Hone your bargaining skills with these critical strategies that will ensure you get better deals in business as well as in your life outside of work.
Life is all about negotiation, from getting the kids to eat their vegetables to negotiating a better salary at work, yet very few of us any spend time thinking about what negotiation really is or even learning this vital skill.
Negotiating can bring out a range of emotions in people. Some will resist and avoid it as they see it as a potential source of conflict whilst others simply fear that they may be on the losing side. Conversely, some people will view negotiation as one of the most empowering and influential life skills. Despite this range of conflicting emotions that negotiation elicits, one thing is for certain; being a master negotiator is one of the most important life skills that you will ever learn.
Victor Kiam, the entrepreneur who liked Remington razors so much that he bought the company, once said: “A negotiator should observe everything. You must be part Sherlock Holmes, part Sigmund Freud,”
So whether you’re a Sherlock or lean more towards Sigmund, arm yourself with these time-tested strategies that will sharpen your negotiation skills, making you a master deal-closer who gets the best possible deal in business as well as in your life outside of work.
Solid planning and preparation
Most people think you need vast experience to be a master negotiator, but this isn’t the case as it takes tenacity and solid preparation to get the message across powerfully and succinctly, identify the motivators that will resonate with the other side, anticipate any objections and finally come to mutually desirable terms.
Preparation involves gathering as much relevant information before the meeting even takes place. Finding out the other side’s needs, the pressures they are under, the options they have, etc. It’s practically impossible to make accurate decisions without an understanding of the other negotiator’s situation. Put simply, the more information you have about the other side, the stronger your position will be to secure the outcome you require.
Building strong relationships
In negotiation, as in business in general, one of the most important and helpful things that you can do is to build strong relationships. Key to this is to find out something about the other negotiator’s life outside of their business. A great deal of useful information crops up in casual conversation, including what motivates them, irritates them, their values, etc. The art of being a master negotiator is to use what you have learnt in these conversations to maximum advantage.
If you don’t ask, you won’t get
A simple truth in negotiation is that you must ask for what you want. Although this may sound trite, in practice it can be a very daunting prospect as people naturally fear rejection and instinctively refrain from asking for things in life so as not to appear “greedy”. It’s important to remember that in the world of business, rejection is never personal. If you hear “no”, the other side is rejecting the offer, not you. Always understand that if you don’t ask, you simply won’t get — and the only way to master rejection is to keep getting rejected and then to keep on asking.
The 70/30 Rule
Listening is a basic skill and the absolute bare minimum that you must have to start building on your skills as a master deal-closer. To be a good negotiator, you must learn how to listen to the other side and apply what you hear when you make your next move. During a negotiation, the other side will tell you everything you need to know, and all you have to do is listen. Be an effective listener by letting the other side do most of the talking. Simply follow the 70/30 Rule; listen 70% of the time, and talk just 30%.
Show the other person how their needs will be met
Everyone’s view of the world is different, and powerful and influential negotiators always look at the situation from the other side’s perspective. Instead of focusing on trying to win the negotiation, they try to understand the other negotiator and show him or her ways to feel “satisfied”. In this way, your opponent will be more inclined to help you “satisfy” your needs.
However, “satisfaction” doesn’t mean that you should give in to all their demands immediately. It means that their basic interests have been fulfilled. The difference between a demand and a basic interest is that a demand is what they say they want while a basic interest is what they really need to get.
Aim high to do better
Successful negotiators are optimists. This means that when you expect more, you get more. A strategy for achieving higher results is opening the discussion with an extreme position: sellers ask for more than they expect to receive and buyers offer less than they are prepared to pay. It’s a fact that people who aim higher do better. Conversely, if you have low expectations, you’ll probably end up with a less satisfying outcome.
Always be willing to walk away
On a par with listening, one of the most basic skills is that you must be able to walk away if the deal doesn’t satisfy your requirements. If you’re desperate for a positive outcome, you won’t be able to say “no”. But if you say to yourself, “I can walk away if I can’t conclude a deal that is satisfactory,” the other negotiator will see this inner strength, and it will force them to make a concession.
If you don’t even consider the option of walking away, you may be inclined to cave in to the other side’s demands just to close the deal.