Archive for September, 2019
Negotiating better business deals is critical to a company’s success. People who don’t know the art of negotiation are 60% less successful that those that do. But up to 42% of the total value of a deal can be lost if there is no strategy, because we negotiate with our gut!
We all understand the importance of reaching a win-win negotiation when both sides are satisfied with the agreement; the odds of a long lasting successful business partnership are much higher. But concrete strategies for generating a win-win are often elusive.
We all need a strategy and listening is key. Below is a summary of some of the points raised at a recent Business Exposure Group meeting.
- Help your counterpart sit up and take notice by refusing to meet the initial suggested contract terms.
- Determine your desired outcome before you start negotiating, you will then know when to push forward and when to stop
- Know your audience, understand if he/she is a handshake person or a long contract kind of person
- Understand your worth. Don’t undersell your proposition.
- If you expect more, you will get more. Open with an extreme position followed by small concessions
- Don’t become emotionally involved. Most deals only happen if both sides feel they are getting something out of it
- Never walk away feeling you have pulled one over on someone else, they will refuse to deal with you in future
- Brainstorming with customers is a way to get close to them
- Always draft the first version of the agreement, this lets you frame how the deal should be structured
- Your offer should always include some wriggle room to give a concession
- Find points of agreement to sound collaborative and end on a positive
- Break the negotiation into parts
- Most people are fair and are often willing to reopen a discussion. By presenting evidence of a lopsided deal you can appeal to the other sides sense of decency
- Try experimenting with a shorter contract period that allows for natural breaks for renewal and regeneration
- Learn to flinch, the other person will become uncomfortable and rationalise their price or they will offer an immediate concession
- Impress the other side with your flexibility by putting forward several different proposals at the same time. When you put forward only one offer on the table you will learn very little if the other party turns it down. Ask which offer they prefer
- Consider unconventional deal structuring to bridge the gap between what you want and what the buyer can afford
- Ensure the other party is full empowered to do a deal before you start negotiations
- Always have something to give away eg spare parts, after sales care, discount on next order
However……If you want to close a good deal, you have to act like you don’t need it.