What are the top things to know when negotiating?
I don't think I am the best at negotiating. This comes into play in various aspects of my life both professionally and personally. What are some of the fundamentals to effective negotiating?
Negotiating is more than leaving with the biggest fish, it's also important to keep up a good relation with your counterpart. Be sure you keep the fishing water clear.
1. Know who you negotiating with.
2. Do you need a intermediary
3. Do your homework
4. Know your limitations
5. Relax and enjoy the experience
I believe that there are 3 basics...
1. You have to be able to see a positive outcome (win/win) for the situation.
2. You have to be willing to walk away if that outcome cannot be achieved.
3. The quality of your communication is the quality of your negotiation. Learn to master non-verbal communication, active listening, and presentation.
Know what you want as a preferred outcome
Discover the "stated" goals of the opposing party
Be willing to give up some of your not so important goals but be willing to walk away if your primary goals are not met.
One trick I learned a long time ago is when dealing with large contracts, begin with the last page and work forward.
Typically, the least controversy is put up front in order to create a YES momentum. The more difficult options are placed at the end of the contract.
I have to agree with many of the initial posts. Effective negotiation is often a function of solid evaluation of the circumstances and thoughtful planning.
That being said, you also should endeavor to understand the motivations, goals, and concerns of your opposing party. When you are able to "make the pie bigger" or create a "Win/Win" by finding areas where your interests overlap, it makes for a smoother process. However, I should note, that some negotiating situations simply don't lend themselves to anything but a "competitive" mindset. You can't control the other party or their representative, you just have to figure out how to deal with what's thrown in front of you. You also cannot control the degree of leverage you may or may not have in the situation and you have to work within and understand that context.
In any case, the more objective rationale you can use to support your position the better. You can never be in the position where your sole reason for a demand is "because that's what I want." Have valid reasons and arguments for each particular item you are requesting.
Another item to consider is the relationship among the negotiating parties. Is this someone you are going to be doing business with again? Is it someone you want to maintain a longer term relationship with? Do they work with or know people that you may want to work with? In situations where you do not want to nuke the bridge from outerspace you should not be trying to min/max your negotiation. Oftentimes, leaving something on the table can get you a lot further along. (Remember, pigs get fat but hogs get slaughtered).
In my experience history is a most valuable tool to use when negotiating. The more you know about the product, business or owner the more leverage you gain in understanding motive and business double-speak, that often occurs in negotiations.
When you have any meeting, not just negotiations, you should:
1. have an objective
2. know your parameters and limits (as Kenny Rogers song said, "know when to hold 'em, know when to fold 'em".
3. don't make a deal just to have a deal, stick to point 2.
4. be realistic - is what you are proposing reasonable and profitable to both
5. do your research on the person/company you are negotiating and have some idea of their limits/needs.
6. be consilatory and not confrontational.
7. learn to listen well - what are they really saying; how you answer their questions based on what you are really saying will close or end the negotiation.
8. pay attention to body language, it will tell you when to close, back off, continue negotiating or walk away.
9. hone your sales skills, you are selling an idea/concept to the other person. They must think it is the best idea for them.
10. don't forget to ask for the business or committment you are looking for.
11. sometimes the negotiation will proceed in small steps and take multiple meetings.
12. be yourself, be confident, be positive and be relaxed. It is a business/personal relationship that has to work for both sides.
The more experience you have, success and failures, will strengthen your skills. After any negotiation or sales call, always do a self-analysis of what went right, what went wrong, and what would you do differently.
I on the other hand think that when negotiating you should plan as well as be flexible.
Planning in the sense that you must have a plan A, plan B, plan C, etc. and by being flexible I mean stick to the plan, switch to other plans and if needed, combine the plans you have.
Despite knowing your counterpart, you must know your red lines too. This is very important for you to know what you should not accept.
Above all, you should have great diplomatic skills. Please, make sure in the first meeting you do not discuss the "hot" issues. Instead, try to buy what the counterpart is offering.
I certainly can not include all what is necessary. Should you have any further questions, please, feel free to contact me at anytime.