In the world of business, negotiations can play a major role in your success or failure. Even if you don’t realize it, virtually every interaction you have – with clients, customers, suppliers – falls into the category of negotiations. All too often, people do not fully consider the value that negotiation skills offer to businesses. There are many opportunities for a trained negotiator to take advantage of every day which can add greatly to the overall success of a company. Learning how to turn the opportunities for negotiations into positive events for your business is the main reason to take part in negotiation training programs.
Winning Isn’t Everything
You should have the ability to turn every business interaction you have into a positive for your business. But that does not mean that you need to “get the upper hand” in every one of these negotiations. In fact, when it comes to business negotiation, it is usually better to come out of it with a compromise agreement. This (hopefully) ensures that both parties are treated fairly, and would not have a problem conducting business together again in the future. As you well know, repeat business is good business, so try not to burn any bridges with your negotiation skills.
How to Reach a Fair Compromise
There are quite a few factors that go into
negotiation skills. Let’s go over some of these techniques that will help you get a fair deal without destroying business relationships.
1. Goals
You must first determine exactly what you want to get out of the interaction. At the same time, try to figure out what the other party wants. In all negotiation training programs, they teach that it is just as important to know what the other person wants.
2. Assets
What do you have that the other person needs? What does the other person have that you need? What are you willing to part with? What is the other person willing to part with?
3. Alternatives
It is not uncommon for negotiations to break down at some point. You may be unwilling to part with something that the other party wants, or vice versa. You negotiation skills will be sorely lacking if you do not learn to incorporate alternatives into your thinking. Determine what else you would accept after your primary goals.
4. Consequences
The most commonly overlooked aspect of a negotiation is the consequences. Many people fail to think of what will happen if they get their way in the interaction. Will it destroy your relationship with that person? If so, it may be better to compromise.
Invest in Training
There are many negotiation courses out there that will help you improve your negotiating skills. Make you sure look around for one that incorporates all of the aspects we discussed above. Invest in a very good, high-quality negotiation training program, and you will reap the benefits in the future.
Not everybody can negotiate properly. In fact, this is what probably separates successful businesspersons from the not-so successful ones. In today's competitive world of business, the success of an individual or a group will lie heavily on negotiating skills.He is a good communicator. Negotiating involves the act of communicating your needs and wants. Aside from the need to have open communication between parties involved, a good negotiator must be able to maximize the time spent with the other business partners by being able to communicate his ideas well. Misunderstanding among businesspersons and/or business groups may sometimes arise because of the inability to converse properly.He is a good listener. The act of communicating ideas in a negotiation does not end with having to inform. Remember that communication is a two-way process and the recipient of the information communicated must be able to understand and interpret the data properly. In order to do so, he must have good listening skills to get the job done.
Department stores and other retail outlets are starting to feel the pinch. But as the ancient saying goes one mans problem can be another mans opportunity. In this economic climate that saying is more true now than ever before, especially if you know how to haggle.Circuit City, Linens and Things, Old Navy and many other retailers are planning to close it’s doors soon. Yes, the daily tally of retail stores that’s shutting their doors and many others on the brink is staggering to the mind to say the least. But this can mean an unprecedented opportunity for savings if you know how to shop and what to negotiate prices.This is the time for price negotiation. Everything is negotiable has always been the saying of skilled shoppers, now it’s obvious even to those who balked at negotiating a price before.
In fact, because of the mountains of red ink many retailers are staring at each day, they wish someone would make them an offer – any offer within reason.Many would find it encouraging if someone would offer them an at cost offer. Other in-the-red retailers would take a small loss just to not have to keep counting and cleaning the same merchandise everyday – and having to pay someone to do it. This presents more opportunities for you to haggle for that t.v, stereo, suit, car or home you’ve always wanted.As in any major or minor endeavor, timing my friend is everything… and cash is king. If you have the cash you can negotiate business with confidence like never before. With credit shrinking faster than a cheap suit in the rain, more retailers will love the sight of cash in hand – and will be more open now to making a deal than they’ve ever been before.
