If you have ever happened to be a part of a business negotiation, you must have felt the urge to advocate your own interest irrespective of the ideal outcome. Actually, there is nothing wrong about it because we all desire the best outcome for ourselves and we cannot help it given it is human nature. However, if you want to master the skill to become a successful negotiator, you have to put aside your self-interest and consider the bigger picture, because if you only care about yourself, then you will eventually lose the deal. As such, in this article, we will discuss a few tricks that will help you in developing your business negotiation skills.
- be a patient listener
I believe you must have come across people who are all praise about their own laurels. Such people are one of the worst negotiators, as they like to do all the talking themselves and try to control the conversation. However, if you want to become a good negotiator then you have to learn to listen to the other side and recognize the key issues, and then you will see that you are able to frame a suitable response. Being a patient listener you are able to understand what is actually important to the other side, what they feel are the hindrances and what are the those that make them feel comfortable, and as such you are able to provide an appropriate response.
- Be thoroughly prepared
Prior to a negotiation you should be thoroughly prepared which may include reviewing and understanding the business of the other party and it can be done by checking their website, going through articles written about the company etc. You can consider doing a little bit of background check about the person with whom you are supposed to negotiate or study some of the similar deals completed by the other side. Based on all the reviewing and checking, you will be able to understand the pricing that are being offered to other competitors in the current market scenario.
- negotiate professionally
In this world, there are people who are unprofessional and, trust me; nobody wants to do business with them. Please keep in mind that most businesses require you to interact with the same person even after the negotiations are concluded or the transaction may require you to have an ongoing connection with the other side. As such, it is important that you negotiate professionally and try to build a good long-term relationship with them, which should be the ultimate goal.
- identify the decision maker
One of the most important skills that a good negotiator should possess is the ability to understand the extent of the authority of the other person in the negotiation. Based on that, you can identify whether the person in front of you is the actual decision maker or not. Otherwise, after the entire process of negotiation, you will realize that it was a long and futile attempt because you were dealing with a person who had limited decision-making authority. On the other hand, if you are able to identify whether or not the person is a decision maker, then you can either ask for the authorized person for a fruitful negotiation or walk away from the negotiation without wasting your own time.
- know when to walk away
You should be well prepared with your business pitch such that you know until what point the terms of the negotiation will be an acceptable proposition for you and beyond that, you should be prepared to walk away. It can be done through a detailed analysis of the business. Although it might sound very easy, but it is very tricky and can be the game changer. It is always advisable that prior to the negotiation you should know your target price and the walkaway price. The target price will be backed by market data, while the walk away price is the ultimate price that will make the business practically unfeasible.
- Keep your options open
Will you like to have a few more options in your kitty? Hell!! Yes. We all want to have competitive alternatives and there is nothing wrong about it. This puts you in the driver’s seat in a negotiation or at least gives you an upper hand so that you can make the best decision as to how to proceed. For instance, if you are planning to take a business loan from a bank, you will always try to keep your options open in the form of some competitive terms and conditions offered by some other banks – this way the current bank knows that it has viable competitors. If you negotiate with all the banks simultaneously, then you are bound to get the best pricing or better contractual terms.
- the first offer should not be the last offer
This I have kept for the last because (as the title suggests) this is not the last. One of the mistakes that we do is to accept the very first offer from the other side. Trust me, if you do not make a counteroffer, then the other party may get under the impression that they offered too much and eventually they may drop the deal out of remorse. For instance, most buyers keep headroom space of up to 5%-15% in their first offer because they expect that seller will either reject or counter their first offer. You should realise that such back and forth negotiation and counter-offers will satisfy the ego of both the parties because they feel that they struck the best deal they could, and thus will be more committed to close the deal.
Finally, it can be seen that negotiation is the mix of both art and science. On one hand, negotiation is a remarkable craft; while on the other hand, it can be very complex and confusing. As such, when the business negotiators get frustrated, they are then bombarded with ideas that promise the magic bullet for winning the best deals. However, there is no magic bean strategy that can win you negotiations. The best strategy is to engage the other side in a constructive way such that it is a win-win collaboration for both the parties. Hope this article will help you develop your business negotiation skills.