Although most people don't like to admit it - everything in life is a negotiation and even more so in business.
In terms of business - poor negotiation skills can take your business from hero to zero very quickly or be the key in you losing key customers. Although negotiation strategies appear to be common sense, most people get too wrapped up in the emotions of the process and ignore what they know to be true.
To have a truly successful negotiation, you need to cut emotion, and the concept of luck and magic, right out of the equation.
Here are 5 basic but key principles to apply and perfect to have the most successful negotiation possible. Remember to always keep your end goal in mind and check your ego out at the door.
Tip # 1 - Preparation
Determine your desired outcome before you start.
It's always best to get to know as much as you can about the party you will be negotiating with. If this party is normally the key part of the team - they will have done other deals, so try to talk to business associates who have dealt with this person before. Experienced negotiators normally have developed their own style and patterns as to how they operate in a negotiation.
Ensure that you and your team are well prepared to handle any curve ball that may come your way before the actual negotiation. A good idea is to role-play this negotiation before the actual event so that your team is comfortable with each other and know what role they each play in the negotiation. Always make sure that you and your team know your numbers and what the end goal is that you would like to achieve.
Tip # 2 - Develop your Strategy
Reverse engineer your end goal and know your worth
Develop your strategy with your end goal in mind. Play out the various scenarios using the following philosophy :
What's the best, worst and most likely case scenario that could happen? Develop a strategy/ game play around each of these scenarios and know what your response will be in each scenario. Don't allow yourselves to be caught with no Plan B in place, no matter what is placed on the table during the negotiation. You know your worth and what it is you want to achieve.
Make sure before the negotiation starts that the other party is fully authorised to make binding commitments, otherwise the negotiation serves no purpose. You need to have the main stakeholders in the negotiation.
Tip # 3 - What can you Leverage
Know your strengths and use them
Research your market and know where you fit into the food chain. If your company is the sole supplier of this service or product, you have huge leverage in the negotiation or if you have the ability to supply where there is a large demand - this also increases your leverage in the negotiation.
If the above is true then establish a strong foundation early in the negotiation that demonstrates your knowledge and expertise in the subject matter. This will serve to cement your credibility early on before your opposing party has time to establish theirs.
Tip # 4 - Create a win-win situation
Ensure all parties feel as if they are winners, even if they lost
During the negotiation, try your utmost to determine what you believe they want out of the negotiation and work that knowledge into your game plan. Balance this against what you are hoping to achieve and where common ground could be found. When constructing your offer, be creative in trying to satisfy some of their priorities as far as possible as well. This will go a long way to making them more amenable to accept your offer.
Tip # 5 - Closing the Deal
The final agreement will form the basis of the deal - ensure it covers the full scope of the deal.
During the whole negotiation always keep in mind that it requires a sense of timing, creativity and the ability to anticipate the next party's moves. You need to keep in mind that each step will take both parties closer to the final agreement and what's left finally will form the actual agreement. Negotiation is really a process of give and take from both sides till what is left is agreeable to all concerned.
Make sure that the final offer on the table covers the best of what each of the parties wanted to achieve and everybody wins, even if they lost.
Always remember that the most successful negotiators are professionals that know their business inside out and don't let their egos and greed determine the final outcome of the negotiation.