Follow These Simple Negotiation Tactics for Big Savings.
1. To become a confident negotiator you must do your homework ahead of time. Find out what the items worth? Find out how many places have them for sale? Is the product or service a high, medium or low demand product or service? Remember, the more you know before you start to negotiate, the better you will negotiate.
2. When a negotiation is successful, both sides win. All negotiation is give and take. A win-win situation should be the result with both sides at least getting what they need.
3. Know that negotiation is not an event that happens, it’s a process of steps that lead to success. Paying attention to the simple but effective steps is the difference between getting a bargain price and overpaying for a product or service.
4. To negotiate effectively, you must be willing to walk away if the price or terms is too high. If you have to have a product or service no matter what, you’re negotiation power shrinks drastically.
5. Most salespeople worth their salt can spot a desperate buyer a mile away. So avoid appearing too desperate, anxious or needy for the product or service they’re selling. Otherwise prepare yourself to pay top dollar, in most cases.
6. Keep in mind an important part of negotiation is also knowing when to stop. Getting too greedy can often cause you to lose an otherwise good deal.
7. Lack of advanced preparation and setting a price limit is one of the biggest mistakes most people make when trying to negotiate. Set a spending limit and stick to it.
Negotiation experts will tell you the most important aspect in a good negotiation is knowledge. This requires researching the subject you are negotiating about thoroughly. In the case of interviewing, the more you know about the industry, the company, and the job ahead of time, the better. Especially when it comes to negotiating compensation, knowing what other people in the same type of position are paid can be very helpful. Negotiating skills can also be helpful in terms of persuading an interviewer that you are the right person for the job.Typically, when an employer decides they are going to recruit someone, they base their need on a specific person or a type of person that they have imagined. If the position is one that previously existed and the person who had the position last was good at their job, they are probably envisioning the ideal candidate should be just like the former employee.
Drawing out what the employer is looking for and convincing the employer that you would be a good fit requires negotiating skills.The good news is there are ways that you can research a company, an industry, and compensation before the interview. Does the company look for people who fit a certain profile? How much do people in your position generally get paid in the industry?A second principle used by effective negotiatiors is to come up with alternatives. Good negotiators don't walk into a negotiation with only one way they can get what they want. They think of several scenarios under which they could be satisfied. This kind of creative thinking can be very impressive in a job interview situation. For example, if you are not the best match for the position as they described it, presenting to the interviewer a couple of other scenarios under which you could be a better fit with their organization can score you major points and possibly turn a situation that could have been a waste of time for both parties into one with a positive outcome.
When most people hear the word "negotiation," they automatically think of one party being successful and the other not. Typically we think of a negotiator overpowering their opponent and getting them to agree to something they didn't want. While some negotiators do use tricks, most successful negotiators do not rely on them because they do not work in the long term. After all, someone can only be tricked one time, and after that they won't trust you anymore. In a good negotiation, both parties come away successful and get something they want.Another important point to keep in mind is that you have something the other person wants. They wouldn't take the time to interview you if you weren't potentially valuable to them. As in any negotiating situation, you should always be prepared to walk away if an outcome that you would be satisfied with does not appear to be available.
For this reason, every business person can clearly benefit from taking the time to advance their negotiation skills through a negotiating training course guided by experienced professionals. Superior courses are customized to your specific business area, and are tailored to help you learn negotiation skills suitable for the specific types of negotiations that you might soon be facing in the business world. Many of these courses offer the chance to follow up after the class is over and you have had a chance to assimilate all of the techniques learned. This helps to ensure that you can hone the skills you gathered in class and turn them into effective strategies that you can rely upon. The most popular method of learning these skills is through a class setting, but one-on-one mentoring is also commonly available.Negotiations require a great deal of preparation. As part of their negotiating strategy, good negotiators will try to identify any potential mishaps and prevent any damaging circumstances that may waylay the talks.
