I hate negotiating. (Hate negotiating.) To me, a negotiation always feels at least a little confrontational and I’m a confrontation-averse kinda guy.
Unfortunately, negotiating is a fact of business life.
So if like me you’re an admitted negotiating sissy, here are a few ways to make negotiating a little less stressful, a little more fun, and a lot more successful:
1. Go first.
Many hesitate to make the first bid because the think going first could mean missing out on an opportunity. “If I quote a price of $5,000,” the thinking goes, “and he would have offered $7,000, then I leave money on the table.” In the real world that rarely happens, though, because the other side usually has a reasonable understanding of value.
The value of an offer is highly influenced by the first relevant number—an anchor—that enters a negotiation. That anchor strongly influences the rest of the negotiation. So go ahead and set that anchor. Make the first offer.
Research shows that when a seller makes the first offer the final price is typically higher than if the buyer made the first offer. Why? The buyer’s first offer will always be low. That sets a lower anchor.
In negotiations, anchors matter. So set one. If you’re buying, start the bidding low. If you’re selling, start the bidding high.
2. Never set a range.
People love to ask for ballpark figures. Don’t provide them because ballpark figures set anchors, too.
For example, don’t say, “My guess is the cost will be somewhere between $500 and $1,0000.” The buyer will naturally want the final cost to be as close to $500 as possible—even if what you are eventually asked to provide should cost well over $1,000.
Never provide an estimate when you don’t have enough information. Keep asking questions instead.
3. Use silence as a tool.
Most of us talk a lot when we’re nervous, but when we talk a lot we also miss a lot.
If you make an offer and the seller says, “That is way too low,” don’t respond right away. Sit tight. The seller will start talking in order to fill the silence.
Maybe he’ll list reasons why your offer is too low. Maybe he’ll share why he needs to make a deal so quickly. Most of the time the seller will fill the silence with useful information—information you would never have learned if you were speaking.
Listen and think a lot more than you speak. When you do speak, ask open-ended questions. You can’t meet in the middle, much less on your side of the middle, unless you know what the other side really needs.
Be quiet. They’ll tell you.
4. Expect the best.
High expectations typically lead to high outcomes. Always go into the negotiation assuming you can get what you want. Always assume you can make a deal on your terms.
You can’t get what you want if you don’t ask for what you want.
5. Concede for a reason.
Say a buyer asks you to cut your price. Always get something in return by taking something off the table. Every price reduction or increase in value should involve a trade-off of some kind.
Follow the same logic if you’re the buyer. When you make a second offer, always ask for something else in return for a higher price.
And if you expect the negotiations to drag on, early on ask for things you don’t really want so you can concede them later.
6. Don’t negotiate alone.
While you have the final word being the ultimate decision-maker can leave you feeling cornered. Always have a reason to step away and get a final okay from another person, even if that other person is just you.
It might feel wimpy to say, “I need to talk this over with a few people first,” but it’s better to feel wimpy than to get pressured into a decision you don’t want to make.
7. Use time to your advantage.
Even though you may hate negotiating, never try to wrap a negotiation up as soon as possible just to be done with it. Haste always results in negotiation waste.
Plus there’s another advantage to going slowly. Even though money may never change hands, negotiations are still an investment in time. The more time the other side puts in the more they will want to close the deal… and the more likely they will be to make concessions so they can close the deal.
While a few people actually will walk away, most will hang in for much longer than you might think.
8. Ignore bold statements.
Never assume everything you hear is true. The bolder the statement the more likely it is to be a negotiating tactic.
Strong statements are either a bullying tactic or a sign of insecurity. (Or, often times, both.) If you feel intimidated, walk away. Otherwise, listen closely for what lies underneath the bluster and posturing.
9. Give the other person room.
You feel defensive when you feel trapped; so does the other side.
Push too hard and take away every option and the other person may have no choice but to walk away. That means you both lose. So…
10. Don’t try to “win.”
Negotiating isn’t a game to be won or lost. The best negotiation leaves both people feeling they received something of value.
Don’t try to be a ruthless negotiator; if you hate negotiating you simply aren’t built that way.
Embrace that fact and instead always try to…
11. Build a relationship.
Never take too much from the table, and never leave too much.
As you negotiate, always think about how what you say and do can help establish a long-term business relationship. A long-term relationship not only makes negotiating easier the next time, it also makes your business world a better place.
And that alone is an outstanding outcome.
Source: Linked In