Negotiating is the ‘poor cousin’ of ‘selling’; simple as that.
It is highly probable that you would prefer not to have to ‘negotiate’ if you can do a deal using your standard terms and conditions. This reluctance to negotiate is most likely if you are from somewhere outside the classic negotiating centres of the World, like South America, Middle East and Asia. For people in these places ‘negotiating’ is a way of life. For most of us (mainly Caucasians) however, negotiating can seem like a nightmare…a sort of verbal game of chess or poker in which our every move is being read by some clever, cunning opponent. He who blinks first loses’ and all that stuff.
Well, if you’re fool enough to enter into a negotiation without knowledge of the basics you will get crushed. On the other hand, the basic behaviours of successful negotiators have been researched and are very easy to copy and this is what this article is all about. There are four basic things that top negotiators do all the time and four things that ‘average’ negotiators do which top negotiators avoid getting dragged into doing.
Before we get into the four ‘do’s and four ‘dont’s something needs to be said. Because it is a cold hard truth that, in business, if you ‘sell effectively’ in the first place, you probably won’t have to negotiate. Effective selling is based on finding out what a customer wants to buy (in other words the specific problem he wants solved) and then focusing, laser-like, on that alone. Most sales are messed up to the point at which a negotiation is required, because the seller couldn’t or wouldn’t shut-up talking about all the other spurious benefits of his product.
The golden rule of effective selling is: ‘Never miss a good opportunity to shut-up’.
But let us say (unhappily for you) that the straight-forward sale has been messed up and you DO now have to negotiate. First of all it is probably not, “all about the price” as so many of my clients tell me. Most negotiations are about value and not price. If you sincerely believe that price (and price alone) is what it is all about then you probably need an article on ‘haggling’ rather than negotiating.
The word ‘negotiation’ implies an ability and a willingness on your part, to vary your terms in some way. It is highly unlikely that you will make any progress at this stage by just standing on your side of the negotiating table (hypothetical or not) making demands and digging your heels in. So start by using the most powerful persuasive tools you have: “Questions”. The first behaviour of top negotiators is that they ask a lot of questions.
A ‘question’ gets you information. And you can’t start ‘negotiating’ and investigating areas in which you might be able to vary your normal terms, until you get an idea of what is going on in the head of the other side. A top negotiator never makes a statement when she could ask a question. A top negotiator constantly seeks Information, Information, Information before and during every negotiation. A top negotiator will always be thinking, “Why did he just ask me that?” and will be saying things like, “Suppose we could offer you that concession…then would you be prepared to agree our contract period?”
Always think ‘questions’ rather than statements whenever possible.
Each question will potentially raise another agreed point or result in a rejection on the way to finalising the whole deal. There can be many such twists and turns on the way to a successful outcome. So the second ‘top-negotiator’ behaviour is to regularly summarise and agree the items covered so far. Failure to do this can and often does de-rail complex negotiations if summarising is either omitted or left to the very end. We, on our side of the table believe that something has been settled (sometimes days ago) only to discover this is not the understanding of our counterparty. Summarising throughout and at least once an hour, is the second noticeable behaviour of top negotiators.
Having advised you, a couple of paragraphs ago, to ask questions rather than make statements, I’m now – for the third ‘top-negotiator behaviour’, going to back up a little and tell you to open up a bit too. Many of the executives I teach to negotiate, tend to take the ‘ask questions’ theme to the extreme and virtually refuse to give away anything when the other side asks them questions. This is not what it’s all about. In fact a top negotiator learns to treat both questions and answers like ‘negotiating currency’.
Of course, before sitting down to negotiate, he will have decided what information can be released to the other side and what highly confidential and sensitive information cannot. But having decided what can be given away, he is quite careful how it is done.
He will often, having answered two or three questions in a row from the other side, say, on being asked a fourth question, “Well OK…now we’ve answered three of your questions, if I answer this one as well I will need you in turn two answer three important questions that we have and in particular…..”
So the process of asking questions and surrendering information is played very carefully…nothing is given up unless something is gained in exchange.
The fourth and final ‘top negotiator behaviour’ is the way in which impossible requests are handled.
For most of us, faced with an unexpected outrageous request from someone we would like to do business with, our reaction is an outright immediate rejection: “Oh please!…you REALLY can’t be serious with that request…the answer is NO!”
However, skilled negotiators never give such an instant knee-jerk response.
Instead they spend time, before they say NO, explaining the situation and never give advance warning that a rejection is coming up.
They will give an explanation first and say something like, “Reducing the contract period to one year is a very interesting proposition, John. As you know, the way we operate in this market sector is to offer every customer exactly the same 3 year contract. As you have already said, we are quite flexible on price, size and color so that your needs are fully accommodated. On the other hand the contract period is kept the same for all so that no customer can accuse us of ‘horse-trading’. If we vary it for one customer we will lose the trust of all the others who will inevitably find out. So for this reason I hope you can understand why the contract period must be the same for all.”
