Mention the word “negotiate” and even the most experienced professional can sometimes feel out of their depth. However, in today’s competitive business environment, the pressure to secure value from deals is higher than ever.
Whether you’re faced with agreeing terms within a new client contract, suppliers looking to increase prices or an employee’s request for a pay rise, the ability to use win/win negotiation skills can make all the difference in the long term success of your negotiations and future business relationships.
In order to a reach a win/win solution, here are 7 top tips to help you negotiate effectively and find a resolution that is acceptable for both parties.
1. Realise that your counterpart’s needs and wants are not the same as yours. Much of the work that leads to successful win/win negotiation takes place before the parties actually meet. Plan your strategy and understand what’s driving the party you’re negotiating with and where their priorities really lie.
Then, take a look at your own strengths, weaknesses and bottom lines. How far can you afford to negotiate and when should you draw the line?
2. The negotiation should be a discussion of how to achieve a mutually agreeable outcome, not a selling exercise. By starting every negotiating encounter in a co-operative, congenial, friendly and respectful manner, there’s a good chance the other side will respond in kind. Sharing information during the opening phase can help develop mutual trust and place you in a stronger position to trade. It will also help to identify commonality between parties; something that can be referred back to if the negotiation gets difficult.
3. Open high but credible. Whilst it is beneficial to get the other side to declare its opening position, make sure you have an opening offer as a way of starting discussions. There is a strong relation between aspirations and outcomes, so set high but realistic goals.
4. Prepare and expect to compromise. Of course it’s natural to want everything your way but this isn’t generally realistic. While it’s important to stick to your guns, if one party comes away from the negotiation upset with the outcome, you haven’t accomplished your goal; finding a compromise that everyone can work with, which may hinder your relationship in the future.
5. The ultimate goal of negotiating is convergence. Reaching your negotiation objective isn’t just about making concessions; it is the movement by both parties to reach an agreement that creates additional value beyond what is at the negotiating table. If the negotiation is getting into troubled waters, don’t forget the value of ‘hidden’ common ground.
6. And finally…finalise a contract that is mutually beneficial for both parties. The most tangible direct product of a negotiation is an agreement that clearly captures the decisions reached and outlines the steps for its implementation. However, even with the best will in the world there will often be elements of the negotiation that can be difficult to resolve. The most important thing to remember is that at the end of a win/win negotiating session, both parties should feel like they’ve accomplished something positive.