Today in business you don’t get what you ask for– you get what you negotiate. You see, everybody asks “What’s in it for me?” So for you to get what you want, you’d better expect to answer that doubt for the people you do business with by learning negotiation know-how.
I have had plenty of success in negotiating opportunities lately, particularly since I am not known as an expert negotiator. I have negotiated raises that were 5 times what was proposed, negotiated an executive level job worth thousands beyond the job description with triple the job security, and bartered online services worth hundreds of thousands of projected income for my company. How did a novice like me achieve these things and learn how to negotiate in business? Here are 10 steps that I use for effective business negotiation:
Know What You Need … and What They Want
How plain this sounds, but how difficult to carry out. You need to know exactly what it is you want from the deal or negotiation. Don’t wait for the other party to state their position to determine what yours is going to be. If you want a raise, how much? A commission for click-thru sales, what percentage? Write these things down as a wish list of all the items you do want before you begin discussions. If not you may remember the deal and find you were persuaded into accepting terms for things you didn’t need at all. In order to counter effectively and find how your offer matches the other party’s needs, you first need to know what those needs are. Again, be very specific in terms of dollars, percentages, times, etc. Savvy negotiators will take their specifics and read between the lines to find needs not stated, emotional issues like political victories within the organization.
Check Yourself
Impatience on your part can make you an amateur and wipe out a deal. Ed Brodow, author of “Negotiate with Confidence”, says that your patience can be devastating to the other person if they are in a hurry. The opposite is the same for you. Conceal self-imposed deadlines that reveal to your adversary that you might be subject to the clock. “Never accept the first offer”, says Brodow. “They will be more satisfied if you reject the first offer– because when you eventually say “yes,” they will conclude that they have pushed you to your limit.
Know Your Fallback Point
One of the biggest problems with auctions for the buyers is that people get whipped into an enthusiastic frenzy during the process and bid, and ultimately purchase, something at a much higher price then they would have ever considered feasible. They forget to know their top bid. This can happen in negotiation too. You must know your fallback position or cut-and-run point. What’s the worst amount you will accept?
What Hill Will You Die On?
In any settlement you will need to make concessions if for no other reason than to allow the other party to feel they have gotten something from the negotiation. Decide in advance what are the key compromises you will not make– what’s really important to you. Don’t die on a hill that isn’t worth dying on, folks. If you’re being offered a position as an executive in a company, is the monthly car lease an important enough point to be a deal killer?
Match Advantages to Their Needs
For you to expect anyone to give you anything, you know you have to provide quality benefits to him, whether in a verbal negotiation or a written pitch. Now you know what he needs, so examine your list of characteristics for yourself or your company, and seek matches to the needs of your negotiating opponent. Professional negotiators will find unsatisfied wants that the other party has that weren’t stated and point out how doing business will satisfy them. For example, I recently made a deal on behalf of an online business portal with a national data provider. The company allowed us to upload data that is normally purchased on a subscription basis for access to the expected web traffic on the portal. This traffic means click-thru sales, which we even negotiated a sales commission on!
Pursue Win-Win Deals
This is a mindset that should occur for you to be successful today. There are no more winners and losers in discovering consultative sales or negotiations. There must be winners on both sides of the table, so look for gaps that you can fill and look how the other side can fill your gaps. The fact is that every firm and every person is different with different needs and wants. Use that to your advantage. Something that has little cost to you in concession may be a major win for the people you’re doing business with. Let them have it, because the in-kind situation applies for you. Free software is an example. Software costs little to reproduce, so therefore the marginal costs to a software company are tiny, but the value of a package could be immense to the right party. Everybody wins if all sides keep the needs of their opposition in mind instead of thinking about defeating them. Opportunities will surface that you never imagined possible.
Find Workable Compromises
This reverts to a prior point. Certain things you cannot live without, but others are flexible. Know in advance where you can be flexible and just how flexible you can be (Gumby or Plastic man?). Any time you give in on a point in one area, such as terms of payment, it is perfectly appropriate and expected that the other party will yield somewhere else. As long as you keep from flinching on your critical negotiation goals, you can find compromises that allow both sides to meet together in the middle without losing anything of real value.
Don’t Underestimate Your Worth
This is a basic sales mantra that I follow, and it occurs daily when people concede on price or terms without reducing the scope of service or demanding equivalent concessions. If you are willing to take a hit to your bottom line in exchange for nothing, your credibility goes down, now and in the future. If you do it once it becomes expected. On top of that, it triggers mistrust, because you just proved you did not give your best deal from the get-go. You’ve set yourself up for the proverbial spitting for distance contest, subjecting your side to future coercion for unjustified concessions. Any time you surrender anything in a negotiation, make sure that you show value becomes a little less from your side or demand additional value from their side.
Stay the Course
If you offer a good pitch and you know it, stand by it! Don’t let fear, condescension from your opponents, or chiding language make you back off from your position. Let her blow off her steam, telling you how absurd your argument is while proving nothing, and then re-emphasize how she wins by collaborating with you. Put the ball in her court by asking her to prove there is no value in your offer. It’s easy to throw stones. It’s much more difficult to prove those airborne stones were deserving of flight. Don’t back down and you won’t fail the final test of the negotiation.
If you cannot get a good deal, follow negotiation expert Brodow’s Law: “Always be willing to walk away.” Other deals are just over the horizon, so don’t get too attached to this one.
Document It!
You’ve got what you want and so does the other guy. “Look honey, it’s a win-win situation.” Great! Get it on paper before you pat yourself on the back and get it to the other guys for sign-off. Why? First, tomorrow his memory may remember something differently. Second, many times negotiators occur between the leaders of organizations or people who guide the operation but have no legal background. As soon as the lawyers and analysts get ahold of the agreement, you can bet that items will be questioned today that were a slam-dunk yesterday. Oh yeah, it’s true.
The next time you’re in a situation where there is give and take, remember that a negotiation is happening, whether you call it that or not. Apply these ten little guidelines to your situation and watch with marvel as you get that pay increase, secure that new job, make that next sale, or get that super deal. Then go out to your favorite restaurant and reward yourself with a great dinner for getting what you wanted– on you. You deserve it.
About the Author
Karl Walinskas is the CEO of Smart Company Growth, a business development and cost management consulting firm for small to mid-size enterprises, and Virtual Mastermind, an online network of Mastermind Groups for small business owners . He has made a career of leading, inspiring and raising the game of small business people. He is author of numerous articles and the Smart Blog on leadership, business communication, sales & service, public speaking and virtual business and Getting Connected Through Exceptional Leadership, available in the Smart Shop, Amazon.com, or Barnes&Noble.com. He can be reached at [email protected].