Mastering the Art of Negotiation
Mastering the Art of Negotiation
There are predictable responses you can count on in the negotiating process and effective tactics that good negotiators know how to use and respond to. Before getting into those specifics however, it is important to understand the fundamental principles that govern ALL negotiations and situations of influence.
Negotiation Principles
1. There are three critical factors in every negotiation
a. Power
b. Information
c. Time
Whenever possible plan ahead of time. The most important phase of negotiation is the time between knowing you WILL be negotiating and the time that you actually negotiate. THAT is the time to put together your plans based on the personality of your opponent, your own negotiating range (how high AND how low), how reluctant you will be if you have to walk away from the deal.
2. A negotiation should be considered as being successful if:
# Both sides feel a sense of accomplishment
# Both sides feel the other side cared
# Both sides feel the other side was fair
# Each side would deal again with the other
# Each side feels the other side would keep the bargain
3. Noticing and responding appropriately to personality types is essential to your success in negotiating
Three keys to making your negotiating win-win
1. Never narrow negotiations to just one issue
2. Remember that different people want different things
3. Remember that price is NOT always all-important
Three stages of negotiating
1. Find out your opponent’s stated goals; state what you want.
2. Gather information on your opponent and his needs
3. Reach for compromise
Ten Negotiation tactics that really work
1.
Reluctant Buyer/Reluctant Seller.
Always be reluctant. If you are to negotiate, never, never, never show enthusiasm for a price or a product you are interested in.
2.
The flinch.
Whenever you first hear the price of something react visibily. Express shock, disgust, and disbelief. Be theatrical. This technique alone will make you money. Practice.
3.
Never jump at the first offer, no matter HOW good it looks.
Two reasons…
Jumping at the first offer is robbing the other person of a chance to feel good about the transaction. Imagine working up the courage to make an offer on a home. They are asking 250,000 but you are going to work up the nerve to offer 175. You get to the office, make the offer, and they say, “Deal. We’ll take it.” You probably have two reactions:
“I could have done even better than 175,000!” or
“What is wrong with the house that they jumped at this offer?”
The truth is that you can ussually do better than the asking price.
4.
The want-it-all technique:
Ask for even more than you think you can get. When making an initial offer, act as though it will be your one and only chance to specify your demands. Two reasons why this serves you:
# You might get it. What is outrageous to you might be acceptable to them.
# You have wiggle room with which to negotiate. If you ask for a, b, c & d, but you REALLY want only a & b, then you have room to scale back and make the opponent feel like THEY won something in the negotiation. (i.e., “They asked me for a, b, c & d but they only got a & b!”)
5.
The nibble:
After you have made your agreement, then add on another request BEYOND what you have already agreed on. You’ve purchased the BMW, and then, just before signing, say, “This will include a cd player, won’t it?” (Or buying a computer, “This will include a printer, won’t it?”)
6.
The trade-off:
The trade-off is a great counterto the “nibble.” Simply respond to every request for concession with a question: “If I do this for you, what will you do for me?”
This strategy may give you something you really want that you hadn’t asked for in the original agreement. If your opponent feels like they are asking for a favor, you score points for working with them to fulfill their request. It also adds value to your concessions and discourages the other person from continuing to use the nibble on you.
7.
Higher authority.
This stategy buys time, and allows you to position yourself as being in agreement with the opponent. “This sounds like a fair offer to me, let me run it past the (CEO, Board of Directors, Spouse) and make sure that it’s agreeable.”
Then you can return with a better counter-offer without losing rapport with the opponent. (“I’d love to accept your offer of $15,000 for the training program, but my board of directors informed me that they have a budget that cannot exceed $8,000”)
It’s better if the Higher Authority is more than one person, so they don’t counter with, “Well, let’s go and see the supervisor together and get this resolved.” With more than one person in Higher Authority the terms of the Higher Authority’s participation is up to you.
8.
Set-aside technique for avoiding impasse
If an impasse is reached, say, “If we set this issue aside for a moment, is there any other reason why we ought not more forward?”
That allows you to shift attention away from the impasse and refocus on mutual agreement and your united aim toward resolution.
9.
The vise technique
This is where you try to squeeze a little more out of the deal. Counter their offer with “Can you do better than that?” or, ” Is that the best you can do?” People always want to do their best.
10. Make sure that you have
Walk-Away willpower.
If your opponent senses that you are committed and would not walk away from the transaction, then the negotiation is over. If you want to buy it for a low price, you mustn’t fall in love with it.
The Never-Do List for better Negotiating
1. Never be under time pressure to make the deal (and if you are under time pressure, never reveal that you are — or if you have a deadline.) The person under the greatest time pressure is in the weaker position and usually loses in the negotiations.
2. Never “leave details till later” — 80% of the concessions are made in the last 20% of the time spent negotiating.
3. Never be the first person to name a price
4. Never make inflexible offers. You can always exchange concessions in one or more areas. (Do make LOW offers, but just make sure they are also flexible.)
5. Never fall in love with the item you are negotiating for. (If you do fall in love with it, forget using any negotiating techniques.)
Always be willing to walk away!
Mastering the Art of Negotiation - To learn more about this author, visit Mandy Bass's Website.
