Love or hate them negotiations are an integral part of not only business but everyday life. Negotiations allow people conducting transactions, both commercial and social, to attempt to reach agreements which are more acceptable to everyone involved. Unfortunately, these negotiations are usually battles of wills in which some are better than others in swinging the scales in their favour. No one can give you a completely foolproof manual on how to be a better negotiator; it is usually a skill that is developed over time and of course, some people have a bit of a natural edge over others. Hopefully, this piece can serve as a guide which can help you hone and improve this skill which is so crucial in business interactions.
Do you need or want to negotiate?
It is important that you know when to and not to negotiate. This is especially important if you are dealing with someone whom you have to negotiate with on something more crucial in the future. There is nothing logical about negotiations, emotion and mood play a very big role in how these turn out. You can see how being regarded as “difficult” or “cheap” might colour the other party’s opinion of you even before you get to the more important negotiations. This advice works both ways, whether you are the seller or buyer.
Before you enter a negotiation you should gather the relevant information. It would be folly to enter a negotiation about the price of something you want to buy or sell when you have no idea what its market value should be. The research will give you a better benchmark for how good the offer is rather than relying on your “gut feeling” which is often informed by how desperate you are for the item, service or money. Lack of knowledge will be used against you; similarly, you can pounce on the ignorance of your counterpart in the negotiation.
Increase your alternatives
Over-reliance on the party you are negotiating with places you at a considerable disadvantage, more so if they are also aware of your lack of options. Whether you are a buyer or a seller, you should cast your nets as wide as possible (when you are looking for suppliers/customers) to avoid an air of desperation tainting your negotiation efforts. Remember that completely rejecting the other party’s offer should always be very much on the table. Without this last fall back your negotiation will fast become a begging session.
Let your alternatives slip
You can also tactfully let your set of available options slip to your counterpart. Besides the urgency that this lends to the negotiating process, it may also improve the quality of the offers that are being thrown in your direction. Some might feel the temptation to lie at this point but you are probably not as good a liar as you think—bluffing will only weaken your bargaining position further if it does not work.
Control the logistics
When you have the chance to set the meeting place and time, pounce on it. Never let your counterpart become aware of the excessive free time on your calendar. Busier people get all the respect so making yourself available all the time will weaken your position in negotiations.
When given the chance always schedule meetings as early or as late as possible. When you are one of the first or last encounters that someone has on a day, your interaction will be remembered more vividly. In many cases when you are being assessed against others this will be mistaken for superior performance on your part.
Negotiate on your turf
Nothing gives you a confidence boost quite like being in familiar surroundings which you are comfortable in. When you are on your turf you are in a position of power so to speak. This also allows you to choose the environment of the meeting down to the last piece of furniture. There is a reason why the visitors’ chairs in offices are smaller and far less comfortable than the ones belonging to the office owners. Use this within reason: there is no need to place yourself on a plush armchair while your visitors are stranded on hard benches. Taking this to such ridiculous lengths that your visitors notice will backfire and will have the opposite effect to the one you are trying to achieve.
Do not beg
When you start to beg it not only stops being a negotiation but you are also making your offer practically worthless. This complete handing over of power to your opponent is unlikely to do any good for your future bargaining efforts with that party. Unless you are trying to close a very substantial deal—the once in a lifetime kind or one upon which the existence of your business depends—never pursue a potential customer or supplier beyond what is reasonable.
To increase the chances of a negotiation going your way be friendly towards your counterpart. Exchange pleasantries and small talk—approaching a business negotiation with too much seriousness will make the process and your opponent needlessly aggressive.
Make use of “The difficult other”
This is a manipulation tactic that is used to politely reject offers and suggestions while maintaining your counterpart’s goodwill towards yourself. All the blame is directed towards an absent and sometimes imaginary third party. Suppose you do not want to sell your product for any price less than X, you can then reject offers below this by alleging that your partner/boss/supervisor explicitly instructed you against this. Where you choose to concede, you can reframe this as a favour and say that you will “take the blame”.
Anchor your offer
Whenever you have the option to make the first offer, jump on it. Whether you are the buyer or the seller this will allow you to set the amount from which to start negotiations. Note that stating an unrealistic or ridiculous figure will make this first move pointless. Insisting that your opponent make the first offer in the hopes that they will shoot themselves in the foot robs you of the opportunity to take control of the negotiation from the word go. Buyers should state a price below what they are willing to pay while sellers should choose one above that which they are willing to accept—the difference is where the negotiators will pretend to make concessions.
No matter how well the initial offer appears to be in your favour if it is a negotiation make at least one counteroffer to hide this fact. People like feeling that they got the best deal possible out of a negotiation. Accepting their first offer immediately robs them of this comforting illusion and many will feel cheated.
Pause before accepting offers
Another alternative to the counteroffer above is a long pause before accepting the offer. This makes your counterpart believe that you are thinking it over. Similar to the case above you do not want the people you just negotiated with to develop misgivings about what they just agreed to.