Negotiate: (verb) To confer with another so as to arrive at the settlement of some matter.
In a sense, all of life is a negotiation.
You are always negotiating in some way. When you drive from one place to another, you negotiate through traffic, letting other people get in front of you and you getting in front of them. When you go to a restaurant you negotiate, to get a table and then to get the kind of table you most like. You negotiate all the elements of your work life and all the things you do or don’t do. You negotiate prices, terms, schedules, standards and a thousand other details all day long. The process is never ending.
It is not really a question of whether or not you negotiate. The only question is, “How good of a negotiator are you?” If you want to get things in life faster and easier then you need to be a better at negotiating than the other person.
How many times have you or heard someone say, “I am not good at negotiating.” The reason they feel this way is that negotiating is a learned skilled, just as learning how to ride a bicycle. They may not be good at negotiating because they were never taught how to negotiate. Learning how to be an effective negotiator takes time and practice.
Why does everyone hate to negotiate with a car salesperson? Because the salesperson has been taught how to negotiate and they usually have the upper hand in the discussion. Now, if you were trained as they were on how to negotiate and understood the rules of negotiating, would you dread negotiating with a car salesperson? Probably not.
The primary purpose of negotiating is to come to an agreement between two or more parties and then fulfilling that obligation. That’s it. Simple right?
Your ability to negotiate will for yourself and your company will make an enormous difference in the quality of your sales and the degree of profitability you achieve for your organization. So being an effective negotiator will make a great difference in your life.
There are many rules of negotiating.
Rule #1) This is a shocker – AVOID IT! Yes, that is correct, avoid negotiating. If the other party is good at negotiating and you feel you’re not, then why go into a negotiation with that attitude? You’re not going to fair to well on the outcome.
Rule #2) Delay negotiating as long as possible. You must first have a desire to buy before offering concessions. Never use negotiating as a substitute for salesmanship (value).
Rule #3) Negotiating is a sales tool – use it as one. Early concessions have very little impact on the deal and in fact, decrease the attractiveness of your product or service. Early concessions create an appetite for more & bigger ones later and the first person to concede will usually concede again & again.
Rule #4) There are several requirements for negotiating. All parties involved must first have the authority to negotiate as well as to uphold what has been agreed upon. Many times, you may enter a negotiation, come to an acceptable outcome only to find out the person you have been negotiating with must get someone else’s approval.
- Negotiate only when it’s necessary to get the sale
- Negotiate to build a long-term relationship
- Negotiate to find a way to satisfy both parties
There are only six outcomes of negotiating.
If the outcome is NOT a Win/Win or No Deal, then end the negotiation. You may win in a Win/Lose outcome for now, but the party that lost will not be doing business with you after that deal.
- No Deal
Finally, always prepare to be successful at negotiating. Remember negotiating is a skill that can be learned, and you need to prepare and practice before entering a negotiation. Some ways to prepare are;
- Lawyer method: Prepare your position from the other parties point of view.
- 20 Idea Method: Write out 20 benefits for the other party and when negotiating present those ideas.
- Research the other party: Many times, this simple step is avoided. Find out what they are looking to gain from the negotiation.
- Get the fact before you enter a negotiation: Make sure you are clear on why you are entering the negotiation with the other party and what they are willing to offer to enhance the negotiation.
- Ask the customer for the information you need to negotiate effectively. Pretty simple, but how many times have you just asked the other party for their information.
The next time you must enter into a negotiation with another party, be prepared, practice, do your research, qualify them to make sure you are dealing with the decision maker, research them (talk to some of their customers), and only accept a Win/Win or No Deal as the outcome.
Good luck negotiating.