The Principles of Negotiation

Need to negotiate a sales contract, a business deal, or a salary increase? It can be tough, but with the right state of mind, you can perform any negotiation successfully.

Here are a bunch of great tips on successful negotiation I have heard from colleagues or read in books.

The Fundamentals of Negotiation

  • If you ask for something before a contract is signed, it is called “negotiating.” If you ask for something after a contract is signed, it is called “begging.” It is better to be a good negotiator than an expert beggar.
  • Everything is negotiable, but everything has a price.
  • You don’t get what you deserve; you get what you negotiate.
  • You can get anything in life if you help enough people get what they want.
  • Negotiate at the proper authority level with someone who can say “Yes.” Otherwise, your negotiations can get lost in the translation to the top. Avoid having to negotiate with multiple people and levels. Only negotiate with the main decision maker.
  • If you want something, ask for it. Good negotiators do not put their best terms on the table first.
  • Focus on the relationship. It is important that the relationship is still there once you are through with the negotiations. The relationship is also the key to future interactions.
  • Terms are just as important as dollars. Many prospects focus just on rates, but the other issues – such as project scope & service agreements – can have just as much importance.

The Four Attributes of Negotiation

Power is the ability to get the other side to offer terms favorable to you. The top two power sources are competition and the printed word. If your prospect knows that three of their competitors want your business, then that prospect will likely want your business too. And remember: always question the printed word. Just because it is written does not mean it isn’t negotiable.
Ninety percent of the negotiating happens in the last ten percent of the time allotted. Negotiating will go on forever unless one side imposes a deadline. The corollary is that time works against the person who does not have it. Therefore, never reveal your real deadline and never negotiate when you are in a hurry.
Knowledge is a combination of expertise and information regarding the wants and needs of the other side. How and when is the person with which you are dealing evaluated by his/her supervisor? How experienced is the person? What is this person’s potential budget range? Does this person have other selections from which to choose?
Leverage is your ability to get the prospect to want your business on favorable terms. You can use power, time, and knowledge as leverage in your negotiations.

Negotiating Tactics

At the Start of the Negotiations

The Flinch
To perform the flinch, express shock and dismay at what the other side is presenting. This may force the other side to adjust.
Feel/Felt/Found Technique
This is a way of acknowledging another person’s feelings without giving any ground. It is also a way to disagree without being disagreeable. The script: I understand how you feel; others have felt the same way, but when they found out more about us, they moved forward with us.
First Offers
As a general rule: never accept the first offer. Simple as that.
The Vise
The purpose of the vise is to squeeze the price range up or down in your favor. When the other person names a price, you should respond: “You’ll have to do better than that.” However, be prepared for the retort: “How much better do I have to do?”

During the Middle of the Negotiations

The Trade-Off
Never give a concession without getting a concession. Otherwise, the balance of power will be out of your favor.
The Set-Aside
When you are deadlocked on an issue, set it aside and come back to it after you have reached an agreement on easier issues. Leaving the toughest issues for last means allowing the negotiations to gain momentum. By the end, the other side will be more flexible.

At the End of the Negotiations

When you reach the end and are asking yourself if you should go through with the terms, ask yourself: What is my Best Alternative To a Negotiated Agreement?
The Walk-Away
Your ability to negotiate is tied to your ability to walk away from the deal. This is why you should always give yourself options.

Photo by: polandeze

Author: Mike Lee

An idealistic realist, humanistic technologist & constant student.