When people think of negotiating they think of conflict, being competitive and winning. We’ve seen films of actors acting tough when they negotiate, or Dragons in the Den being tough. But it doesn’t have to be this way...
Haggling is not negotiating
A typical negotiation is one person starting high, the other starting low, and meeting somewhere in the middle. This is not negotiating. They are haggling.
This is still a valid form of resolving a conflict. It’s just that negotiating takes more skill. The difference is that one is just about price, whereas the other is about identifying and trading things, as well as price.
So the first tool in negotiating is to know that most people don’t negotiate, they haggle.
Ask questions. It is that easy and that hard to do. Most people understand open and closed questions (where you get back a yes or no).
The reason questions are so important in negotiating is because they are the key to the second stage. Watching a negotiation, you will see people jump straight to the proposal stage. By missing stage two, which is ‘Exploration’, they form a proposal that the other person just doesn’t want.
In my experience marketers have made better negotiators than salespeople. This is because they are inquisitive and curious, whereas salespeople get straight to selling. By asking questions you uncover what the other person needs. Yes a good price, but what else?
What if I was to tell you that there are 10 types of questions? Open and closed questions are just two types. Just search ‘MBM Ask Questions’ to read the different types. The second tool is to be curious, inquisitive – a detective or a doctor. Try and find the pain.
Know your variables
The key piece of preparation is knowing your variables. Without these the negotiation will stall. Variables are the grease that keeps the wheels of negotiation moving forward. If you do not have variables you will be left haggling on price.
Let's say you're buying a car. There are two kinds of variables – those you want and those you are prepared to give away.
To start with you make a list of the variables you are prepared to give. These might be 5% more than your budget, pay cash, and refer the dealer to your friends.
You also make a list of the variables you want, which is always easier, but you do need a balanced list. They could be 10% price reduction, free servicing for a year, and a tank of fuel. The more variables you have on both lists the less you’ll get stuck when you negotiate.
Remember to ‘conditionally concede’. This is a negotiator’s term for make sure that you get something in return if you give something. For example, if you offer to pay in cash what did you get in return for giving this?
I believe anyone can negotiate. Using these three tools you can win more negotiations than you do right now. You just need to start using them. Get negotiating.
Darren A. Smith is founder of Making Business Matter