Successful negotiation
“Always prepare yourself for a negotiating session. Preparation is the key to success.”
How to define your objectives
You have to formulate objectives that ask a lot, yet remain reasonable .you have to decide just how far you can go, without overstepping the limits of reality, since unreasonable demands can destroy the entire negotiation.
Be realistic – but be sure to aim high
Be sure to establish your bottom line with care, by evaluating all the advantages and disadvantages. As for money, be judicious in setting your base figure .you should take market trends into account, including market value, market research on the demand of a product, its predicted availability, etc. write all these figures down, and examine all the issues from as many different angles as possible.
The more numerous, varied and attractive your alternatives are, the greater will be your bargaining power, however strong the other party may be.
It’s better not to negotiate at all than to come to a badly negotiated agreement.
We sometimes hesitate to consider the worst, imagining that it might lead to a defeatist attitude. Some people even consider it negative thinking. But it is always important to evaluate all the possible alternatives, including the worst of them. In doing so you avoid unpleasant surprises. Positive thinking does not exclude being realistic.
Setting out your objectives
Get your objectives down on paper. Arrange them in order of importance. Keep your objectives flexible, it is most important always to keep your eyes and mind open for clues, which can help you evaluate whether or not; you are on the right track.
You should know the person with whom you are negotiating and the organisation, which this person represents.
Find out about the professional standing of a person you are dealing with.
You should ask yourself the following questions about the person you’ll be dealing with before negotiation start-
(1) Can he/she make a final decision?
(2) Is he/she skilled at taking the initiative?
(3) What is the scope of his/her responsibilities?
(4) If he/she has limited powers / what are the limits?
You should know while negotiating with the other person is it this person with whom you are negotiating or some other person who will take the final decision. The important thing is to find a way to state a question without arousing any ones anger or hurting their pride.
If you come to know that the other party has a preference for a certain kind of person, or certain age of person, you would then assign the roles according.
What about the company itself – the companies have their own weak points. They posses a personality, just like people with a particular way of thinking and set of faults.
So, how can you identify these weak points? Once again answer lies in obtaining as much information as possible. Seek out the people most likely to be able to provide with information and get them to talk, about anything, the weather, the personal life and so on. Inevitably they will let something skip that could be useful to you. But always be discreet, and don’t let that you are trying to extract information and turn someone into an information.
And remember that the more important the negotiation, the more in-depth your preparation and information gathering should be.
You get nothing for anything; you will have to give up something in exchange for obtaining something you want.
If you are able to detached yourself from your own points of view for a moment, and put yourself in the other person’s shoes, this is a very useful exercise. Someone you can think for both sides has a decided advantage in a negotiating situation; he/she is not concern only with his/her own perspective, but also explores things from the other party’s point of view, and sees twice as far, so to speak.
So what does the other party want? Money? Happiness?
Off course they do, just like everyone else! But more precisely, what is it that would satisfy them in this negotiation? If you know that, you posses much greater power.
Evaluate, what are the needs of the other person with whom you are negotiating apart from financial needs.
You can give the person you are negotiating with a minimum of benefits without spending a penny from you own pocket.
In negotiation there will be conflict you should know how to reduce conflict. Learn to minimize conflict.
Keep the following things in mind;
1. Study the interests and objective of the other parties and try to see things from their point of view.
2. During your preparations, determine with solutions, options and packages of options are likely to be advantages both to you and to the other party.
3. During negotiation, emphasize your common interests.
4. Try to be aware of your feelings as well as those of opposing side.
Establish points of agreement and disagreement now; make a list of all the advantages you posses in the situation in hand. Leaves nothing out: when played at the right time, even the weakest card in your favor cans results in substantial gains for you.
You should also study the legal implications of the negotiation about to take place well in advance.
All negotiations, even the most difficult, necessitate a certain degree of co-operation.
Never underestimate you own influences:
Negotiation is a living process, like everything living; negotiation is not entirely predictable.
