Why do I need to negotiate?
This is a simple question with a simple answer, it’s because we don’t always get what we deserve;
There will be a time in your life when you need to stand up and negotiate for what you and your business is worth.
Negotiation skills could mean the difference between getting a good deal and being pushed into something you don’t want to do.
Some people are naturally good at sales and negotiation; it is something that is an essential life skill and an absolutely essential business skill.
Here we give you a framework to use so that you can improve your skills.
Be Prepared before any Negotiation.
Think about your overall tactics, but above all visualise what you want, to do this there are 4 questions you need to ask yourself;
- What is your ideal negotiated ‘Dream’ deal?
- What is the most likely deal?
- What is your lowest price before you walk away?
- What is your best alternative to a negotiated agreement? (Known as your Batna from the book ‘Getting to Yes’).
Think about your Tactics.
Think about why you or your product is worth so much,
Think and construct counter arguments,
Put yourself in their shoes, what does your opponent really want?
Think about how you can persuade or create pressure on your opponent,
Remember to bring with you the facts and figures to back up your claims.
Know where you stand.
One of the most important areas to research before any negotiation is to know any standards and benchmarks in your industry.
Research any prior deals, sales or negotiations similar to yours.
This type of historical research can be used to back up you claims and arguments.
If you look the part and demonstrate that you know what you are talking about,
your opponent is more likely to agree with you and hopefully give you what you want.
This is called the consistency principle, so it is important to know your field of business inside out.
You need to know your facts well, practice your pitch or presentation, look the part and deliver with confidence.
Find some common agreement.
A good starting point is to find something that you both agree on, in doing this you start from a place of mutual agreement, the technique is always to go back to this point of agreement when things go off track.
Leverage within the concept of negotiation is the process of creating a force to make your opponent move in your direction.
When introducing leverage to a negotiation it is best done indirectly and in a non-threatening way.
The commonest types of leverage are;
The introduction of time pressure,
The treat of losing out on a deal and
The suggesting that there is interest from competition.
It’s all about how they feel.
Business may be driven by financial gain, however people often sign deals that have nothing to do with the price.
Feelings of exclusivity, status and excitement can really tip the deal your way, many businessmen are financially secure but they may still remember the excitement of a start-up and may want to be part of something because they are investing in the ‘feeling’ and the process of building something with you and not just the financial gain from the end product.
Investors are just as likely to invest in you, your hard work and passion than just your product.
The Virtual Close
Closing any deal is a big step, so for this reason I like to introduce another step into the negotiation, I commonly use what is called a ‘Virtual Close’ before asking to formally close any sale or deal.
An example of a ‘virtual close’ would be,
“If you were to give me this job, what would you see me doing in the first 6 months etc….”
A virtual Close implies that you already have the job or done the deal, it gets your opponent to imagine this before they answer your question.
This technique helps to move people towards the final deal in a gentle but directive way.
Negotiation is a necessary skill that needs to be used to get what you deserve and not what somebody else wants to give you, negotiation done well you will move towards what you want, you will gain respect from your opponent and will not lose self respect.
For more information on Negotiation please read this blog on Negotiation tactics.