Feb 7, 201308:07 AMOpen for Business
with Jody Glynn Patrick
Four (easy) tips to better negotiation skills
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I felt a parental obligation to civilize my children at an early age, and one of the first hard lessons was sharing. This lesson was best taught by letting one child divide the favorite food or candy into two piles, and then letting the other child have first choice of which pile to claim.
If only life-altering, adult negotiations were handled so easily, right? During a long tenure as a radio talk show host, I interviewed many law professors, M&A experts, and other professional negotiators for advice on complex types of negotiations – and guess what? Negotiating isn’t rocket science. In fact, we identified four simple principles to help you with life’s harder negotiations, too.
#1: Successful Negotiation = Conversation. You know what you want, and you have, in your mind, determined a fair price or cost for that. Ready to fight for it? Experts advise that, instead of arriving in a combative spirit, you take a mental chill pill before taking a seat at the bargaining table. The potential for conflict is high, yes, but if you can respectfully listen to others’ opinions and respect their right to value a product or service differently than you do, you’ll be more centered in your expectations, remarks, and observations. Contribute to, and insist upon, a respectful atmosphere and you’ll make real progress much more quickly and easily. If you can’t personally handle it due to high emotionality or a personal sentiment toward the other party, you’ll have a better outcome if you send in an agent – an attorney or a professional negotiator – to represent your interests.
#2: First + Firm = Best Outcome. As seller, you throw out “a ballpark range” of $1,000-$3,000. Guess what? Your buyer begins negotiations under $1,000 because you’ve signaled you want at least $1,000. By definition, a negotiation is about forfeiting a “wanted” price for the “must have” price. Had you suggested a set amount instead ($3,000), you would have anchored the discussion, and the result would have favored you. The range between a “good” price and a “must have” price is your legitimate playing field. Begin with a slightly inflated good price and offer a clear explanation of why that is fair; then be prepared to negotiate all the way down to your “must have” price, but no further. If a concession is required and remotely possible, make it, but retain something in return: “I can deliver ‘X’ for that price, but unfortunately would have to take ‘Y’ off the table, if that’s your best offer.”
#3: The one who cares the least = the most powerful negotiator. Personal power is a relatively fluid two-way circuit in any healthy relationship. But when it comes to negotiation, the one who can walk away from the situation with the least emotional and/or financial fallout has the greatest personal power. How much skin do you (versus your opponent) have in the game? If you are the more invested party, again consider hiring a third-party negotiator on your behalf to better level the negotiating field. If you can’t afford that, develop a realistic “Plan B” before you sit down at the table so you have a back door. (Continued)