This willingness to give a clear explanation before rejecting a request, usually results in a more ready acceptance than a straight ‘NO’ followed by an explanation if required.
So your four desirable negotiator behaviours are:
1) Seek information and ask questions constantly
2) Summarise regularly to avoid late misunderstandings
3) Be prepared to surrender information but always exchange it for reciprocal favours
4) Explain the background to something you must say ‘no’ to before you say, ‘NO’
On the other side this article are the far more common behaviours which you may find yourself drifting towards and which you should try to reduce or eliminate.
The first of these is the natural human desire to argue. After a day or so ‘negotiating’ the teams are getting a little tired. Suddenly ‘somebody’ says something ‘daft’ to which the obvious reaction is something like, “Oh do shut-up!” The problem is somebody does actually say it! “Don’t you tell me to shut-up! I’ve been sitting here listening to your drivel for the past 7 hours!” “You’ve been listening to MY ‘drivel’ …I like that!” “Look here, I want to say something!…We came to see you in good faith and……” and so on and so on. A slow, spiral descent, into a negotiating black hole.
The automatic charge and counter-charge of a classic argument, each trying to out-do the other, will not get you anywhere.
In short: Arguments can be ‘fun’ but they are not persuasive negotiating behaviours: AVOID.
The second ‘poor behaviour’ indulged in by average negotiators is the speed at which counterproposals are produced in response to the other side’s suggestions. To explain the folly of doing this, a negotiator must appreciate one particular facet of human psychology. That is that the point at which another person is least receptive to another person’s idea is if he has just presented one of his own.
So, if a counterparty has just presented a proposal: “How would it be if we agreed to a five year deal with your company and all our servicing is guaranteed to go through your workshops?” and you reply… “Well maybe….but we were thinking of a completely different approach…..” , then you are already en-route to a pretty well guaranteed disagreement in the next few minutes.
As a top negotiator you can avoid this ‘average behaviour by ALWAYS being seen willing to consider and discuss the other side’s suggestions – however crass you may think they are – before introducing any counterproposal yourself.
The third poor behaviour is the false notion – beloved of untrained business-persuaders and amateur negotiators- that facts are persuasive. The result of this folklore is that, the more somebody disagrees with you or fails to accept your proposition, the more facts you pile up in order to prove your point. Alas this is not what happens in the collective mind of those in the other side of the table.
The more facts that are brought in to support a proposal, the more confused the other side becomes and the more – horror !! the more the price or the cost will become the central feature.
Knowing this interesting ‘fact’ however can provide you with an interesting and effective negotiating lever.
Next time you need some way to demolish or weaken a proposal from the other side simply act as if you are not convinced by the initial argument. You will find, inevitably, that another suporting fact will be produced. But you still act ‘unconvinced’. Keep this going: “I’m still not sure that this is a good idea”.
You do this until four or five new supporting facts have been produced.
You will then discover something very interesting is happening: each new fact produced by the other side is successively weaker than the one before. It won’t take long, therefore, until a very weak supporting fact is produced. At this point you say, “Hang on just a moment….are you really saying that you can’t deliver on Saturday because we only open Monday to Friday?..well that’s easy we will get somebody there to meet you! So there’s actually no serious issue.”
You will discover that it is very rare for a counterparty to reverse back into their previous stronger supporting facts and you win the point. Just beware of being trapped into this ‘ploy’ yourself.
Finally, when it comes to unhelpful negotiator habits, there’s the old standby which, alas, is spoken by nearly every business executive on the planet at some time every day. We negotiators call it an ‘annoyer’.
An annoyer is an annoying phrase or sentence thrown into the mix in a misguided attempt to give the other side confidence. The two most common are, “To be honest with you…..” and “Look we are offering you a really great deal here”.
In the first case, the psychological effect on the other person (or persons) is, “So are you saying that up until now you haven’t been honest?”
In the second case, telling somebody that you (in your opinion anyway) are making a ‘great offer’, has a very negative effect on the counterparty mind. Far from convincing the other side that you are making a generous offer, it actually implies, in one sentence, that you feel that the other side is not being ‘great’ if they reject your offer.
Both of these ‘annoying’ phrases and others in a similar vein are aimed at increasing confidence. But they have a very bad effect on other people’s perception of you as a negotiator.
So in summary, whilst incorporating the previous top negotiator behaviours take good care to avoid the following average behaviours:
1) Defend and Attack arguments of any sort
2) Your own counterproposals introduced, without first discussing the other side’s proposals
3) Too many facts to support your proposals
4) Using very common and unintentionally annoying phrases.
Being a top negotiator isn’t difficult if you behave as you should. Sometimes you won’t win -that’s life- so when the deal looks daft from your point of view be prepared to walk away. And the more times you are prepared to walk away you will be amazed how often the deal chases you out of the door.