Business Development Series Posted by David McDermott

Here are the three Golden Rules proven to make you a more effective negotiator.

Rule 1: Never concede, always trade

Why should you be expected to give something for free? In negotiations, there’s always a power balance. Were it otherwise, the wholly powerful party wouldn’t need to negotiate. They’d simply make unilateral demands of the wholly weak.

So, if you are asked for a concession or wish to volunteer one as a way of getting things going, make it conditional on obtaining something in return. In your planning for any upcoming negotiation you should think through what these potential trades might be. Ask yourself, “If they ask me for X, what am I going to ask for in return?”

Additionally, effective trades involve you getting back more value than you give, because what you give has leverage. This brings us to Rule 2.

Rule 2: Identify and use your levers

A lever is something that costs you less than the value the other party ascribes to it. The simplest example is where sales organisations ‘bundle’ additional low-cost extras with a product to maintain or increase the price. Those extras are cheap for them to provide, but a buyer would have to pay a comparatively higher price to acquire them separately.

The key to identifying levers – yours and theirs – is again in the planning stage. List all the negotiable issues, rank them in terms of your priority and try to estimate the other party’s priorities. Differences in priority for individual issues indicate levers for you and for them. These can then be traded to deliver higher value gains for both sides – true win/win negotiation.

Rule 3: ‘No deal’ is better than a bad deal

Many organisations spend as much time trying mid-term to re-negotiate unprofitable contracts as they do negotiating new or renewal business. In the heat of the negotiating room with the contract dangling seductively within reach, it’s so very tempting to agree final concessions just to get the deal done. And then live to regret them.

Effective negotiators know their walkaway position, and aren’t afraid to step back when it’s reached. They have already calculated the point when what was a profitable prospective sale will turn into a loss-making contract. They have also identified a Plan B, sometimes called a fallback or BATNA (Best Alternative to a Negotiated Agreement) – actions that will seek to replace this deal entirely if agreement proves impossible.

So, is that it?

No, of course not. After this 60-second tutorial you know some of what to do in your next negotiation, but that’s not the same as knowing how to do it! And there’s far more to negotiation than just our three Golden Rules. For all that, we’ll need more than a minute of your time.

Our ‘Negotiating to Win/Win’ programme will help you develop plans to implement our three Rules, and other techniques used by skilled negotiators. There’s a realistic simulation with expert feedback to help you practise those skills and ‘real-case’ planning to put you in a better position for your next negotiation.

If you’d like to know more than just 60-seconds worth, please get in touch via the ‘Contact Us’ tab above.

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