How to Boost Your Chance of Success When Negotiating
No doubt, one of the most important and useful skills that anyone can have, regardless of status or profession, is great negotiation skills.
After all, in our everyday lives, we are commonly exposed to situations where we negotiate, at varying levels or extent, to keep harmony in our relationships and avoid conflict. In almost every interaction setting, we are likely to give and take concessions; in other words, we are most likely to make compromises and settle at a point to satisfy our own best interests, and at the same time, allow the others to enjoy certain benefits.
Negotiating isn’t just a business interaction. It is a social interaction that’s inherently present in our lives. Observations would demonstrate that some people exhibit an innate ability for it, and some just don’t. And because of this, it is only natural for many of us to believe that negotiating skills run in the DNA, that it is an ability that individuals are born with (or without).
Studies show, however, that this isn’t the case, that negotiation skill is something that can be learned, and can be substantially improved overtime by constant practice. With the right mindset and openness to personal improvement, a previous bad deal should not dishearten us to take on the next challenge; instead, we learn and improve from our previous mistakes.
As buyers, there are various ways to boost our chances of success when negotiating for instance, with suppliers. The key is careful planning and preparation before we sit at the negotiating table.
- Understand the problem or issue. Be clear of the objective that you and the other party want to achieve out of the negotiation. Sometimes the issue may not be apparent and the true agenda may be hidden deliberately. Be rational and strip the problem/off emotions. Ask questions that will clarify or identify the true or biggest concern
- Gather facts. Identify all the important things that you need to know before the negotiations.
- About your company – Understand you’re your value of spend with the supplier and demand growth opportunities. Are there local, regional and global strategies related to this supplier and the commodity and services they are supplying ? What is the applicable relationship framework with this supplier ? How should this influence the decisions you make at the negotiation.
- About the supplier – Understand supplier’s capability, capacity constraints and opportunities, financial conditions, performance level, reputation in the industry. Who will sit at the negotiation table, who is the final decision maker ?
- Understand elements that are negotiable, non-negotiable, your ideal position, your bottom line, and most importatntly, your BATNA.* And do the same exercise taking the perspective of the other party. Anticipating the response or actions of the other party will help you better prepare for a counter response. Assume that the other party will be doing the same, anticipating how we would go during the negotiation table.
- Plan your tactics to get to the end result. Negotiation involves patience, and the approach should be carefully planned and executed accordingly to get to the desired end all the while maintaining a positive interaction with the other party. The following are the most commonly used tactics to get the best out of a negotiation
- Start off with a positive note. Discuss first those items that are easier to achieve consensus. This would usually encourage both parties to keep positive vibe as much as possible during the negotiation process.
- Impress upon the other party that the negotiation is a collaborative activity where the goal is to have both party achieve a win-win situation.
- Align on the importance of transparency to building a relationship that is fair and trustworthy. This would usually help in requesting for additional information to validate price offer or commercial claims.
- Understanding your timeframe will be crucial. Whichever party has got the shortest timeframe to achieve will most likely to concede more quickly to close the negotiation.
- Know who will be at the negotiating table and identify who makes the final decision. Adjust tactics accordingly to match the profile of the authority figure.
- Take time. If things come up that catch you by surprise and you need some time to think and assess, it is okay to have a break and think things through, rather than making an outright decision or statement that you will regret later.
To become an excellent negotiator takes time; it requires constant practice and an open mind that by working hard, your skill can improve.
Download our negotiation strategy template and let us know how it made a difference in your negotiation.
*BATNA – Best Alternative To a Negotiated Agreement.