For any business to grow and thrive, whatever your sector, product or service, it is vital to know how to negotiate.
I love negotiating and being a smart negotiator has been a big part of making me successful in business.
For me, creativity and fairness are fundamental to success, so aim for a deal that is a win-win. If your negotiation result is “I win-you lose” you may not keep your customer or supplier for very long.
Whatever deal is under discussion, using these six techniques will help show you how to negotiate smarter:
- Build a relationship
The process of negotiation will be smoother and lead to more favourable terms when you can relate to the other party on a personal level.
Keeping track of their lives, both professionally and personally, remembering where they went on holiday and details about their family, will all help develop a good ongoing relationship.
Using these details to build a personal bond will help when you are negotiating a term or condition, because you will have built credibility and they know you on a personal level and vice versa.
- Open at your maximum
Start at your highest price for your product or service and be willing to negotiate down. Once you state a low price, it is very difficult to negotiate this upwards.
People expect to pay for value, so you must be able to logically argue why your product or service is a particular price – as an example, the size, the quality, the number of uses, longevity.
You could even consider doubling the price if you think the other party wants to negotiate, and if they believe it has good perceived value, you may be able to close at the higher price. Ask with confidence.
- Use silence
Silence can be very powerful and if you can become comfortable using it, this will make you a better negotiator.
Once you have made your presentation, stop, let your point sink in, and wait for the other party to respond. Give them time to think about your offer. Don’t be concerned if they don’t instantly reply.
During the silence, keep your facial expressions and body language neutral so you don’t reveal any nerves or doubt.
- Offer better terms
Be flexible with the terms you offer. Will options like cash payment, payment up front, or an advance payment in installments be so attractive they help close the deal?
Consider when you are selling a property – a cash offer is always more attractive than a purchaser with a mortgage and a chain.
How can you make your offer more attractive to the other party – or what can you ask for from them that will make it more attractive to you?
- Give – Get
This is all part of developing a win-win strategy.
When you are preparing for the meeting, consider all the small concessions or incentives you could give and those you might want in return to help to seal the deal.
Is there something you could offer which would be valuable to them and wouldn’t cost you very much?
For example, once when I checked in late (10.30pm) to the Doubletree Hilton in Amsterdam, I asked for a room upgrade, mentioning I would be checking out at 7am. They offered me a suite with a beautiful view. It didn’t cost them because the suite would have been empty otherwise, and it created goodwill and turned me into a Hilton fan.
How to negotiate the close on your deal is really important.
Don’t be afraid to ask for the sale. Many people do such a good job throughout the negotiation process then forget to ask for the close.
When you plan your meeting, prepare answers to all the objections you might need to overcome, and consider how long it might take the other party to agree.
It is often helpful to have an additional incentive to offer to close of the deal.
Hopefully these tips on how to negotiate will help make your negotiations a win-win for both parties.