How to Negotiate
The key to negotiation is seeing things from both sides and having an open mind, willing to hear other people's opinion.
- Consider the objectives and emotional motivation of the other party.
- Decide on your opening position, and your breakpoint. (the lowest amount or cheapest price you will accept in the deal, the "worst-case scenario").
- Plan how you will move in your proposals. Your moves should be in ever-decreasing steps, which will give the impression that you are being "bled" and there is increasingly less bargining range to be had.
- Open extreme. This gives you room to negotiate. If your opening offer is too close to your break point, then you will not have enough bargining range to concede to the other party as a way of giving satisfaction.
- Try to craft a compromise that addresses their core concerns.
- Start by talking about something upon which no one could disagree. You can recite basic facts that the other party will say yes to.
- Be agreeable. If you meet for lunch, let them order first and then say "that sounds great, I'll have the same", it is a subtle compliment.
- Give them a chance to tell you what they want. They may have a proposal that you have not considered or an offer more favorable than you expected.
- If they surprise you with a very appealing offer, don't let on that you expected something less favorable.
- When you do propose a deal, propose it as "if you do x for me, then I will do y for you" remember - pain before the gain
- Show them the way home. Have all the documents ready to sign. Never underestimate inertia. Make it easy for the other side to do as little as possible.
- Preparation is 90% of negotiation. Gather as much information about the deal as you possibly can, evaluate all the key variables, and understand which concessions you can trade.
- Know the other parties risks and use them. If you are an agent for someone else you may say "the thing your client has to be worried about is ________". If they have not discussed this risk with their client they may want to settle to avoid the risk.
- In making your arguments, rarely fire all your guns off at once. Arguments are stronger when built incrementally.
- Always hold back a closer or two. One or two facts or arguments you can use when you sense the other side is close to a deal but needs that final push. If you are a broker and your client is going to buy this week whether this seller is willing or not, that is a great deal closer.
- Have comparables with proof. If you are buying a car and you know the other dealer will sell you the same car for $200 less, tell them so. Tell them the name of the dealer and salesman.
- If someone is totally unreasonable, don't negotiate. Tell them to keep you in mind if they come down in price (or whatever). Negotiating when they are way out of line starts you out at way too weak a position.
- If you are representing someone else in a negotiation, get your clients agreement in writing to a target deal before hand. Otherwise, when you get them a great deal, they may decide they don't like it after all. Your credibility is the one that takes the hit.
- Even when you are unsure, speak with authority, speaking louder than usual and giving the impression that you have done this many times before will close deals with people who are not experienced.
- Remember that movement engenders movement when making a proposal.
- The best way to counter a proposal, is with your own proposal.
- Avoid soft exposing language when making your proposal. Eg "the price is -about- £100" or "i'm looking for £100". Be firm in your proposals - "the price is £100" or "i'll give you £100"
- Silence is an incredibly effective tool in negotiation. It increases the pressure on the other party, and will more often than not, encourage them to talk and give information away.
- Time is the ultimate lever in negotiation. Use it to your advantage wherever possible.
- Acrimony is a deal killer. People will refuse deals just because they are pissed. This is why divorces drag on for years. Avoid hostility at all costs. Even if there has been hostility in the past, start each contact upbeat, positive, don't hold a grudge. You will be respected more.
- Don't argue, or sell your proposals after you've stated them. You will only give away information and weaken your position.
- Never tell someone what you CAN'T do - tell them what you CAN do instead.
- Never talk about their figure or price, as this subconsciously validates it- always talk about your figure instead.
- Watch your body language - a skilled negotiator will pick up on non-verbal signals which may give away your true feelings