17 Jan, 2013
Negotiate To Achieve The Impossible – Derek Arden
There are 2 kinds of people in the world: those who negotiate and those who don’t. there are also two prices in the world: the price for those who negotiate and the price for those who don’t.
Knowing how to negotiate effectively is a crucial skill for everyone in life, but for the entrepreneur at start-up stage it is about laying essential foundations for business survival. Every day, I see businesses spend far too much money on everything from stationary, to premises, to accountancy fees.
At the very moment profits are lowest, costs are highest. However, it doesn’t have to be that way. A good rule of thumb is to begin by assuming that everything is negotiable – and to have planned in advanced what you want to achieve. With a pound of preparation, an ounce of bravery and a pinch of competitiveness, everyone can get a better deal.
We are all born negotiators. In childhood we learn to haggle, by stamping our feet or crying to get our needs met; as teenagers we learn to bargain, ‘I’ll do the washing up if you let me watch TV’; as adults we learn to negotiate – closing a deal to mutual benefit. Our entire lives are made up of negotiations of various kinds. It is a 24/7 skill. In the world of win, win, win negotiating, the impossible becomes possible because everyone’s needs are met. It is the only positive way forward in business, in relationships, and in situations of conflict.
A negotiation is:
• Any discussion that aims to achieve a mutual agreement
• About reaching agreement with others so that you can achieve your goals.
• An exchange of one valuable resource for another, which involves an element of trade or bargaining – to shared advantage.
When we position ourselves in a negotiation, the perception of power depends on how we see ourselves and how the other party sees themselves. In a conflict situation especially, there are often three views, mine, yours and the right one. The way forward is to know what you want in advanced.
• What is my dream position: the best outcome I could hope for?
• What is my target position: the realistic outcome?
• What is my walk away position: the point at which the deal becomes uncommercial and unviable?
• What is the alternative position: what is the cost if I walk away, and what is the cost of the alternative solution?
Then ask yourself:
• What is the other person’s position?
• What do we both really want to achieve?
The point at which your needs overlap with theirs in the zone of potential agreement.
In the words of Dale Carnegie: “if you help people get what they want, they will help you get what you want.” This is the essence of win, win, win negotiating.
Know who you are dealing with.
Most people use the same negotiation style every time, so preparation is the ‘magic ingredient’ that will encourage things to go your way. Ask yourself: have I negotiated with this person before? Is he/she the decision-maker? Will they start high and then come down? Is there a time constraint? Are there cultural differences in negotiation style?
Judge by appearances
People buy from people; so dress appropriately and take a few moments to build rapport. Body language is important, as is tone of voice. Control your emotions. Use your instincts – and don’t assume everyone thinks like you.
Always seek knowledge (ASK)
Don’t expect people to be fair – instead help them to be fair, by assuming you can get a better deal. Ask questions. Find out their agenda early. Remember: the other person needs to make a sale and they need to know on what terms you will buy. If you are concerned the other person might say NO to what you ask, remember they might also say YES.
Listen More Than You Talk
Ensure that the person knows they are in competition. That will sharpen the price. Try phrases such as: “I can’t decide between X (the owner’s brand) and Y (the competitors brand). What can you do for me on the price?”, “Are you sure this is your best price?” (ask this twice.) Remember listen is an anagram of SILENT. Be Brave. Be silent. Be deadly. This is when the best offers are made.
Closed questions close a deal
Price is important, but it is usually the extras that influence the profitability and close the deal: service, quality, delivery, exclusivity, payment terms, and so on. Seek solutions that are mutually beneficial. Ask Closed questions to close a deal. Summarise the terms and make sure that both sides understand what has been agreed.
A win, win, win deal is always one where all parties feel they have got what they wanted – and one that is confirmed in writing by a confirmatory letter or contract of agreement.
Remember, your first negotiation is always with yourself. Make sure you believe that everything and anything is negotiable – even the impossible – because it is.