Just so we agree on the definition of negotiation, Encyclopedia.com defines the process as trying to reach an agreement or compromise by discussion with others or finding a way over or through an obstacle or difficult path. Professionals are constantly involved in the process of hammering out contracts, coming to agreement in meetings and setting deadlines. I believe that it is fair to say that if you can’t negotiate effectively, you will lose business, the respect of your team members and associates and pay more than you have to for the things you purchase.
There are many books and articles written on the subject and techniques of negotiation. However, my experience has led me to try and avoid some of the basic and obvious mistakes that are made in the negotiation process. From many techniques, I have prioritized five (5) critical mistakes.
Here is my list:
1. Being Afraid to Offend – Trying to secure the best deal for yourself, your team or your organization is tough. You may be reluctant to reject other people’s proposals. Bear in mind that arguing and negotiating are different processes. The goal of a negotiation is for both sides to reach an agreement, whereas in an argument each party makes the case for or against a position. Keep in mind that that negotiations are a process. Sometimes a long and difficult process.
2. Failure to Listen – To be a successful negotiator, actively listen to the other person. Make sure that you ask clarifying questions to have a clear understanding of the points being made. Active listening skills help you to learn about what the other person wants, discover shared interests, and determine how far apart your positions are.
3. Assuming Non-Negotiability – Everything is negotiable and nothing is off the table in negotiation, and it pays to take your context into account. If you think of everything as negotiable, you’ll have a lot more options! This may take courage, for example to ask for a discount from a clearly marked and priced item. The worst thing that can happen is that the other party says no. However, you may be able to rephrase the request in a fashion that may be more acceptable.
4. Issuing an Ultimatum – Once you use the words “This is our last, best and final offer” there is nowhere else for the discussion to go other than deadlock. The chances of finding a compromise are much slimmer when you issue an ultimatum like this, because you back the other party into a corner. In extreme circumstances, you may have to risk deadlock if the other party continues to “chip away” at your position.
There is a difference in issuing an ultimatum and setting a new deadline. Artificial deadlines are acceptable strategies in larger negotiations. The downside is that it puts you under time pressure. The upside is that both parties are focused on reaching an agreement within the time-frame, which can accelerate the process of finding a compromise.
5. Price Fixation – Business negotiations are usually about price or cost. But if you go into a negotiation process fixated on price or cost, you risk backing yourself or the other party into a corner. Price or cost is important, but is often just one aspect of a deal. Consider other terms such as delivery, installation, delayed billing, sole source, and discount for early payment or additional services.
It goes without saying that you must have a clear idea about what you want to achieve in a negotiation so that you can adequately prepare your key points and arguments. This preparation communicates to the other party that you are knowledgeable and must be taken seriously. If you are in a group negotiation, ensure that your team knows, in advance, who will handle certain points. Anticipate the other party objections and points so you can prepare the appropriate responses. And, bring all notes to the actual negotiation meeting.
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