Four Ways To Negotiate A Better Deal
Four Ways To Negotiate A Better Deal
By Mark Wager
If you want to be successful in business or in your career then you need to know how to negotiate, whether you are trying to negotiate a deal with a supplier or wanting to get a pay rise you need to know how to ask people in a way that makes them more likely to say yes to what you want. The art of negotiation is a complex one but in this week’s article I want to share with you some practical tips that will help you get what you want.
Tip One: Always be fair - never be greedy.
Successful negotiation is not about getting the best deal possible regardless of the consequences. If you get what you want but at the cost of a damaged relationship then that is not success because subsequent negotiations will now be much more difficult. It’s important to remember that negotiation is episodic and it’s ongoing. What you do today will have consequences in the future.
I remember a story about a Sales Manager I knew who imported products to sell to his customers and because he believed he was the only person who had this product he put on an incredibly high mark-up and he sold the product for ten times the price he bought them for. Although it was a ridiculous mark-up price, he sold a lot of this product. A year later someone else got a hold of this product and sold the same for what was considered to be a fair price which was much lower, about a third of the price. Customers switched business to the new supplier and when the Manger approached them saying he would match or even lower the price below this competitor, he found that his customers didn’t want anything to do with him because they all felt that his initial price was unfair. The money he gained by being greedy was lost because this cost him ongoing business.
Tip Two: Look for what you can give rather than what you can take.
If you are not familiar with the theory of the law of reciprocity then you have certainly encountered it many times even if you weren't aware of it. The law of reciprocity says that people have a tendency to give back to people the nature of treatment that they have received from them. If you treat someone kindly they are more likely to return that kindness. Research has shown that this law actually influences people's decision making. In one experiment by Professor Dennis Reagan at Cornell University they studied how many people bought raffle tickets from a stranger. In one scenario the stranger just asked if the person wanted to buy a raffle ticket and in the other the stranger went away and gave the person a soft drink. The people who received the soda bought twice as many raffle tickets than the people who didn't receive the soft drink. In a negotiation remember if you want someone to give you something or do something then find a way to give them something or do something for them so instead of asking for what you can receive from the negotiation, ask yourself what value can be returned and offer this to them.
Tip Three: Ask yourself how important it is for the other person
One of the most common mistakes I see people make when negotiating is when they are so eager that they settle for far less than what the other person was prepared to offer. This happens a lot when people start a job that they really want. They are so exited that they settle for anything that’s offered or I’ve even seen people accept a job without even knowing what the salary package is. It’s because they focus on what’s important for them and they never care to find out about how important this deal is for the other person.
I learnt this lesson many years ago, when I left school and I worked in a shoe shop and one day during the middle of a very cold winter in London someone walked into our shop and asked for some sandals. They were going on holiday to get away from the cold weather but he couldn’t find sandals anywhere as they were out of season. I went out the back and to my surprise I found one pair. At that moment an experienced sales person asked me how much was I going to sell the sandals for. My first impression was that the sandals where useless to us so I was going to give them away for a few pounds but the experienced sales person told me that value is determined by how important the deal is for the other person. He was desperate for the sandals so was willing to pay a lot of money for them. The fact that they weren’t important to me was irrelevant. Always put yourself in the position of the other person and see the trade from their position.
Tip Four: “No” is not the end of the negotiation - it’s the start
People don’t like hearing the word “no.” It feels final, it’s the end of the conversation but actually in fact it’s just the beginning. This lesson is the one of the main differences between people who are successful and people who fail. If you want to be a better negotiator then you need to view “no” as just the beginning of the conversation. When you hear the word “no” this is a clear sign that you haven’t to this point asked the right questions. You know what the other person doesn’t want but do you know what they do want and why? It’s the “what” and “why” questions that will turn the no into a yes. Let me explain the difference.
Here’s a story I was told when I trained to become a mediator. A mother has two children who are arguing over the last orange in the house. A simple approach would be to split the orange into two and give each child half of the orange. This would be a compromise but in negation compromise is not always the best solution. The Mother takes the orange from the crying children and asks them why they want it. When asked, one child expresses the desire to make orange juice. The other is baking muffins and needs to shave the peel into the recipe. The children, with the help of their mother, both win. By allowing one to make all the juice he or she wants and then giving the leftover peel to the other after every drop of juice has been squeezed out of it. So one gets the juice and the other gets the entire peel intact so both are therefore satisfied all because their mother asked what they wanted it for and why they wanted it.
Never underestimate the importance of negotiation in your career. When your salary is being discussed or when you are talking to suppliers or clients you need to be able to negotiate effectively. In this article I’ve supplied just some basic tips that will get you good results but shouldn't be taken as an overall strategy. If you want to know more about this and learn how to achieve astonishing results feel free to contact me. I am available to come to your business to talk to your negotiating team.
Posted: Thursday 6 February 2020