Negotiation is an integral part of financial work. Whether you excel in interpersonal communication or prefer analyzing numbers on your own, negotiation is inevitable. Mastering the logic behind negotiations and enhancing relevant skills will help you achieve success at the negotiating table.
Many people view negotiation as an art, but a successful deal also has its logic and objective elements. Negotiation is a game of give and take, but ultimately, you must either accept or reject an offer. So, how can you ensure that your offer comes out on top?
Negotiations can quickly become tense. Everyone tries to control the situation, making “winning” the prevailing mindset.
At times, you may feel discouraged. But remember, if you feel this way, so does the other party. It’s important to separate personal issues from the problem – deal with emotions and personality separately from the substantive issues in the negotiation.
You need to develop emotional intelligence to monitor and identify various emotions that arise during negotiations, including both positive and negative ones.
With high emotional intelligence, you can also discern the essence through language. Once you understand everyone’s feelings, you can calmly proceed.
Having in-depth knowledge of the product or service you’re negotiating to purchase will put you at an advantage. Salespeople will highlight the features of the product or service in meetings. If you are already familiar with these features, you will know if they are important to you and can assess whether the price is reasonable.
Similarly, knowing that a product may not have all the functions you desire but can still fulfill the task can be useful information during negotiations. You can request a lower price compared to a fully functional product.
Salespeople will try to overwhelm you with all available information. However, if you understand the product beforehand, you won’t be swayed by irrelevant flashy features.
Many negotiations fail because individuals lack a clear concept of their negotiation counterpart.
Every seller knows their competitors and their market position. As a buyer, make sure you understand your counterpart’s competitors when entering negotiations.
Thoroughly compare all product features. Having knowledge of alternative options will give you an edge during negotiations.
Pose questions, then listen. Ensure you stay engaged and provide feedback on what you hear, letting them know you understand and are actively listening.
A good salesperson speaks only 30% of the time during the sales process. If you are a salesperson, strive to excel in this area.
Silence is your friend. If your team members talk too much or try to fill the silence, consider intervening at the right time.
One technique is to pose a question or request an order, then remain silent. This is crucial because the first to speak often “loses.” People instinctively want to fill silence. Let the other party take the initiative to break the silence.
Listen to what’s left unsaid. If someone avoids a particular topic, take note and begin probing.
Ensure everyone is using the same standards. What are the facts? Engaging in back-and-forth arguments over facts is common. However, these facts should be established at the beginning of negotiations.
Introduce fair, efficient, or scientifically based standards to address issues. By doing this early in negotiations, you are likely to reach a fair deal.
Presenting the first offer can be a strategic move. It sets an anchor or baseline for future negotiations to revolve around.
The initial offer sets the tone for discussion. If initial assessments show significant disagreements on negotiation issues, it can be a good move. It helps all parties focus.
However, refraining from presenting an offer first can prevent mistakes. You can wait for the other party to make the initial offer to understand their goals or preferences better, enabling you to formulate your negotiation strategy more effectively.
If you’re unfamiliar with the market and believe the other party has more information, this is a good strategy. Waiting can provide you with more knowledge when you’re unsure of actual value.
If the other party presents the first offer, don’t feel compelled to negotiate immediately. Take your time. Analyze the reasonableness of the offer and explain why it’s unacceptable.
If you want to keep the negotiation moving forward but don’t wish to accept the offer, remain friendly and keep the other party engaged. If you’ve spent time reviewing the offer, you can logically refute the pricing anchor the other party set.
Conversely, don’t rush to accept an offer. Take your time to evaluate it. If it’s better than expected, you may have missed some information.
Patiently proceeding methodically is key to winning this game. Be well-prepared and exhibit your best self at the negotiation table. Meanwhile, always understand the alternative options for the product or service being negotiated.
Presenting the first offer can be a strategic way to establish a foundation for future negotiations, while carefully analyzing the offers you receive can help position yourself better.