Crossing a rushing stream is easier if you take the time to locate the stones creating a path across the stream before wading into the water.The art of negotiating is most required when you are presented with an offer that is acceptable; but you don't know if it is the best you can do!When it's time to stop negotiating and accept the terms is an art of timing.While you do not want to needlessly leave anything on the table, you do not want to over negotiate a point and risk losing the whole transaction.
Understanding your business model enables you to know when you have acceptable terms. Knowing the other person enables you to know when you have pushed him as far as possible.How do you get to 'know' the other person in the time span of a negotiation?You do it by observing how he or she reacts/responds to various aspects of the negotiation. As you discuss terms, make offers, and react to offers made to you, carefully observe the non-verbal reactions of the other person. These reactions become the benchmarks you will need to evaluate how hard you have pressed them when the final offers and counter offers are being made.No conversation should be treated as idle conversation. If you are not studiously learning something about the other side you should assume they are learning a lot about you. Learn to mask or vary your reactions, especially the non-verbal reactions, to keep them off balance. Negotiating is in no small part bluffing.
There is a way that you can consistently create power for yourself whilst at the same time countering the power of your counterparts. If you consistently apply this technique, you will be rewarded with a significant improvement in the quality of the deals that you close. Much has been written about the power that can be found in negotiations. Here are some examples of the things that might provide you with some power:Status & position (you or your position may be held in high regard.Physical appearance (you may be very big physically or be deemed to be physically attrractive)Organisational position (your organisation may be considered powerful)Whilst the aforementioned are examples of some of the things that may confer power on you or your counterpart in negotiations, without a shadow of a doubt, the single most effective way to create power for yourself in negotiation is to create alternatives.
You will never have as much power in a negotiation as you will have if you are not restricted to one option only. If you can place yourself in a position where all you have to do is choose between options, then you will always ensure that you have both power and leverage in negotiations. The funny thing is that whilst we do think of other options when we negotiate we tend to make 2 key mistakes:We think about the alternative options too late in the negotiation process. Typically, we only start think about alternatives when we realise that we are in a deadlock or in a difficult position. The problem with thinking about alternatives late in the negotiation process is that we might find ourselves in a position where we have no time left and then we may be forced to accept an outcome we would have preferred to avoid. The key to successfully developing alternatives is to do so even before you start negotiating.
We do not really invest ourselves in creating alternatives. Whilst we may think about alternatives, often we do not put in place specific actions to develop these alternatives. It is very important that once we've identified possible alternatives that we actually actively engage in exploring these alternatives.If you want both power and leverage in your negotiations, then you will have no option but to explore fully all the alternatives available to you. As a matter of fact, you may even have to invent some alternatives if there seems to be no alternatives available.Remember that successful negotiations and creativity go hand in hand. Here's a word of warning though. You should carefully think about whether you should let your counterparty know about the alternatives that you at your disposal. If you are in a very competitve negotiation environment then there is not much harm in letting your counterpart know that you have many alternatives available. However, if you are in a collaborative environment, it may be best to not openly reveal the alternatives available to you as this may have a counterproductive impact on your relationships.
Negotiating is a contact sport. We are always in the game. To be effective you must be able to persuade others to listen to your arguments, consider your arguments, and decide that they want to help you achieve your goals.
They do not need to decide that you are right. They do need to want to help you.
There are three essential elements in personal negotiating:
1. Persuasion
Managers must motivate employees to do their jobs allowing the manager to succeed. Teachers must motivate students to study and produce homework and learn. Parents must convince their children not to play in the street, do drugs or otherwise step in harm's way recklessly. Whenever two or more people come in contact there will be some level of conflict.Resolving the disparate interests is a matter of establishing a commonality of interests.
People can be motivated by many things. Simple fear, the desire to be liked, a respect for the other person, or simple avarice and greed are examples of persuasive techniques. But there are many ways to persuade others to help you. They all play off the core psychological drivers that effect most people.In a relationship with a spouse, child or parent a consistent response, positive or negative, on your part will condition the other person to react in a specific way.
