The Art of Negotiation..... #12
- Adrian Dionisio - business737 owner
- Jan 2, 2021
- 4 min read
Updated: Apr 30, 2024
Negotiation in Business
Negotiation is an activity we all participate in, every single day of our lives. Funnily enough the most important negotiations take place within ourselves when contemplating what actions and decisions to make.
These inner negotiations are arguably the most crucial in our lives and have led us to where we are at this very moment. Every day life also involves negotiating with our children, family, friends and those around us.
Those involved in business are always in negotiations with suppliers, customers, employees and associates. Negotiating is a part of our daily grind. Please continue to read to find out about the underlying principles and actions of all successful negotiations.
Basic Principles of Negotiation
The basic principles set a solid foundation for all successful negotiation scenarios, from personal, to boardroom level and even more volatile contexts like hostage situations.
The goal of any negotiation is to establish a point of mutual interest; a win win scenario must be agreed upon for any negotiation to be successful. The process of reaching an acceptable agreement will involve the compromise of one or both parties.
It is possible to prepare a strategy in advance to increase the probability of finding this mutually accepted solution. The strategy involves 3 distinct phases
Preparation & Set up
Structure
Discussion
Preparation & Set up
Do your research and set the stage for a satisfactory outcome. Know exactly who are you negotiating with. Access relevant information to take advantage of your strengths, their weaknesses and to know how a potential deal will benefit either party.
Ideally you want to find win win situations that suit all concerned. Understand their goals, motivations, wants and fears to help you navigate the negotiations successfully.
Where possible make sure you are negotiating with the right person. This person should have the power to make binding commitments and doesn't need authorisation from higher up.
Keep in mind that an authentic connection with your negotiating partner will help lead to an optimal outcome for both parties. Make sure the negotiation setting and environment is conducive for you getting a good deal. Use curiosity, deference, empathy, influence, positivity and rapport to create the best deal possible
Structure
It will be prudent to envisage the whole negotiation process before it actually takes place. Structure your negotiations to increase your chances of success. Firstly it is important to always have the endgame in mind while you plan and execute your strategy. This will give you guidance and direction throughout the whole procedure. Know exact terms, conditions and specifications so you can frame your proposal accordingly.
It is necessary to be aware of the primary benefits for the other party as well as the alternatives available to them. It is important to know how your offer compares and how your proposal is better. Knowledge of the bigger picture will empower you and mean you already halfway to getting exactly what you want.
How will you over come any objections and barriers to purchase? Always anticipate objections ahead of time. This will put you in a position to have arguments ready at hand to counter with persuasive reasoning. The goal is to find common ground. Are there any trade offs or concessions you are willing to make to reach and agreement? By analysing different options in advance you can provide alternative offers meaning a greater probability for success.
The first offer is the most important and will be a benchmark by which following offers will be compared and judged. All offers leading up to the final number are equally important: they will set the stage for final handshake.
Remember you will never get what you do not ask for so be assertive and where necessary aggressive.
Discussion
This is where the offer is presented to the other party, where you ask for the sale. The same principles apply whether the setting is via phone/ email/ in person etc. Successful negotiating will require a sense of timing, resourcefulness, keen awareness and the ability to anticipate the other party’s next move.
It is very important to know when to stop talking because great negotiating is more listening and less talking. Ask for clarification and specific details where required and remember to always be respectful and don’t become defensive. Be willing to give in a little but beware as concessions given away easily always appear to be of little value
Throughout the process be aware of signs and signals through body language and speech patterns. Try to be aware of any deviations from established patterns as this may signal doubt or dishonesty. One thing to watch out for is the “Pinocchio effect.” People who are being dishonest tend to use more words and effort than necessary to communicate their point. Being mindful of these techniques may well give you the upper hand during negotiations.
Being aware and applying the 3 phases of negotiations will mean a much greater chance of success and achieving your goal. Like most things in life experience is your best teacher.
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