As we know negotiation is a process, and the essence of a negotiation is to achieve a win-win agreement. I will be discussing 7 tactics of negotiation in a business.
- Negotiation Itself
This process occurs when differences in cost, deliverables, terms, and conditions are resolved. A principled or successful negotiation is a win/win agreement that satisfies all involved parties.
It is important to remember the following during negotiation:
- Try to understand the distinction between selling and negotiating.
- Know when to begin negotiating.
- Make sure you utilize a wide variety of options in creating an agreement.
- Evaluate your process of negotiating.
- What Goes Wrong in Negotiation
Even the most influential and astute negotiators make mistakes when the stress is high. Being clear about what can go wrong in a negotiation can help us avoid the common pitfalls.
Below are trademarks of a negotiation gone wrong:
- If you negotiate too soon agreeing before you have heard all the needs and objections
- If you negotiate too much agreeing to change to many aspects of your proposal
- If you negotiate under an ultimatum having to make a decision with too little time to obtain all the information you need to prepare.
- Not thinking win/win in long term relationships or thinking win/win in a one-time negotiation relationship.
- The other party uses bluffing techniques, delays as a tactic or says they are ready to buy when they really aren’t.
- The client doesn’t know that they need and has no criteria to evaluate the success of the deal.
- Ethnical or legal problems/ dealing with someone from a country where bribes are standard practice
- Not clear on what you want (what your “Best Alternative to a negotiated Agreement”(BATNA) is or what you will do if you do not do this.
(See Getting to Yes: Negotiating: Agreement without Giving In by Rodger and Uryfor more on the idea of a BATNA)
- When to Begin Negotiations
Usually, it is best to begin negotiations after you have:
- a candidate who agrees to a conditional commitment. i.e “I really want to work for you and your organization.”
- proposed an offer, a suggestion or a package that includes all the parameters i.e cost, deliverables, terms and conditions e.g “Starting salary of $45,000, two weeks’ vacation in your first year, and a company car.”
- sold the feature and benefits of the entire offer or package and heard an objection which you are not able to overcome with other benefits. For instance, maybe you’ve heard the candidate say, “I want very much to work for you but I’m struggling with taking an offer I just received that is $6,000 more than your offer.”
- confirmed that all the objections to your offer have been expressed. An example would include asking, “Is starting salary our only sticking point? Other than the starting salary, do you want to take this position?
Once you have met the criteria for when to begin the negotiation process, evaluate your current situation by referring to two things, situations or experiences you want.
For most people who have not met the four criteria listed above yet, it is important to work through them before moving forward.
- What We Negotiate
There are many things that we tend to negotiate for. These are as follows:
Agreements, assignments, attendance, budgets, career development options, complaints, contracts, costs, hiring, employment, salary, expenses, grievances, doctors, perceptions, layouts, objectives, maintenance, layoffs, quotes, purchases, reorganization, report to be delivered, promotional offerings, sales, schedules, travel, politics, prices, appraisals, specifications.
- When to Use Negotiation Options
This involves two variables such as cost and delivery time. All too often people simply adopt the most obvious position without spending the time to think through all the possible alternatives such as:
- First choice: This is the best time. Choose to first negotiate.
- Give away: When you have no flexibility in the package you have offered, try to add something of value to the customer that doesn’t cost you much.
- Split the difference: It focuses on one variable both parties give in some; it does not have to be an equal split.
- Walk away: Stop the negotiation because one of the parties will not win.
During the negotiation process or even before the negotiation commences, a pen is advised to generate options to enable him/her arrive at a win/win situation with his/her opponent.
It is imperative that prior to any negotiation, the negotiator creates at least three possible options. You will have more to offer in the conversation if you have done your homework first.
- How do you Prepare for a Negotiations
Good negotiation requires advance preparation, an understanding of the underlying assumptions and needs to be satisfied on both sides. It also requires a basic knowledge of human behaviour and mastery of a range of negotiating techniques, strategies and tactics.
Another element of preparing for a negotiation involves deciding whether to use an individual or a team as your representative. This decision needs to be considered separately for every negotiation and will always depend on what the other side is doing.
The next step in preparing for a negotiation involves choosing a chief negotiator. Ideally, this person should have experience and training in negotiations, as well as a strong background in the area of the problem to be negotiated.
- The Negotiation Process
Fisher and Ury gave conducting negotiations according to the process of ‘principled negotiation’ There are four main beliefs:
- Separate the people from the problem. The idea should be for both sides to work together to tackle the problem, rather than attacking each other.
- Focus on interests rather than positions. The natural tendency in many negotiations is for both sides to state a position and then move towards middle ground, for example, dickering over the price to be paid for an antique.
- Generate a variety of options before deciding what to do.
- Base the result on objective criteria. No one will be happy with the result of a negotiation if they feel that they have been taken advantages of.