Very few people actually like to negotiate. That's why so few people are good at negotiating; it's a task to be avoided or completed as quickly as possible.
Unfortunately, negotiating is a fact of life--especially business life. Fortunately, negotiating has less to do with competition than simply communicating: explaining the logic and benefits of a position, convincing others that an idea or premise makes sense, showing people how a decision will generate a desired return, helping people understand the benefits of change...
In essence, negotiation skills are communication skills.
So with that in mind, here are some specific ways to make your negotiations a little more fun and a lot more successful:
1. Swallow your fears and make the first bid.
People hate to go first, if only because going first might mean missing out on an opportunity: "If I quote a price of $5,000," the thinking goes, "and he would have happily paid $7,000, I leave money on the table." In the real world, that rarely happens, because the other person almost always has a reasonable understanding of value.
So set an anchor with your first offer. (The value of an offer is highly influenced by the first relevant number--an anchor--that enters a negotiation. That anchor strongly influences the rest of the negotiation.)
Research shows that when a seller makes the first offer, the final price is typically higher than if the buyer made the first offer. Why? The buyer's first offer will always be low. That sets a lower anchor. In negotiations, anchors matter.
If you're buying, be first and start the bidding low. If you're selling, start the bidding high.
2. Use silence to your advantage.
Most of us talk a lot when we're nervous, but when we talk a lot, we miss a lot.
If you make an offer and the seller says, "That is way too low," don't respond right away. Sit tight. The seller will start talking in order to fill the silence. Maybe he'll list reasons why your offer is too low. Maybe he'll share why he needs to make a deal so quickly. Most of the time, the seller will fill the silence with useful information--information you would never have learned if you were speaking.
Listen and think more than you speak. When you do speak, ask open-ended questions. You can't meet in the middle, much less on your side of the middle, unless you know what other people really need.
Be quiet. They'll tell you.
3. Definitely plan for the worst, but always expect the best.
High expectations typically lead to high outcomes. Always go into the negotiation assuming you can get what you want. While you should have a bottom line, walk away, none shall pass position in mind, always assume you can make a deal on your terms.
After all, you will never get what you want if you don't ask for what you want. Always ask for what you want.
4. Never set a range.
People love to ask for ballpark figures. Don't provide them; ballpark figures set anchors, too.
For example, don't say, "My guess is the cost will be somewhere between $5,000 and $10,000." The buyer will naturally want the final cost to be as close to $5,000 as possible--and will come up with plenty of reasons why his or her price should be at the low end of the range--even if what you are eventually asked to provide should cost well over $10,000.
Never provide an estimate when you don't have enough information. If you're not ready to quote a price, say you aren't sure and keep asking questions until you are sure.
5. Never give without taking (in a good way).
Say a buyer asks you to cut your price; you should always get something in return by taking something off the table. Every price reduction or increase in value should involve a trade-off of some kind. If they don't, that just means your initial price was padded.
Follow the same logic if you are the buyer. If you make a second and higher offer, always ask for something in return for that higher price.
And if you expect the negotiations to drag on, feel free to ask for things you don't really want so you can concede them later.
6. Try to never negotiate "alone."
While you probably do have the final word, if the other side knows you're the ultimate decision maker that can sometimes leave you feeling cornered. Always have a reason to step away and get a final OK from another person, even if that other person is just you.
It might feel wimpy to say, "I need to talk this over with a few people first," but it's better to feel wimpy than to give in to pressure to make a decision you don't want to make.
7. Use time to your advantage.
Even though you may hate everything about negotiating, never try to wrap a negotiation up as soon as possible just to be done with it. Haste always results in negotiation waste.
Plus, there's another advantage to going slowly. Even though money may never change hands, negotiations are still an investment in time--and most people don't want to lose on their investments. The more time the other side puts in, the more they will want to close the deal...and the more likely they will be to make concessions so they can close the deal.
While some people will walk away if the negotiation takes time, most will hang in for much longer than you might think.
8. Ignore bold--and emotional--statements.
Never assume everything you hear is true. The bolder, the louder, the more emotional a statement might be, the more likely that statement is either a bullying tactic or a sign of insecurity. (Or, often, both.)
If you feel intimidated, walk away. If you feel drawn in emotionally, get some distance. Maybe you will decide to give the other side what they "need," but make sure that decision is a decision and not an emotional reaction.
9. Give the other side some room.
You naturally feel defensive when you feel trapped. So does the other side.
Push too hard and take away every option and the other side may have no choice but to walk away. You don't want that, because...
10. You shouldn't see a negotiation as a competition.
Negotiating isn't a game to be won or lost. The best negotiation leaves both people feeling they received something of value. Don't try to be a ruthless negotiator; you're not built that way.
Instead, always try to...
11. Start a valuable relationship.
Just as you should never leave too much on the table, you also shouldn't take too much.
Always think about how what you say and do can help establish a long-term business relationship. A long-term relationship not only makes negotiating easier the next time, it also makes your business world a better place.