Negotiation – Getting the Best Deal

The ability to negotiate strongly will determine your success when dealing with others. Today, every price, every condition, every offer is negotiable. Neil Rackham, who wrote Spin Selling 30 years ago says that back then sales involved around 40% negotiation. Today, he estimates it is 90%. When considering a new job, your ability to negotiate will determine the remuneration you receive much more than your qualifications. It is estimated that in the average recruitment interview only five minutes is spent discussing (let alone negotiating) remuneration; yet that discussion could add $5,000 to your salary. Where else could you earn $5,000 for five minutes work? And, of course, you are not just negotiating salary, but also conditions. In these days of more flexible working arrangements and time-poor lifestyles, the conditions you negotiate can impact massively on your quality of life.

Win-Win Improves your Network

Negotiating great deals not only gives you a better outcome, but creates the maximum value for the other party as well. So, as well as rewarding you financially, it also improves your relationships and strengthens your network. Ron Shapiro, lawyer and agent for some of America’s highest-paid sports stars says, “The best way to improve your situation is to improve your network; and the best way to improve your network is to create win-win deals.”

Bargaining

Your ability to bargain strongly will be determined by your research. Use whatever independent authorities you can to give your offer more credibility in the eyes of the other party. Put your offer on the table and sell it – articulating all the benefits for the other side. But, don’t jump in too early. Latest research has shown the later an offer is put forward, the better the final deal is. While it is essential that the other side believes that you have come ready to put an attractive offer on the table; it is important not to do it too soon. The later a first offer is made in the negotiation, the more likely it is that the negotiation will result in a more creative, higher value deal. This is because the second you start bargaining in a negotiation, you stop sharing information, and it is in this sharing of information that each side can identify where they can offer value to the other side.

Perception

In negotiation, perception is reality. Clever negotiators work hard to see the negotiation from the other side’s perspective. They recognise that they need to aim for the highest perceived value to the other side. For example, you may take the reliability of your supply as a given as you have never failed to deliver. But for a customer who has been disadvantaged by lack of supply in the past, reliability of supply has very high perceived value. The other side’s priorities are often driven by their past experience. If their past supplier was unreliable, your ability to provide a reliable service will have very high value to them. Smart negotiators ask, “What did you dislike most about your previous arrangement?” then show how it will never happen with them  

Never Give without Getting

A basic principle of negotiating is never give anything without getting something in return. Even if what they are asking for costs you nothing – get something back. Remember, it’s all about perceived value. If you give freely, they won’t value it – and are likely to ask for more.

Deal-Making

Good negotiators work hard to create the best deal for the situation – taking the relationship into account. They recognise that in some one-off negotiations where there is no on-going relationship, it is enough to just get the contract signed. But, most importantly, they know that most negotiations are not the end of the relationship – but the start of it. Latest research has shown that up to 70% of negotiated deals fail in their implementation. Smart negotiators never lose sight of this question – what is the point of the negotiation? Surely, it is not just to do a deal, but to implement an agreement that is mutually beneficial for all concerned. Negotiation is a life skill. If you are observant, every day you will see examples of clever win-win outcomes. Learn from these and it will improve every aspect of your life.