Negotiations are an inherent part of business. This can be as simple as purchasing inventory or as complex as negotiating a merger of two companies. In short, many deals and transactions require negotiations.
Make sure you get your perspective on negotiations right. It’s not a friendly outing at Starbucks. It’s a challenge that you must win by playing cool while the other party falters. You have to extract the best deal possible. You will have to sell hard. It’s a tried and tested way that’s proven to work much better than a soft sell. However, negotiation, like most other processes is a certain skill that has to be learnt and polished over time, mostly through negotiation training.
Aggressive People Win
Your stance has to be clear. If you are meek, passive and timid then you are not going to win many good deals. This can clearly be evinced for example by checking out the best lawyers. Negotiations are routine for lawyers. The most fearless, ruthless and downright belligerent lawyers are the winners in the negotiations game. They can easily intimidate people into agreeing to their terms.
Be Nonchalant Under Pressure
Knowing the relative strengths of the negotiating parties is extremely important. For example, as a vendor you are confronted with the question ‘there are so many other vendors out there, why should I pick you?’ Present all of your strengths, expertise and experience. At the end, you should insinuate that if you don’t go with you then you will not be available for them in the future. The time to act is now. Don’t betray your trepidation. If you make that mistake then the other party will bully you into compromises and concessions. Just show that you are in no hurry and you can walk out of the deal with perfect equanimity. This is an old ploy successfully leveraged by the best poker players. They know that even with a mediocre hand they can play on the fears of their opponents to win. To execute this high-level kind of negotiation, you will need to learn from experts with some serious negotiation experience, for which there are negotiation firms out there that teach these skills.
Don’t undersell easily
The prospective buyer will prod you to offer your best price. Be stubborn and don’t be cajoled easily. If you naively give your best quote the conniving customer will still say that it’s not enough and will ask for more. If you have to give discounts then do so very slowly always keep some room to maneuver. This way you will wind up giving a 4 percent discount instead of going all the way into double digits for instance. A little obduracy can pay.
It’s More Than Just the Price
Pay very close attention to the terms in addition to the price. If you get a low price you should be concerned as to why the other party is underselling itself and you should ask appropriate questions concerning quality in a judicious manner. If the price is too high then you should confront the seller with market data and say that such a high offering is not vindicated in the light of current market conditions. Keep asking questions and pay very close attention. Be skeptical and don’t accept anything at face value. Seek upfront evidence for any claims. Negotiation consulting can teach you to be this savy in a negotiation so you never get a bad deal.
Write It Down
When you understand that the other party is no longer willing to compromise then have them write down their final offer on paper and show it to your lawyer. He will advise you whether or not it’s a good deal. A lawyer can tell which terms are problematic. You can then decide at leisure whether or not those terms are acceptable to you. Invite your partners and associates to pore over the details and ask for advice from knowledgeable persons who have experience and acumen in this regard.
Cultural Values Matter
Due to the international nature of trade, you must pay attention to cultural values and sensibilities. For instance, when Enron was negotiating with Indian authorities, it lost its bid to some other company because the government thought that Enron’s pace of negotiations was too fast. It’s true that time is money but in many parts of the world, people like to take their time when the deal is big.