave it” or “that’s my final offer.”
- Never fall prey to a 50-50, “let’s split the difference,” compromise. It’s probably a really bad deal.
- Never say “never.”
The Always Do’s to remember:
- Get all offers, including the first offer, in writing.
- Test options to get the other person to expose his or her position without making a formal commitment.
- Use the magic word: “Perhaps.”
Dealing with the Indecisive Negotiator
It’s very possible that in your career you will encounter someone who cannot – or will not – make a decision. There may be many reasons. They may need to get approval from someone else, or they may just be shopping around or testing the waters. You can recognize this person by the comments they make, which usually consist of some variation on “Very interesting. I need to think about this.”
What should you do? The idea is to get some kind of closure; being left in limbo is worse than a “no.” Here are two possible responses:
- “When I hear you say that, I think it’s a polite way to say you don’t want to make this decision. And that means I haven’t done a thorough job of providing you with enough information. What else do you need to know to have confidence in making this decision today?”
- “I think you’re pre-positioning a ‘no.’ Just tell me that, and we’ll part friends.”
About the Author
Tim Phillips is Managing Director of Revenade, LLC, one of a select group of firms nationwide that offer full life cycle sales services for emerging businesses – helping them scale up, hire employees and increase profitable, long-term revenue.