Keep the following things in mind;
1. Study the interests and objective of the other parties and try to see things from their point of view.
2. During your preparations, determine with solutions, options and packages of options are likely to be advantages both to you and to the other party.
3. During negotiation, emphasize your common interests.
4. Try to be aware of your feelings as well as those of opposing side.
Establish points of agreement and disagreement now; make a list of all the advantages you posses in the situation in hand. Leaves nothing out: when played at the right time, even the weakest card in your favor cans results in substantial gains for you.
You should also study the legal implications of the negotiation about to take place well in advance.
All negotiations, even the most difficult, necessitate a certain degree of co-operation.
Never underestimate you own influences:
Negotiation is a living process, like everything living; negotiation is not entirely predictable.
Six strategic attitudes
1. Timing: - Do you have a sense of timing? What it comes to is simply saying the right thing at the right time, or making the right move at the right time, etc and it can make all the difference. It’s upto you to decide when the buyer is ripe and when that little extra something will be most effective.
2. Calmness:
It is a strategic attitude.
3. patience
Do not allow any of the pressures or the impatience you may feel inside to show, unless, ofcourse, you think that the other party is taking you for a ride. Always present a calm, patient exterior even though you may be dieing to conclude the negotiation.
Even if you are running out of time, you shouldn’t hurry. Examining the issues carefully and never jump in with an answer in the spur of the moment. It is better to break off negotiation all-together than to rush through a bad deal.
You will have your whole life to regret a terrible decision, so why hurry? And don’t forget that the side, which imposes its pace on the negotiations in fact, controls them. Patience is an essential strategic attitude. A negotiator worth his salt never looses control, and never raises his voice, unless, ofcourse doing so is part of the particular strategy, or an unalterable personality trait.
4. Apathy
Nothing or no feelings seems to bother you.
5. Rapid, Brutal Transactions
Even if you get angry during a course your negotiation, your anger should be measured, cold, controlled and calculated to have a specific effect. If you must get angry, do everything you can to take a short breather before exploding. Pretend you have a sudden headache – anything to get away for a few moments. When you lose control, you allow your weakness to show and you become vulnerable. The other side now knows how to get to you. In other words, they can manipulate you.
In the final analysis, if you manage to obtain an accurate idea of the other party’s bottom line, then to all intents and purposes you don’t need any other strategy. All you have to do is propose them in the proper manner for them to accept. The right time means power. Know where to concentrate your efforts.
The most important moment in any negotiation comes at the end of the discussions. You might have some alternatives, which the other party doesn’t know about and which weaken his or her position. For example, you may have another client or another supplier in the wings eager to make a deal with you. Introducing this information near the end of the discussion may help to reach a quick agreement. A person who is preoccupied, whose energy is being consumed by various problems other than the ones under negotiation, is not 100% available for the work at hand.
It’s hard to beat a team that’s well prepared, has high ambitions and a reasonable amount of bargaining power, especially if the team spirit is there. Have a small and effective group. Effective negotiation required intelligence, creativity and presence of mind not muscle and force. Try to develop a code, along the line of a rugby team, you signals to identify your instructions.
The leader should be more of a spokes person: the one who does most of the talking, making proposals, presenting arguments and counter arguments, refusals and agreements. Be very clear about which subjects are to be avoided and which are to be discussed. Also by whom and when. Try to have a negotiation when you are most energized i.e. in the morning. Avoid fatigue in negotiations.
In negotiation the other party may be trying to put you down by asking negative questions don’t react to them. While going for negotiations to some other place travel in first class compartments, avoid having fun at night which may hamper you days work. In negotiating while having lunch don’t drink any alcohol. Sugar complicates digestion and slows it down considerably. If the other party draws up the agenda, pay careful attention and make sure it suits your needs.
In negotiations if you have to make any changes it should be at the beginning of the negotiation. You discuss important issues at the last and start by discussing trivial issues. Trivial information which the other party gives can be useful or misleading so prevent yourself from trap to put you down.
