Negotiating a win-win

Posted on February 12, 2014 by FGL

Negotiations come in all shapes and sizes – from national and international issues, to dealing with truculent teenagers or a petulant ‘tots’ – and usually not feeling like you’ve won the last two, even if you think you have!

Some people are better negotiators than others – some think they are great negotiators but are no more than corporate bullies, and some are actually very good at it but lack the confidence (or awareness of their ability) to make the most of it.

It’s relatively easy to get the best price for something – and we’ve all done it – but the art of a good negotiation is much more than getting something the cheapest, There are a whole host of other things that come into the decision making process, like reputation, relationship, service quality, timely-ness, warranties, professionalism, experience, reliability, track record, value for money, financial standing, etc., not forgetting the interpersonal bit, where you just like dealing with some people more than others.

It’s easy to get hooked on the price issues, but believe me the better you negotiate, the more you will get value for money.

Remember two words – planning and patience and follow four simple stages:

1. Preparation and planning

This is where you need to be clear about what you want, in terms of your needs and objectives – and consider all your ‘tradeables’ i.e. things that you could bring to the table to enhance the negotiation.

I’d encourage you to really think hard (and laterally) about these because the more tradeables you’ve got, the more you’ve got to negotiate with. When we were doing our Barn conversion, I got a 5% discount on building supplies purely because I said we could take articulated lorries straight from head office rather than unloading at the local merchants and re-delivering to us. It saved them time, labour and extra lorry costs – and saved me about £5,000 – happy days!

Consider what concessions or leeway you would be prepared to give – and be very clear about your position from three perspectives: what you’d like to achieve; what you intend to achieve; and what you must achieve. A sort of top, middle and bottom in terms of outcome. The last one tells you when to walk away from the deal, and never lose sight of this.

Try to identify your opponent’s wants, needs and tradeables too, and consider what variables/concession they may be prepared to give.

Without doubt, this is the most important stage – so spend the most time on it.

2. Debate

Create the right negotiating climate and build rapport. Listen to what is said, and the way it is said (non-verbal communication) and try to pull as much info as you can from good open questions (how, when, what, who, why etc). Summarise regularly to check understanding and give as much relevant information as you can to build up your ‘shopping basket’ for the deal. Be assertive and positive and look out for movements in the discussion. Be patient and don’t jump in with an offer too early - you never know what else might be on their side of the table!

3. Propose

This is the stage of putting together tentative terms for doing business. Aim high, be firm on general points and flexible on specifics. Use your tradeables to best effect. Try to pitch each proposal on the basis of “if you do X, then I will do Y“ (and say it that way round) – to create a position where you’ve both got the full picture and don’t move on to the bargaining stage with only a part picture.

You are bound to meet some resistance but try to deal with this positively and get to the real cause – use them as possible signals for your opponents “top, middle and bottom” positions.

4. Bargain and agree

Go through what you will finally trade and draw out the specific terms of the deal. Be clear about your top, middle and bottom outcomes, and always try to exchange something for something else (“if you do X then I will do Y” again). Remember that nothing is finally agreed until everything is agreed – and it’s ok to go back to earlier issues if it will help finalise the deal. Once you’ve established your final positions, summarise what is agreed so it’s clear to both of you. Deal concluded - go to pub and celebrate. It’s the law!

I’m not normally one for structures and processes, but a good negotiation needs it and the better you can work with the process (especially the prep stage and not jumping in too early), the better deals you will do; even if it is with the truculent teenager and the petulant tot!

Whether you are putting together a tender for a local council contract or just trying to get the best deal on a new photocopier, think of it in terms of more than just price – there will always be someone who will do it cheaper than you, but if that is their only tradeable, you should still win the deal.

Good luck - and if you need any further advice on how to be a winning business, just give me a call on 0845 260 0101.