Banking

Five tips for successful negotiations

One of the greatest strengths of successful businesspeople is the ability to out-negotiate others to achieve the desired results. These tips will help you come out on top.

Whether you covet a new job, a raise, or a business deal or you need to rectify a problem with a loved one, the ability to play dealmaker is your secret weapon to getting the result you want. Negotiating doesn't need to be back and forth, point-counterpoint banter. I've found that the most proficient negotiators manage these conversations in such a way that the other party likely does not even know they are engaged in a bargaining process. The bottom line is simple: if there is something you want that is in someone else's control, knowing how to negotiate will stack the odds in your favor. The key is to be tough but fair.

Note: These tips are based on an entry in our Career Management blog.

1: Be prepared to walk away

This is single most important strategy to getting what you want out of life. If you aren't prepared to say, "No" and mean it, you are likely to end up settling for a lesser outcome. Before entering into the negotiation, know in advance exactly what you are and are not willing to concede, so that you do not need to process this information on the fly without adequate time to weigh the pros and cons of each.

2: Know when to forego all together

A good deal comes together quickly. A bad deal takes way too long. Take a clue from the amount of time it's taking to get what you want. If you have to force it, chances are it will come back to bite you later on.

3: Deal at the right level

Nothing is more frustrating than trying to do a deal with an individual who can't make the final decision. It's like negotiating against yourself. You address an issue and try to come to a conclusion and then the other person takes that to someone else behind the scenes, only to come back and say it can't be done on those terms. It's far more efficient and effective to find the right person to negotiate with directly.

4: Come prepared

The more information you have surrounding the circumstances of your endeavor -- the marketplace, for example -- the more likely you are to not only prevail, but to get the best deal possible. While you may actually prevail by shooting in the dark, not knowing the extent of the opportunity could result in your leaving a lot on the table. Whether it's the average pay for a given job, the price typically paid for a product or a service, or who you're competing with for a new position, knowledge is truly power.

5: Don't take anything personally

To maintain objectivity, treat every negotiation as if you are doing a deal for someone who has hired you as the professional closer. When you allow yourself to get emotionally involved, rational thought often goes by the wayside and you're far more likely to concede to your later regret. Cool heads get the best, and most, out of what they are seeking.

Bonus tip: Anticipate objections

Prior to the negotiation, brainstorm all the reasons or objections that may prevent you from getting what you want and prepare a thoughtful counterpoint for each one. During a negotiation, people conjure all sorts of reasons why something can't be done, many of which are often bogus. Until you know the valid sticking point, you're just spinning your wheels.

About

John M. McKee is the founder and CEO of BusinessSuccessCoach.net, an international consulting and coaching practice with subscribers in 43 countries. One of the founding senior executives of DIRECTV, his hands-on experience includes leading billion d...

10 comments
TracyMcBroom
TracyMcBroom

Some negotiators and/or sales people use simple, subtle techniques to persuade (manipulate) others. Some of the techniques may seem obvious, but knowing about them helps me recognize and avoid them. I recommend reading about the six principles of influence to learn more about them. This might fit with the emotional references in tip 5.

jamiefixit
jamiefixit

This is kind of a big one. In negociation if you give people one option only, they feel cornered and will respond appropriately, ie in the defensive, they might feel bullied and then it becomes a battle of will and objectivity goes out the window. If you give them two or more options they won't because they will feel they have choices and won't feel cornered. The art is in constructing two reasonable options, either of which work for you but with one as being more obviously beneficial to both. Oh and it has to be a win/win. Don't let short term greed blind you to a much bigger longer term opportunity. If you screw people to the ground because you have an advantage over them now, they might go for it now because you are their only choice, but they won't want to deal with you again, so you have potentially destroyed a longer term beneficial business relationship. By being even with them when they know you could have hung them out to dry, you will build a trusting relationship with them and they will respect you for this and come back...

Bogdan Peste
Bogdan Peste

One of the tactics I use is the "higher authority" excuse, especially on the phone with a new equipment provider, even if I am the decision maker. So regarding advise no.3, it may not be that the other side doesn't have the authority to make decisions, it may be he is using that as an excuse to: 1) Seem like he is on your side, even though it's obvious he's not and 2) Make you lower your price not because he wants to, but because those pesky "board of directors" don't understand the true value of your product, and they simply won't go for that price.

DaveDonaldson
DaveDonaldson

In a negotiation, always get something in return for a concession on your part. For instance, when a customer tries to get you to come off of your price, agree to do so in exchange for an immediate signature on the dotted line. "Your price is too high. Can you come down 10%?" "If I can do that, will you sign off on this right now?" You've given a tacit agreement to their request, but strengthened your chances of getting what you are after.

DaveDonaldson
DaveDonaldson

Two is good, but I eventually learned that three seems to be the magic number, at least for me. It seems to immediately lower the stress level on the part of the buyer. It always surprises me how often the highest price is chosen. Of course, I always frame the middle option to be the one I believe to be the best fit. The lowest price is rarely chosen.

blarman
blarman

Allow for options: Yes. Cornering or being cornered tend to make people defensive and closed minded as they invoke the "fight-or-flight" response. Look at the long-term: Yes. Don't forget that you are more likely to be successful in the long term if you focus on every business deal as if it were focusing on the long-term relationship in your dealings. Why? It's cheaper and easier to keep business with existing customers by a 10-1 margin than to find new ones, and your existing customers are your best source of referrals for new business! If you haven't read Sun Tzu's "The Art of War", I encourage you to do so. That book is all about strategies to win the war WITHOUT having to fight it in the first place and the ideas apply very well to business dealings.

Bogdan Peste
Bogdan Peste

Of course , the term "win/win" depends on perception, and the objective of a good negotiator is to make the other party believe that they have won in the negotiation. And the secret is, as jamiefixit mentioned, to give something to get something, like agree to a 2 year contract instead of one if your terms are satisfied.

jamiefixit
jamiefixit

Ha, every US car dealer I've ever been to, has had to go and talk to his manager to get approval on a price...

TracyMcBroom
TracyMcBroom

I agree with Dave's comment. One negotiation tactic is to ask for something important at the last minute hoping to get it for free. When you've prepared counter offers in advance, you can ask for something in return: "We can probably do that if..."