We all negotiate — all of the time. We negotiate with our employees, with clients, with salespeople, with our children, with car dealers, and on and on. Most of what you read on negotiating skills makes it sound like you have to be a certain type of person to be a good negotiator. But the truth is, most of us are not, and do not want to be, thick-skinned, aggressive, or winners at all costs. We want to negotiate in good faith, follow a few basic principles that improve our skills, and come out with a win-win for both parties. This article is for you part-time, non-professional negotiators who want to create deals that benefit both parties and lead to long-term relationships.
Preparation for the negotiation is over half the battle. Most people do things for their own reasons, and most negotiators only prepare for their own needs in a negotiation. Effective negotiators know their counterpart’s needs and motives through research and “getting in their shoes” (you’ll notice I didn’t call them “adversaries”). This discovery phase attempts to answer questions such as: What are their time, industry, or financial pressures? What are their personal or corporate objectives? What are their options if they don’t make a deal with you? Who will make the final decision? According to negotiating expert and Vistage International speaker Ron Fleisher, “The more information you have, the greater your ability to solve the other person’s problem to your advantage.”
Never pre-negotiate with yourself. Negotiation trainer Jack Kaine defines “pre-negotiating” as the process of developing a proposal and then reworking it with a lower price or terms before one even presents it to the other party. Pre-negotiating weakens your position before you have even heard from your counterpart, and unnecessarily gives away your bottom line. A way to avoid this trap is to work with a team of people to draft the proposal or offer. A team will accept greater risk than will an individual, and there will be less temptation to pre-negotiate.
Speak first. Master negotiators debate who should put the first offer on the table. Some say an aggressive first-offer creates a reference point for the rest of the negotiations. Others argue that making the first offer puts one immediately in defensive position. But one thing most agree on is that the party that speaks first in a negotiation sets the tone for the negotiation. Speaking first allows you to establish a positive tone for the negotiation and to practice the next principle of effective negotiations, which is to ask a lot of questions. But in order to speak first with effectiveness, you have to script and rehearse your opening remarks. This is no time to wing it.
Ask lots of questions, and then listen — really listen — to what they say. Jack Kaine preaches that “the party that asks the most questions in a negotiation determines the content and direction of the negotiation. You control the negotiation, not by talking, but by asking questions.” And when the other party answers your question, listen carefully, for eventually they will tell you what they need (remember our first principle of preparing from the perspective of other party?). Unfortunately, most people are so focused on their own agenda and needs that they fail to hear what the other party is saying.
Focus on enlarging — not dividing — the pie. Most people think that negotiating involves competing, bargaining, compromise, or manipulation. But instead of subtracting elements during the negotiating process, add elements — things or services you can offer the other party that have high value to them but generally won’t cost you that much. Add free range balls for a month instead of cutting the price of that new golf driver. Offer free service calls for six months to the sale of a major product. Come to the negotiating table with a range of elements in your hip pocket that you can add to enlarge the pie. But put them on the table slowly and reluctantly.
Know your walk-away and BATNA position in advance. Your walk-away point is the absolute limit on the least favorable outcome you will accept. There would be no gambling industry if gamers went to the tables with a walk-away position they kept to. Your BATNA is your “best alternative to a negotiated agreement.” It defines what you will do if you can’t reach an agreement on the deal, which helps reduce the panic that often ensues when a negotiation isn’t going well. You do have alternatives and don’t have to lose in the end.
Kent Wilson (PhD) is a business practitioner, leadership specialist, and learned his best negotiating techniques with his two daughters. After running companies for 30 years, he now serves as an executive coach with Vistage International and the Nonprofit Leadership Exchange in Colorado Springs. He can be reached at firstname.lastname@example.org.