Parents, teachers and employers use this persuasion tactic of reinforcing positive behavior. Be aware that the opposite approach can work to your disadvantage. If you bully or abuse your spouse or peers you can expect them to begin to expect this behavior and react to it. Eventually your actions may destroy the basis for the relationship.Persuasion is not a bad thing. Everyone uses persuasion throughout their lives. If you are unable to convince others to want to help you, you will find it hard to achieve your objectives and maintain healthy relationships.
2. Compromising
Compromise, in a negotiation, is the process by which each party gives a little to get a little. It is the process of merging interests to yield a balanced outcome meeting the needs, not necessarily the wants, of the parties to the agreement.Relationships require compromise.
In order to get along long term both individuals must develop the desire to help the other achieve happiness and satisfaction. This is not easily achieved if you are always trying to win every argument, or every discussion, every fight.It is important to learn to help each other achieve your respective goals. To do that you need to take the time to understand the other person's needs and wants.
3. Trust
For any relationship to work there must be a basis of trust. Negotiations are colored by the natural inclination of each person involved to trust or distrust the other. This need to trust each other is essential for groups of people to function well together.If one person makes a habit of breaching a confidence, breaking his word or outright lying distrust will cause strife and distrust in the relationships.
This distrust, if left unchecked, will grow into resentment and ultimately ruin the relationship.Consider your future when contemplating breaching the trust with someone you care about. Is the quick victory really worth the long term impact?
Negotiating is an endeavor designed to add value by the exchange of disproportionately valued commodities.Barterers focus on the exchange of specific commodities based on their intrinsic value. Negotiators look at all of the aspects of a negotiation and seek to identify potential ancillary incentives or concessions that can be combined with the primary commodities to leverage perceived value and thereby create incremental value.It is important to know when to barter and when to negotiate. Consider the differences.
By creating perceived value negotiators are able to motivate others to do what they otherwise would be reluctant to do. Introducing other incentives is also a viable negotiating tactic to counter a power play. Without ancillary issues to thwart a frontal attack there will be little reason for the party with the most power or strength to compromise, AKA negotiate.Bartering exposes one to power plays. Everyone knows that he who has the gold makes the rules. The basic concept of negotiation is to expand the conversation from a direct exchange of two commodities, assets or services by offering something of modest value to you which may be perceived as very valuable to the other person. In return for obtaining this ancillary commodity or service the other person should devalue their position on the original item. In agreement, both parties come away with more value than expected thus creating incremental value.
Rule #1 of Negotiating: The objective of negotiating is NOT to win the negotiation. It is to achieve your goal or objective. Giving something of marginal value to achieve a important objective is prudent use of your assets.
Rule #1 of Bartering: The objective of bartering is NOT to win the exchange. It is to exchange your commodity, asset or service for something of comparable value with a minimum of effort and time. Getting a needed commodity or service without having to expend your time and effort is prudent management of your calendar.
In most negotiations we assume that the prime motivators are avarice and greed. It is the use of other, less obvious motivators that makes the difference between those who barter and those who negotiate. Negotiating has the potential of creating value from the process. It is like making 1+1=11 rather than 2. In your discussions you should always be on the lookout for what might be of value to the other person. This is best accomplished by taking the time to understand the needs and wants of the other party in addition to your own goals and objectives.
Simple bartering is appropriate in many situations where time and convenience trump the effort to try to negotiate a better price. At the grocery, for example, you simply exchange money for a can of asparagus. There is no negotiation because you are dealing with an intermediary who gains his or her benefit from very slim margins. They value you as a customer but only marginally. They hope to keep you as a customer by providing reasonable service, good products, competitive pricing and convenience. Your decision to purchase from them depends on how you rate the grocery compared to the competition; not based on how much you hope to negotiate off the price of a can of asparagus.