Beware of crocodile smile people, who seems to agree to everything, and who said all for cooperation. This is the kind of person who could suddenly turn around and hit you with an ultimatum at some critical point in the negotiations, when he or she feels they have got everything they come out you, and before you have a chance to work out you side of the deal.
Be brief- avoid making long presentation. By talking too much, you risk boring the other party. Also, you may give away more information than is absolutely necessary, so speak as little as possible. If you must a long presentation, divide it into sections almost like the chapters in a book. So it’s always a good idea to think twice - or even three times - before saying anything, even if
It seems unimportant. Acquiring information is crucial in negotiations, so, conversely, you should always be in control of the amount of information you give away.
Present positive arguments. Ignore exaggerate demands
1. If the other party has a threatening attitude: counter - attack immediately by making an offer, which is just as exaggerated.
2. If the other party is just being overly optimistic: pretend you didn’t hear the offer. Instead of allowing inflated figure to influence you, make a counter offer which is reasonable which you can defend.
Give concessions step by step. But also do try to make other party aware of the value of each concession you make, so that you can use them to overcome any point of resistance, one by one. In this way you win, step by step. Great negotiator always proceeds this way.
In more competitive negotiation, refrain from using your strongest arguments until a crucial moment has arrived instead of wasting them in opening round. Don’t be in a hurry to make concessions. Take the time factor into account while in negotiation. Try to get some progress in the first few hours or the negotiation may not be useful. If you think that no progress is reach in the first few hours try to postpone it to some other time.
Pacing - don’t try to move too fast, looking for an easy victory. Even if things seem to be going smoothly, don’t hurry. Above all, don’t give the impression of wanting to speed things up towards the end. The other party may think you are trying to bully him or her in to making a hasty decision. Take notes of concessions and proposal made. It helps in good conclusion of negotiation.
Don’t exhibit your enthusiasm-
(1) There is elementary, once an extremely fruitful and co-operative negotiation is over, both parties may wish to express their satisfaction. Before a conclusion is reached, you should never demonstrate your affection or satisfaction. Wait for the right time and place for the following reasons.
(2) If you appear overly satisfied you risk arousing the other party’s suspicions she or she may wonder if you wouldn’t have accepted a lower price.
(3) If you are too enthusiastic about the other party’s product or proposal, he or she may be tempted to raise the status, or forget about a concession or offer made previously.
Even if you think you have made a great deal, you still shouldn’t exhibit your satisfaction.
Avoid making judgements- try to be as open minded as possible, and avoid making value judgements about the persons you are negotiating with.
Put yourself in other party’s shoes – if the other party thinks he or she is not going to gain anything he may oppose you, so you both should gain in a negotiation.
In a negotiation you don’t have to fight but reach to a conclusion.
Expressing disagreement-
If your opinion differs from that of the other party, you should be able to express your disagreement without antagonism. There are various ways of doing this.
(1) You can explain the reasons for your disagreements. You could refer to the limits you have to respect (budget, authority, time pressure, etc)
(2) Any effort to reaffirm areas of common agreement, which have already been established will make it easier for the other party to accept your differences of opinion.
(3) Qualify your objections: you may reject certain points of a proposal while accepting others. These opens the door to possible compromise, which would have remained closed if you rejected the proposal entirely.
(4) If you have to say no, do it gently, without being aggressive.
(5) Reject the proposal, not the person making it. The other party should not be made to feel that there’s anything personal about your refusal.
Always remain calm – avoid personal attacks and injurious statements. Don’t let these cheap shots disturb you. Never raise your voice, even if the other party is shouting at you. It’s not your responsibility to educate people, and it’s too bad for them if they don’t know the difference between a negotiation and shouting match.
Silence is golden – Silence is extremely important when a proposal is being made. Most people can’t stand silence. So, if someone makes a proposal and you don’t say anything or if you pretend to be thinking about it, they may interpret you silence as a sign of disapproval or lack of interest, and will, in many cases, add other concessions to the package to make it more attractive.