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Regardless if you are in the market for a home, selling a product, or simply trying to get the kids to clean up their rooms — you have to negotiate what you want. If you consider that everything you want is owned or controlled by someone else you will realize in fact that we are all negotiating MOST of the time. So it makes sense to learn how to get better at it.
There are predictable responses you can count on in the negotiating process and effective tactics that good negotiators know how to use and respond to. Before getting into those specifics however, it is important to understand the fundamental principles that govern ALL negotiations and situations of influence.
Negotiation Principles
1. There are three critical factors in every negotiation
a. Power
b. Information
c. Time
Whenever possible plan ahead of time. The most important phase of negotiation is the time between knowing you WILL be negotiating and the time that you actually negotiate. THAT is the time to put together your plans based on the personality of your opponent, your own negotiating range (how high AND how low), how reluctant you will be if you have to walk away from the deal.
2. A negotiation should be considered as being successful if:
# Both sides feel a sense of accomplishment
# Both sides feel the other side cared
# Both sides feel the other side was fair
# Each side would deal again with the other
# Each side feels the other side would keep the bargain
3. Noticing and responding appropriately to personality types is essential to your success in negotiating
Three keys to making your negotiating win-win
1. Never narrow negotiations to just one issue
2. Remember that different people want different things
3. Remember that price is NOT always all-important
Three stages of negotiating
1. Find out your opponent’s stated goals; state what you want.
2. Gather information on your opponent and his needs
3. Reach for compromise
Ten Negotiation tactics that really work
1.
Reluctant Buyer/Reluctant Seller.
Always be reluctant. If you are to negotiate, never, never, never show enthusiasm for a price or a product you are interested in.
2.
The flinch.
Whenever you first hear the price of something react visibily. Express shock, disgust, and disbelief. Be theatrical. This technique alone will make you money. Practice.
3.
Never jump at the first offer, no matter HOW good it looks.
Two reasons…
Jumping at the first offer is robbing the other person of a chance to feel good about the transaction. Imagine working up the courage to make an offer on a home. They are asking 250,000 but you are going to work up the nerve to offer 175. You get to the office, make the offer, and they say, “Deal. We’ll take it.” You probably have two reactions:
“I could have done even better than 175,000!” or
“What is wrong with the house that they jumped at this offer?”
The truth is that you can ussually do better than the asking price.
4.
The want-it-all technique:
Ask for even more than you think you can get. When making an initial offer, act as though it will be your one and only chance to specify your demands. Two reasons why this serves you:
# You might get it. What is outrageous to you might be acceptable to them.
# You have wiggle room with which to negotiate. If you ask for a, b, c & d, but you REALLY want only a & b, then you have room to scale back and make the opponent feel like THEY won something in the negotiation. (i.e., “They asked me for a, b, c & d but they only got a & b!”)
5.
The nibble:
After you have made your agreement, then add on another request BEYOND what you have already agreed on. You’ve purchased the BMW, and then, just before signing, say, “This will include a cd player, won’t it?” (Or buying a computer, “This will include a printer, won’t it?”)
6.
The trade-off:
The trade-off is a great counterto the “nibble.” Simply respond to every request for concession with a question: “If I do this for you, what will you do for me?”
This strategy may give you something you really want that you hadn’t asked for in the original agreement. If your opponent feels like they are asking for a favor, you score points for working with them to fulfill their request. It also adds value to your concessions and discourages the other person from continuing to use the nibble on you.
7.
Higher authority.
This stategy buys time, and allows you to position yourself as being in agreement with the opponent. “This sounds like a fair offer to me, let me run it past the (CEO, Board of Directors, Spouse) and make sure that it’s agreeable.”
Then you can return with a better counter-offer without losing rapport with the opponent. (“I’d love to accept your offer of $15,000 for the training program, but my board of directors informed me that they have a budget that cannot exceed $8,000”)
It’s better if the Higher Authority is more than one person, so they don’t counter with, “Well, let’s go and see the supervisor together and get this resolved.” With more than one person in Higher Authority the terms of the Higher Authority’s participation is up to you.
8.
Set-aside technique for avoiding impasse
If an impasse is reached, say, “If we set this issue aside for a moment, is there any other reason why we ought not more forward?”
That allows you to shift attention away from the impasse and refocus on mutual agreement and your united aim toward resolution.
9.
The vise technique
This is where you try to squeeze a little more out of the deal. Counter their offer with “Can you do better than that?” or, ” Is that the best you can do?” People always want to do their best.
10. Make sure that you have
Walk-Away willpower.
If your opponent senses that you are committed and would not walk away from the transaction, then the negotiation is over. If you want to buy it for a low price, you mustn’t fall in love with it.
The Never-Do List for better Negotiating
1. Never be under time pressure to make the deal (and if you are under time pressure, never reveal that you are — or if you have a deadline.) The person under the greatest time pressure is in the weaker position and usually loses in the negotiations.
2. Never “leave details till later” — 80% of the concessions are made in the last 20% of the time spent negotiating.
3. Never be the first person to name a price
4. Never make inflexible offers. You can always exchange concessions in one or more areas. (Do make LOW offers, but just make sure they are also flexible.)
5. Never fall in love with the item you are negotiating for. (If you do fall in love with it, forget using any negotiating techniques.)
Always be willing to walk away!
Mastering the Art of Negotiation - To learn more about this author, visit Mandy Bass's Website.
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