Become a Great Negotiator: 5 Steps
Although everyone claims to want a "win-win" deal, the sad truth is that most businesspeople are competitive and subconsciously want to "win" by making the other person "lose."
Even when you enter negotiations with the best of intentions, it's fair to assume that, at some level, your counterpart wants to see you "lose" at least something. There's also probably a part of you that probably feels the same way about them.
The trick to moving out of this mentality is to "increase the size of the pie," according to Dr. Michael Leimbach, vice president of global research and development for the sales training firm Wilson Learning Worldwide.
To accomplish this, you treat the negotiation as a way to expand the deal to include items that both parties want but may not have identified or realized when they first entered the negotiation. Here's how:
1. Sit on the same side of the table.
When Dr. Leimbach explained this concept to me, I believe he was speaking metaphorically, but the more I think about it, the more it seems to me that the physical act of sitting on opposite sides of a table automatically creates competition.
In most business situations, people who are working together--rather than competing--tend to sit next to each other, sharing what they know in order to reach a higher level understanding.
Therefore, it seems intuitive to me that you're more likely to get to a "win-win" if your physical positioning encourages you to work towards that goal.
2. Depersonalize positions into problems.
When you use expressions like "my position is" or "my firm's position is" you are taking ownership of position. This makes the position part of your identity, which in turn makes it difficult to change or abandon that position.
Rather than owning a position, externalize it into a problem that both of you are working to solve. For example: "If we crafted the arrangement like so: [idea], it would work for me. How would that work for you?"
The idea is to turn the negotiation into a problem solving sessions where you help each other figure out how to go forward... rather than butting heads.
3. Address the "why" behind the "what."
Understanding the chain of logic behind a negotiating position allows both parties to figure out alternative (and possibly more elegant) solutions to the core problem that's creating the position.
For example, suppose a customer takes the position "I absolutely must get the lowest price." However, if you dig deeper into the "why" behind that "what," you might discover that the real problem is a lack cash flow in the current budget.
Once you know this, you can work together on ways to minimize the effect of purchasing on immediate cash flow, even if it means a higher price.
4. Introduce objective standards.
Another way to transcend competitive negotiating is to introduce independent facts that define the parameters of the agreement. Such facts might include estimates of market value, industry performance benchmarks, and credible third-party research.
When both parties agree upon such standards, it becomes easier for everybody involved to evaluate a proposal or an idea from a position of common ground, according to Dr. Leimbach.
"For example, if a customer needs to demonstrate to his or her manager that the price for the deal is a good value, then an independent standard such as market value/price can be used to justify or reinforce the customer's choice," he explains.
5. Have an alternative plan.
Enter every negotiation with a backup plan that comes into effect if you and your counterpart can't reach agreement. (Dr. Leimbach calls this a BATNA: "Best Alternative to a Negotiated Agreement.")
For example, suppose you're working with a potential customer who simply won't (or can't) pay you enough to make the deal profitable for you. In this case, your BATNA might be to maintain contact and continue to investigate opportunities to work together.
Having an acceptable BATNA frees you from the limiting perspective that you MUST close the deal no matter what, thereby freeing you to negotiate without fear of "losing."
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Geoffrey James, a contributing editor for Inc.com, is an author, speaker, and award-winning blogger. Originally a system architect, brand manager, and industry analyst inside two Fortune 100 companies, he's interviewed more than a thousand successful executives, managers, entrepreneurs, and gurus to discover how business really works. His most recent book is Business Without the Bullsh*t: 49 Secrets and Shortcuts You Need to Know. If you enjoyed this post, sign up for the free weekly Sales Source newsletter.