Ten Tips for Successful Negotiating
1. Develop "negotiation awareness" Successful negotiators are assertive and challenge everything. They know that everything is negotiable.
"Challenge" means not taking things at face value. It means thinking for yourself. You must be able to make up your own mind; as opposed to believing everything you are told. On a practical level, this means you have the right to question the asking price of that new car. It also means you have an obligation to question everything you read in the newspaper or hear on television. You cannot negotiate unless you are willing to challenge the validity of the opposing position.
Being assertive means asking for what you want and refusing to take "no" for an answer. Practice expressing your feelings without anxiety or anger. Let people know what you want in a non-threatening way. Practice 'I' statements. For example, instead of saying, "You shouldn't do that," try substituting, "I don't feel comfortable when you do that."
It should be noted that there is a difference between being assertive and being aggressive. You are assertive when you take care of your own interests while maintaining respect for the interests of others. When you see to your own interests with a lack of regard for other people's interests, you are aggressive. Being assertive is part of negotiation awareness.
2. You must become a good listener. Negotiators are detectives. They ask probing questions and then shut up. The other negotiator will tell you everything you need to know - all you have to do is listen.
Many conflicts can be resolved easily if we learn how to listen. The catch is that listening is the forgotten art. We are so busy making sure that people hear what we have to say that we forget to listen.
You can become an effective listener by allowing the other person to do most of the talking. Follow the 75/25 Rule -- listen 75 percent of the time, and talk only 25 percent of the time. Encourage the other negotiator to talk by asking lots of open-ended questions -- questions that can't be answered with a simple "yes" or "no."
3. Be prepared. Gather as much pertinent information prior to the negotiation. What are their needs? What pressures do they feel? What options do they have? Doing your homework is vital to successful negotiation.
4. Have high expectations. People who aim higher do better. If you expect more, you'll get more. Successful negotiators are optimists. A proven strategy for achieving higher results is opening with an extreme position. Sellers should ask for more than they expect to receive, and buyers should offer less than they are prepared to pay.
5. Be patient. This is very difficult for Americans. We want to get it over with. Whoever is more flexible about time has the advantage. Your patience can be devastating to the other negotiator if they are in a hurry.
6. Focus on satisfaction. Help the other negotiator feel satisfied. Satisfaction means that their basic interests have been fulfilled. Don't confuse basic interests with positions: Their position is what they say they want; their basic interest is what they really need to get. Always make your opponent think they have won!
7. Don't make the first move. The best way to find out if the other negotiator's aspirations are low is to induce them to open first. They may ask for less than you think. If you open first, you may give away more than is necessary. A good example of this is something I learned in real estate investing a long time ago; ‘the first to mention price first always loses!
8. Don't accept the first offer. If you do, the other negotiator will think they could have done better. (It was too easy.) They will be more satisfied if you reject the first offer -- because when you eventually say "yes," they will conclude that they have pushed you to your limit. Therefore, always leave yourself a number of concession points or a financial spread when dealing with numbers.
9. Don't make unilateral concessions. Whenever you give something away, get something in return. Always tie a string: "I'll do this if you do that", in the legal arena this is known as “Quid pro Quo”. Otherwise you are inviting the other negotiator to ask you for more.
10. Gage's Law of Success: Always be willing to walk away! Never negotiate without options.
If you depend too much on the positive outcome of a negotiation, you lose your ability to say "no." Clients often ask me, "James, if you could give me one piece of advice about negotiating, what would it be?" My answer, without hesitation, is: "Always be willing to walk away."