Negotiation Fundamentals: How To Negotiate Effectively
By Sajid Inayat
Introduction
We negotiate every day, but most times, we don't really know that we are negotiating. Negotiation occurs everywhere; in business, between governments, non-profits, sales, legal proceedings, and personal situations, such as marriage, parenting, divorce, etc.
Negotiation skills are the qualities that enable at least, two or more parties to reach a compromise. The qualities required to successfully negotiate include cooperation, planning, communication, persuasion, and strategizing. For you to become a successful negotiator, you need to first understand these aforementioned skills.
The goal of negotiation is to settle a point of difference or to create outcomes that will satisfy various differences. Negotiation is conducted by putting forwards various offers and making concessions to achieve an agreement.
The duration of time to negotiate is dependent on the circumstances. Negotiation can sometimes take a few minutes, and in more complex cases, it takes longer.
The beneficial outcome of negotiation can be for the parties involved, or just for one or some of the involved parties. For you to be an effective negotiator, you need to understand the process as well as other negotiation techniques to avoid conflict, increase your chance of closing a deal as well as establishing a relationship with other parties and gain profit.
It was Shapiro that said negotiation doesnt have to be an adverse game.
A successful negotiation tends to result when the parties collaboratively problem-solve their differences, he says. Leaders will arrive at a better outcome if they work together, side-by-side, and jointly seek to satisfy their shared and differing interests
In negotiation, you should always strive for a win-win situation, where agreements are created by taking care of the interests of both sides.
When you have the ability to negotiate effectively, you will be appreciated in todays competitive market, because a lot of businesses suffer huge losses due to poor negotiation skills, whereas, their profitability can be increased with a better negotiation.
Apart from that, negotiation cuts across all other aspects of our lives, we negotiate with our employers for salary, we negotiate with our teachers for grade, we negotiate with our boyfriend or girlfriend for their time, and so on. When you are effective in negotiation, it helps you improve your relationship, because both parties are able to strike a deal without hurting each others sentiments. If you are an effective negotiator, you will be able to achieve your goals. Negotiation, therefore play an important role in living a successful life.
Irrespective of who you are, you should strive to learn the art of successful negotiation for you to lead a calm and peaceful life.
Use Smart Tactics to Increase your Bargaining Power
When the bully on a boat in the movie: Enter the Dragon, asks Bruce Lee to describe his Kung Fu style, Bruce Lee said: you can call it the art of fighting without fighting" . In the same vein, negotiation isn't a dispute or a confrontation. Great negotiators don't fight.
Negotiation is not really about competing. It is about being able to communicate well. This is especially true if you are requesting a raise.
Want to be a better negotiator? Here are some tactics to increase your bargaining power:
1. Listen more than you talk
When you are nervous, it is easy to start a negotiation with only what you want to say in your head.
The goal of negotiation is not about getting what you want, it is also about helping both sides get what they want. Otherwise, how will you come to an agreement? In order for you to be able to do this, you really need to know what the other person wants, which means that you have to listen attentively.
For you to strike a common ground, you have to know that common ground exists.
In most cases, price is usually not the only thing on the table. It is possible that your counterpart would appreciate a longer delivery schedule, or perhaps a larger down payment. The point is, there are other options that can be explored to add to your negotiating power. You can only detect this by listening.
There was a time I wanted to buy a house, and I couldnt come up with the whole amount instantly, so I made a contract signing payment over the period of several months till the actual amount completes. The landlord was excited to do so. What I basically did was to make the payment of the house according to how convenient it going to be for me to pay.
2. Timing is advantageous.
Let me tell you a secret. Do you know that the best time to buy a car is at the end of the month? Do you know that salespeople have to hit their quota, and dealership wants to "make" their month? The same can also be said for real estate; house sales, (property leases) are generally not strong in the winter months. What this means is that owners will be more likely to negotiate.
Also, you can use back-end timing to your advantage. Let say you want to lease a property starting in the month of March. Signing a 12-month lease means the owner will have to look for another tenant next March. But if you request for a 15-month lease, the property will be available at the start of a prime rental period. This means that the landlord or landlady should be happier to accept a lower amount.
This is what raises an important point.
- Always find the right way to frame the negotiation
Deepak Malhotra showed in Negotiating the Impossible how properly framing a negotiation translates to finding the best perspective from which you can view negotiation. The frame can be money, or delivery schedule, or timing, or even quality.
For the landlord example I gave above, price isnt the only frame, time was also included. In my house buying example, both time and price was the frame. If you frame a negotiation properly, it will be easier for you to negotiate on points that matter to you.
For Instance, let say you need a particular service performed. If you are willing to wait for the service to be executed-- or to be carried out more slowly than normal--- the person carrying out the service may be able to accept a lower price, since your timing fits in well into the service providers schedule. Look at it from this angle, if a customer asks you to perform a rush job, you will probably ask for a raise in price to accommodate the additional work, while considering the impact its going to have on your schedule and your other customers. The same principle applies in reverse: when you give additional time, the provider should be able to give concession on other terms.
If you are buying a car, implicitly framing the negotiation by waiting to the months end and then saying you want to purchase the car right away frames the negotiation in terms of time for the salesperson. Or you can frame it by going to the dealership at the end of the year. Of course, the salesperson will be happy to strike a deal, since most customers who leave saying I will return to buy it never almost do.
- Always Get What You Give
You send a proposal to a customer and she requested a 15 percent cut in price. Simply saying yes to the offer sends a terrible message. In fact, it means that your original price was too high.
It is important that when you make a concession, make sure that you receive something in return. Perhaps, you can provide the 10 percent discount, but the delivery schedule will be extended. Or asking for a larger deposit.
Keep this in mind. You can also employ this approach as a buyer. You dont just say I will have to reduce the price by 15 percent. Just say, I can only afford to pay $X, but I will be happy to sign a long-term contract under those terms.
