Negotiations- Five Keys
"The art of negotiation is practiced by everyone, But the craft of negotiation is practiced by a few." -- unknown
Everyone negotiates every day, with our bankers, colleagues, employees, spouses, children, or even our pets. We all do it, every hour of every day, over loans, projects, raises, dinner dates, privileges, even the holiday leftovers. We all negotiate, whether we want to or not. Some of us just do it better than others. The following keys will unlock how to negotiate the best deals.
1. Build A Relationship
I won't tell you to squeeze and intimidate some incredible terms out of your opponent. That defeats the very purpose of the craft of negotiation. Instead, look for the Win-Win situations, where both parties can work together to solve the other's needs. Be cooperative with people; we all respond well to human contact.
When I enter negotiations, I never sit across from the other person like an opponent. Instead, I sit next to him and both of us look at a white board that lists the give-and-takes we need to solve.
Negotiation, a highly efficient form of communication, requires trust. Good business and personal relations will make it mutually beneficial. Most people with whom you negotiate, you will see - and negotiate with - again, because of relationships.
In 1981, one of my clients hired a lawyer who went in for the "kill" in a water bottling project with the city of Palm Springs. The lawyer forced their hand to get the most he could. Although my client got his permit, his lawyer alienated all parties involved. My client ended up with severe restrictions on what could have been a mutually prosperous water bottling plant (long before bottled water's popularity). The lawyer blew it and my client ended up losing a lot of money.
2. Do Your Homework
Do yourself a favor: Know what you want, before you enter into the meeting. Next, do your bargaining partner a favor: Know what he or she wants too. Learn as much about them as yourself: wants, fears, limits. Deals will go much more smoothly.
Look beyond the other party's 'position' to learn their 'interest'. Their position only outwardly declares what they want. Like a $2.5 million sale price. However, their interest reveals the motivating need for that sale. Like the seller's need to wipe a loan off the corporate books. After evaluating this real case history, the seller and I both learned the property only had half the value asked for. With this knowledge, we settled on a mutually beneficial number.
3. Watch, Wait, Listen and Learn
Negotiations are not one-time deals or competition events, but a process to work out agreeable terms. Instead of turning it into a conflict, turn it into a conflict resolution. Watch how non-verbal cues reveal the other party's interest. Wait for them to make the first move; never negotiate against yourself by proposing a concession you're willing to make.
Use open-ended questions that stimulate solutions. For example, "Could you help me see what you need to feel good about this?" Listen actively for the answers about the other's concerns. What I do is rephrase their important points; add in my own position; ask another question; and then, shut up.
Follow these steps and you'll learn your (and their) BATNA - Best Alternative to Negotiating Agreement. Beyond arguing for what you each want, you can settle for what you both realistically need.
For Example: These three keys came into play when I wanted to purchase a foreclosure property from a bank. They needed to get value out of the building and not lose face with regulators. Although I could have driven harder for another $20,000 decrease, I put myself in their shoes. They had already agreed to sell below market price. Because I played fair, they offered me a loan with lower interest and lower down payment. That saved me $80,000. It was a win-win deal.
Remember, good negotiations make repeat performers. To rid themselves of other problem properties, the same bank gave me first refusal at market value. We each got a fair deal, consistently. Together, we negotiated 15 other investments that earned me a half-million dollar profit.
4. Exercise Patience
Take your time. Whoever negotiates in a hurry will make the most concessions. Focus on terms instead of people's manias. Wait out their anger, intimidation, impressive jargon, guilt trips, and tendency to 'fake it' just to manipulate you. Mind your temper; let the numbers decide - not the emotions. If the other party won't budge, I can always postpone the negotiation until the next day or I can walk away.
Don't accept the first offer and don't make one concession without asking something in return. Make sure your initial proposal includes terms you can willingly sacrifice. Negotiate value, but not price.
5. Be Willing to Walk
Set guidelines for when you plan to quit, beforehand. Don't let your ego or emotions compromise. Too many bidders pay inflated rates at auctions because their egos take over. They wouldn't walk away from sales outside their limits.
I will never negotiate with someone who doesn't have the final say or I won't show my cards beforehand to someone who doesn't have the authority to decide.
If we hit a deadlock, I head to the door, turn and say: "I'm sorry we can't come to terms. I really want this. You really want that. You also want a fair price for all. I must be doing something wrong." Stop and be silent. Sometimes this tactic works, sometimes it doesn't. I will never threaten, "This is my last offer." For most negotiators, it usually isn't. So, they just end up making liars of themselves.
Sometimes I may suggest we move to a different setting, get a drink, have lunch or dinner. Quite often I will start the negotiations with the terms and conditions that are easier to agree upon and leave the harder ones until later. This type of negotiation agreement worked for Kissinger when he brought the Arabs and Israelis together in 1974. But if terms change overnight, I say, "Goodbye." I won't tolerate the 'oh-I-forgot-about' tactic thrown in at the last minute.
Be fair, attentive, and cooperative. Prepare yourself and set a congenial climate. Take your time. Predetermine the outcomes you can live with. When you can't agree, explore, "Where am I going wrong? Help me with my numbers to see the value we both get." If you don't feel comfortable doing this on your own, a professional coach such as myself, a master at the craft of negotiation, can help you. Regularly, you will land the best deals everů because you are willing to work for everyone's best interest. You win.
Karim A. Jaude (The Coach) is the founder of "BusinessCoach1"; a business and professional coaching service. For over six years he has been coaching entrepreneurs, executives and professionals to develop their skills, promote and grow their business, their teams and themselves; and to achieve peak performance while have fun in the process. He coaches by phone or in person. He practices in the Brentwood area of Los Angeles. Karim can be reached at 310-471-4185. E-mail: firstname.lastname@example.org, website www.businesscoach1.com .
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