Winning negotiations may not be what you think – or had hoped it would be.
Are you hoping to learn the MMA cage fight style of negotiations – with a raised fist, victoriously roaring over the opponent, a semi-conscious, bloodied pulp, beaten into submission – or the Jedi mind trick style of a quick and painless process for getting all of your terms met within the span of five minutes?
I have experienced a number of tete-a-tetes ranging from the purchase of a $100 service to the terms in multi-million dollar contracts. Here are the common characteristics of winning negotiations:
- Have a clear understanding of your goals
- Have a clear vision of the bigger picture
- Know your advantage over the alternatives
- Keep a creative, open mind
These four criteria apply whether you are the vendor or the customer. Now some will say that you succeed with negotiations when you create a win-win and approach it with a positive attitude. Not always.
I am a big believer in both the win-win scenario and a positive approach, but this assumes that there is a need for an on-going relationship. What if your relationship doesn’t go beyond a one-time occurrence?
With the one-time relationship, it can benefit you to play hardball to the point that you can achieve your goals. For example, think of the scenario of buying a home. What advantage does either party have by creating a win-win beyond what may be necessary due to market conditions? Often the market will favor either the buyer or the seller. If you are the buyer in a buyer’s market, why give away this advantage? If you really want the home, play hardball to the brink of the seller refusing your offer.
So besides that side note, let’s get back to the four primary characteristics of winning negotiations.
Have a clear vision of your goals.
This may sound simplistic, but sometimes the goal isn’t only about getting the best price. Goals may include pricing and service for the current need at hand, but can include future needs as well. The customer in the negotiation may be willing to concede on current pricing in return for premier service, favorable pricing in the future or to be first in line for new releases of next generation products.
Having a clear vision of your goals and the other party’s goals will allow you to quickly build a positive relationship, easing the process for accomplishing the tougher tasks. Start with the goals that you can quickly concede on in order to create a positive environment of give and take. By conceding on some terms, you create a positive environment and open the opportunity for the other party to agree to your needs.
Have a clear vision of the bigger picture.
What does the other party possess as possibility for you? Are they a customer that represents future profits, prestige and referrals? Are they a vendor that has products and services that benefit your business on an ongoing basis?
It is easy to see the future positives that a customer represents. However, many people fail to see the bigger picture when they are the customer making demands of a vendor.
Hopefully, you have taken the necessary step of verifying whether the supplier can support your needs. If so, they have something of value that you require. If you have future needs for their products and services, it doesn’t benefit you to negotiate out any and all profit for them. They need to make a profit to survive. This sounds obvious, but successful negotiations are not defined as the vendor giving and the customer taking. By seeing the bigger picture of your future needs, you will see where you can create the win-win and build a prosperous relationship for the both of you.
Know your advantage over the alternatives.
When you get down to the stickier points of a deal, the best leverage that you have is knowing your advantage over the alternatives. This applies whether you are in the role of customer or vendor. Each customer and vendor is unique. What do you offer to the other party that if negotiations go awry, they can’t fulfill the same way elsewhere? If you didn’t have something that the other party desires, they probably wouldn’t be talking with you to begin with. Use your alternatives to your advantage.
Keep a creative, open mind.
If you are a strong negotiator, you will do your homework prior to sitting down at the table. However, there is always the possibility that your due diligence didn’t reveal an alternative solution to satisfying your needs. Keeping an open mind and applying creative thinking during discussions can sometimes create a better outcome than what you had planned for in the beginning.
And although not always necessary for winning negotiations, but a good policy none the less to practice is to try to complete the negotiations on a positive note – even if you believe that the relationship will not extend beyond the current deal. You never know what future benefits the other person represents or what negatives they are capable of if they feel wronged. Ending on a positive note opens the door to future dialogue. You just may find that you are thankful for the opportunity to re-negotiate in the future.
All The Best,
The Solopreneur’s Guide