Some negotiators use the technique of remaining silent for precisely that reason – to gain more concessions. If you outline a proposal and the other party doesn’t say anything, what do you think? You assume they are not interested, that they want more. You tell yourself that their silence means that the proposal isn’t good enough and that you shall have a better offer. Because of your uneasiness about the other party’s silence, you need to modify your proposal. So they have achieved what they want without saying a word.
Negotiate with their friends and spouses – always convince the other party that they are excellent negotiators. It is important to be creative: the more the little extras and bonuses, and special concession add up, the more attractive your offer becomes. It’s the whole package that counts, and not the value of each separate item.
Dealing with animosity-with or without cause, the other party may develop a considerable amount of animosity towards you. It’s usually better not to react in kind –doing so would only worsen the situation and make it more difficult to reach an eventual agreement. Let the other party express his/her grievances, all of them, without interrupting. Just allowing the other party to give his/her negative feeling out in the open will do a lot of help to smooth out the problem.
In negotiations when the other party shouts at you and is not ready to listen to anything, don’t submit. Get up and walk out, saying you shall be ready to resume negotiations when they have calmed dow
Learn to show your teeth –
Most people as soon as they hear the words judge, lower or court case, tends to become a little more careful about what they say. Fear of legal reprisals as its positive side!
Be natural. Practice maintaining a neutral, detached attitude, as if you found the other party abusive contortions boring. If you are being threatened with some kind of lawsuit, you can react in the same way – by referring to a lawyer or judge who is on your side.
You must not admit a concession without gaining another in return.
In Competition
1. Question the other party – It is some time said that power belongs to the person, who asks the question.
2. Carryon regardless of problems – act as if you didn’t hear, as if what the other party said wasn’t very important. This is not a very, sophisticated technique, but it may be all you can do in an extreme case.
3. Listen! – Make sure you have properly understood what has been said to you, and take your time before replaying. An attempt at a reply is always better than silence. This is why you must make sure you have really understood what the other party is saying.
4. Relax! – This is not the moment to be tense or nervous or to strain you to listen harder. When you are nervous, you are more likely to here what you want to here, jump to conclusion and to think the worst of the other person.
The idea is that as you move forwards and backwards you have more chance of getting out than if you stop and start. The same goes for argument. If you come into conflict with the other party on a particular point, avoid digging yourself into a hole. Pass on to another point which is easier to sort out, come back to the contentious questions, as soon as you start to get step, pass on to something else. In other words try to make gradual progress in the negotiation.
As soon as you have made some good progress, bring up the controversial point from a new angle. Approach it in a different way. Put your creativity to work. Do not allow the discussion to stagnate. It much better to move on a little and come back to the point afterwards. And when you do that, avoid basing your argument on a single issue.
Avoid making concessions at the start of the negotiation, for example, you are not likely to get anything in return.
Always emphasize the value of the concession you make: this will allow you to ask more in return. And, on the other side of the coin, you must always try to play down the value of any concessions made by the other party.
If you really can not concede
1. you have almost reached an agreement therefore you can count to some extent on the principle of human inertia working in your favour!
2. If things break down, the other party has to deal with someone else, and who knows - the next may be worse than you are!
The best and most lucrative – business relationships are founded on an ability to give and take concession on both side.
Learn to stone walls
Actually you can be flexible and cooperative on some issues, and inflexible to others. Your commitments and the defense of your position become all the more reasonable when the other party realizes that they aren’t due to a mean streak in your character or to any bad will on your part, but are your real limits simply stated, some issues are negotiable, others aren’t.
To be affective you commitments concrete, visible and credible.
If you to modify your position - if you find that the other person is stonewalled and the negotiation can not conclude fruitfully you can modify your position. If you decide to modify your position you must be able to break your commitment without appearing to contradict or demean your self. If you do you shall have trouble being taken seriously in future. You must never appear to be caving in under pressure.
Inform the other party that you have decided to change your position in the light of some new information. Use some change in the other party’s position as a pretext to modify your own. Change the data you already have: say you have just been given some information, which shared some new light on the situation. Pretend that you misunderstood the other party’s initial position to allow you to modify your own without loosing face.
