We are continually having to look at our costs, what is necessary vs obsolete as we emerge back from lockdown and embrace a hybrid world.
Whether you are having to renegotiate your office lease, your copier agreement, since you have gone 100% paperless or your phone contract, here are some practical negotiation skills which I have used for the last 25 years.
Negotiation skills are a vital part of a business leaders’ skillset. You have to be able to communicate and persuade your customers and your suppliers. If you don’t negotiate well, you may miss an opportunity to minimise cost and maximise your margin.
The definition of negotiation is to deal or bargain, to arrange, manage, transact and conduct. Regardless of your sector, product or service, you must master negotiating in order for your business to grow and thrive.
Creativity and fairness are both fundamental to negotiating success – and with every negotiation you should be aiming for a deal that is a win-win. If you end up with an “I win/you lose” result – or vice versa – you’re not going to have the best results.
Here are nine tips about how to negotiate smarter.
Be mindful of how you sound. Our words account for only seven per cent of your impact when you communicate, while the tone of your voice and your body language account for 93%. People can read you by how you speak and how you hold yourself. This matters whether you are in-person or on a video call.
Do it in person or via video call
Whenever possible, negotiate in person, face to face, so you can read the other person’s body language, and make sure what they are saying matches with what you see. If you must negotiate on the phone, be mindful of your own body language and tone as well. People can still pick up signals by your voice even if they can’t see you. When I do sales training, I always tell my team who work on the phone to smile, because people can tell.
Prepare, prepare, prepare
Preparation is key. How much you prepare depends on the importance and value of the deal. If it’s a big deal, do you research and create scenarios. If it’s a small deal, conduct some quick research.
- What is at stake for the person on the other side of the table
- Their aims and goals
- Your aims and goals
- What is important to them
- What is important to you
- The background to the negotiation
- The structure of your negotiating position
Speech highlights: effective negotiation for your business
Research market comparisons
You need to understand your position and their position in relation to the market.
With every negotiation, I find three companies offering the same or similar service: “the competition”, I establish the best price for the services offered, and compare my proposal to the market and/or sector.
If you have alternatives of a, b, and c, you will always be in a strong position because you will have choice.
Practise and rehearse
Once you’ve done your preparation, planning and research, practise and rehearse your negotiations. Role play in your office with staff, other executives or peers. Decide what you want to say and rehearse and polish your position until you can deliver it convincingly.
Think about whether a brief PowerPoint or a spreadsheet as a one page hand-out helps you to outline your position. In my experience simple, brief, and to the point has been the most successful. Decide what is most compelling and rehearse using your chosen tools.
Plan potential scenarios, outcomes and potential objections and script answers and solutions for each: “What if they say this, what will I say?”
Read more: Negotiating skills for a win win
Sometimes small things can make a big difference to the success of negotiations. Here are a few things to consider:
- anticipate and match the number of people who will attend the meeting. If the other party brings three, figure out the most three qualified people who will add to your credibility and add value to the negotiation.
- sit at the corners of the table not across the table if you can
- mix the two negotiating teams at the table, so they’re not facing each other and there is no “us” and “them”
- round tables are better than rectangles if possible – and no table at all is the best. Consider walking and talking – movement can really make a difference
- room, environment, light, temperature and refreshments can all make an impact on a long and tedious negotiation
Anticipate their bottom line, their break-even, what they have at stake, and who else they have to persuade to get the deal approved.
Will you be talking to the decision maker, or will they have to sell it to their boss or a committee or board? How can you help the person you are sitting across the table to sell your deal? Can you provide them with a case study or business case to help them sell the deal?
Have patience. Sometimes the person who stays at the table the longest wins.
If you are in a rush, you won’t have time to maintain your position and you might not get the best results.
Think of market traders: they keep you talking until you buy, and entertain you to increase your order. They have all the time in the world to spend with you and make you feel the most important customer they have.
Be ready to walk away
If the deal is not right, be bold and walk away. You need to know at what point you will walk away.
The best example is negotiating to buy a car. If you walk away from the car dealer, nine times out of ten, they call you the next day to accept your offer. Again, have a plan a, b, and c, so you don’t become set on one option and can’t negotiate properly.
There may be a time when you should be prepared to walk away: when you will just break even, or even lose money. You must know the points you will not compromise on in order to make the deal.
By using these simple but effective techniques on how to negotiate, you can increase both the enjoyment and positive results of negotiating so that everyone feels good about the deal concluded and, in the best cases, wants to do more business together.