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How to be a smart negotiator!
Negotiation is the “art of friendly persuasion” – the ability to sell yourself and your ideas.
Study after study reveals that negotiation is one of the top three skills in life and on the job. Great negotiators become key contributors to any business or organisation.
The way you conduct yourself in a negotiation can dramatically the outcome.
Smart negotiators know exactly what they want and how to get it. During negotiations, their communication is crisp, clear and concise. When difficulties arise, they have the ability to make the necessary adjustments to achieve winning solutions.
Here are 5 powerful principles for being a smart negotiator:
1. Don’t – unless you really need to
Always evaluate your needs honestly and buy/sell hard. If possible, never negotiate, as it always requires compromise – which costs.
Some people are tempted to negotiate too soon. Work out your ideal position and don’t be afraid to clearly state it straight away.
2. Don’t negotiate with yourself
People regularly try to second guess the other party and in doing so minimise their own expectations.
“Ideally, I want to be paid £10,000 for this but maybe they don’t have that much. If I ask for £10k or the nearest offer, it might sound less aggressive.”
This is the start of negotiating with yourself! If you start reducing your expectations from your ideal before you even see the “whites of their eyes”, you will always end up with a lesser, compromised deal. Start out with your ideal and wait for the other party to ask for a lower figure.
3. Don’t accept the first offer
There is almost always a different (better) offer hiding behind it! Don’t forget they will be instinctively (or professionally) trying not to break Tip 2. Their opening stance will obviously be leaning towards their ideal position – with probable room for manoeuvre.
Also, be aware, that you can sometimes annoy the other party by doing this. If you accept too quickly, they will think they should have asked for more, resulting in their perception of a Lose/Win outcome (i.e. they lost, you won.)
4. Don’t make the first offer
(If you can help it!) It leaks your bottom line straight away.
Smart negotiators know that you’re usually better off if you can get the other side to commit to a position first. Why?
- Their first offer may be much better than you expected!
- It gives you information about them before you have to tell them anything.
- It enables you to bracket their proposal. If they state a price first, you can bracket them, so if you end up splitting the difference, you’ll get what you want. If they can get you to commit first, they can then bracket your proposal. Then if you end up splitting the difference, they get what they wanted!
So always ask the other party, “What is your ideal or target price?” If you are backed into a corner – or an “I asked you first …” situation occurs, make the offer under protest and don’t break Tip 2.
State your ideal position (i.e. your list price if you’re selling or your lowest target price if you’re buying).
5. Don’t talk so much – listen
Good negotiators lead by listening, not talking. Let the other side ramble on. Even if it’s frustrating, you should bide your time and bite your tongue.
Continued silence will provide you with an opportunity to identify their true position by their leaked messages. Also, make sure that whilst you are listening, you don’t fully reveal your own position and hand them the advantage back!