When you find yourself in a position of weakness -
1. Never reveal you position.
2. Do all you can to negotiate on your home territory.
3. Pay special attention to the quality of your presentation and to any tactics that enhance your image.
4. Don’t pretend to be preoccupied or disinterested.
5. Avoid open conflict at all.
6. Try to create an informal, friendly climate conducive to cooperation.
7. Bluff with care.
8. Be persevering and don’t give anything without a fight.
Strategic Steps To Enhance your Power –
1. Determine your objectives with care.
2. Differentiate between your desires and your needs.
3. Evaluate the other party’s objectives, also separating their needs from their desires.
4. Aim to satisfy your needs before your desire.
5. Be prepared to make concessions as far as your desires are concern.
6. Be firm when negotiating your needs.
7. Never give up one of your needs in return for one of the other party’s desire.
CLOSING THE DEAL
The five indicators of success
1. Counter – arguments fade out. They become less frequent and less intense.
2. The difference between your position and that of the other party grow smaller.
3. The other party starts asking about concrete details like delivery date, mode of payment, samples, final budgets etc. this means that the project is becoming a reality in their mind.
4. Your are given a personal invitation (to dinner or to a party etc.)
5. An offer is made to draw up a formal contract. This means that the decision to agree to a settlement has ripened sufficiently to warrant the investment of time and energy, which will be necessary to draw up a formal contract.
How to close effectively
1. Review the points which have been settled and which points to an imminent agreement.
2. When concluding negotiation make sure not interrupted. The moment when the other party must make a decision is very delicate. Third parties who have not been involved in the discussions should not be included at this stage, since they might say or do something to incite further argument and show off strength.
3. Keep a trump card in reserve. Always make sure to have some last little argument ready, in case the other party hesitates, when you would use it so that decisive step will be taken.
4. Ask the other party if they are ready to finalize the agreement, while avoid questions which could illicit a negative response. Say something like this “what do u think about finalizing the agreement before we break for dinner?”
5. Keep quiet. You have said everything you have to say, done everything you have to do; you have nothing more to add. In many cases the silence will be broken by the other party’s outright consent or by a question about some detail. Your reassuring response will be enough to smooth out any remaining doubts.
6. Stay calm- don’t get excited. Be natural.
7. A simple and direct way of getting the other party way of getting the other party to make a commitment when you feel they are already won over is to present a contract or a letter of agreement, indicating where they have to sign.
8. Once you have reached an agreement, don’t waste any time. Without appearing too hurried (which could worry the other party) move on to the final phase of giving definite form to your common decision. Get the agreement in writing as we have already mentioned; it’s in your interest to draw up the contract yourself.
Is everybody happy?
Heated exchanges sometimes occur during the course of negotiations, which can be sometimes painful to swallow. Try to patch up any wounds, especially if you are the one who has been somewhat aggressive.
If you leave someone with the impression of having been let down, it won’t do much for your reputation. So make sure that no one’s image has been trampled on or bruised.
The important thing is that all parties should leave the negotiating table in a positive frame of mind.
If you conclude on the spot –
(1) The other party is still under your influence.
(2) Your powers of persuasion are most effective.
(3) Both you and the other party save time.
You can’t win all your battles. Some will inevitably leave a bitter taste. What counts is the combined result of all your negotiations. In some cases you shall realize that it’s the other party who has reasons to complain.
List your strong and weak points and don’t overlook your faults if you want to improve next time around.
Learn what you can from the situation, and resolve to do better the next time.
Be professionally prepare yourself.
For successful negotiation –
Promote your project.
If nobody knows you have an extraordinary project for sale, you won’t be able to sell it, make a product known. Generate interest through the media and through any other interested person or organizations you can.
Feedback is essential for effective negotiation;
-Different type of feedback
1. Think about what the other party said while you are speaking.
2. Quote the other party.
3. Rephrase what the other party said in your own word.
4. Summarize the important point of what the other party said.
The importance of feedback is it helps eliminate grey areas and misunderstanding.
