A negotiation isn't a dispute or a confrontation. Great negotiators don't fight. When the bully on the boat in Enter the Dragon asks Bruce Lee to describe his kung fu style, Bruce says, "You can call it 'the art of fighting without fighting.'"
That's a great way to think of a negotiation. Negotiating isn't really about competing well -- negotiating is about communicating well. (That's especially true if, for example, you're asking for a raise.)
Want to be a better negotiator? Here are some simple tips.
1. Listen more than you talk.
It's easy to go into a negotiation focused only on what you'll say, especially when you're nervous.
The goal of a negotiation isn't just to get what you want, but also to help the other side get what they want. (Otherwise, how will you ever strike a deal?) To do that, you need to actually know what the other side wants -- which means you have to listen.
Finding common ground means knowing common ground exists.
In most situations, price isn't the only thing on the table. Maybe the other side would appreciate a longer delivery schedule. Or a larger down payment. Or to book revenue as soon as possible.
I once wanted to buy a house but couldn't come up with the down payment right away, so I made contract signing payments over the course of several months while I pulled the funds together. The owner was happy to do so; I basically made his house payments in the meantime, and if I had failed to come up with the down payment, he would have kept my deposit.
2. Use timing to your advantage.
Often the best time to buy a car is at the end of the month; salespeople need to hit their quotas, dealerships want to "make" their month, etc. The same is true with real estate; house sales (and property leases) are generally weaker in the winter months, which means owners are more likely to negotiate.
And you can also use back-end timing to your advantage. Say you want to lease a property starting in March. If you sign a 12-month lease, the owner will have to find another tenant next March. But if you ask for a 15-month lease, the property will be open at the start of prime rental season, which means he or she should be happier to accept a lower rent amount.
And this raises an important point.
3. Always find the right way to frame the negotiation.
In Negotiating the Impossible, Deepak Malhotra shows how properly framing a negotiation means finding the best perspective from which to view the negotiation. Maybe the frame is money. Or time. Or delivery schedule. Or quality.
In the landlord example above, price isn't the only frame. So is time. In my house-buying example, price was a frame -- but so was time, and so was the seller's risk if I couldn't come up with the down payment.
Frame a negotiation correctly and you can make it easier to negotiate on the points that matter to you.
For example, say you need a certain service performed. If you're willing to wait for that service to be performed -- or to be performed more slowly than normal -- the provider may be able to accept a lower price, since your job can be fit into the margins of the provider's schedule. (Think of it this way: If a customer asks you to perform a rush job, you'll probably need to raise the price to accommodate the additional work as well as the impact on your schedules and your other customers. The same applies in reverse: Giving additional time should allow the provider to make concessions on other terms.)
Or if you're buying a car, implicitly framing the negotiation by waiting until the end of the month and then saying you want to buy a car right away frames the negotiation in terms of time for the salesperson. Or frame it by going to the dealership near the end of the day: The salesperson will be more eager to make a deal, since customers who leave saying "I'll be back" rarely do come back.
4. Always get when you give.
You send a proposal to a customer and he asks for a 10 percent discount. Simply saying yes sends a terrible message; in effect, that means your original price was too high.
Whenever you make a concession, make sure you receive something in return. Maybe you will provide a 10 percent discount, but your delivery schedule will be extended. Or you'll need a larger deposit.
Keep in mind you can also use the same approach as a buyer. Don't just say "I need you to knock 10 percent off the price." Say "I can only afford to pay $X, but in return you can space out deliveries over the next two months." Or "I can only afford to pay $X, but I will be glad to sign a longer-term contract under those terms."
That way you aren't just competing; you're finding common ground by finding terms that work for both of you.
And most important:
5. Always be willing to walk.
Granted, sometimes that's not possible. If your delivery truck has broken down and you need to make deliveries today, walking away from the truck rental counter isn't really an option.
But that's a practical need, not an emotional need. In most cases, your need is emotional: You want this building; you want this car; you want this house. Even though there are other options, you want this one.
When you're negotiating, never want this one -- at least not unless the price, terms, etc., are also what you want.
How will you know? Decide those things ahead of time. Know your numbers. Know the terms you're willing to accept. Know the value of what you're getting -- and of what you will provide.
The best way to be a great negotiator is to take emotion out of the equation. When it's objective -- when it doesn't feel personal -- you won't get hung up on winning or losing. You'll just calmly work toward getting the best deal you can.
And this means, oddly enough, you're much more likely to "win."