Knowing how to negotiate in the best possible way can be quite a tool, even for those who are not hotshot CEOs negotiating multi-million dollar deals every day - meaning, all of us regular mortals.
1. DO YOUR HOMEWORK
The first thing I would do when I want to get anything, and I need to convince someone to give me this (close a deal at my quoted price, get the salary I want to get, sign up an agreement with me instead of my competitor), is to sit down and think about my goals for the negotiation, strategies to achieve those goals and the reasons the other persons can state to not give me what I want. Then I classify this into the reasons I cannot argue against (I try to put in as few as possible in this category) and then the ones that I can, in fact argue against. For all those things I can argue against, I make up specific, fact- based cogent arguments and even practice delivering them, so that I can do this in an unemotional manner while I have the actual negotiation. As you can clearly see, doing your homework is the name of the game here.
2. DON'T SPLIT THE PIE - EXPAND IT
Negotiation is often thought of as splitting the pie; in the sense that there is a finite number of things that exist to be partitioned, and these need to be split between the negotiating parties. This often leads to a grab all you can attitude which is truly counterproductive.
Instead, look at negotiation as an expansion of the pie. As you prepare for the negotiation, try and understand what is important to the other party relative to what is important to you. For example, in a job interview, getting the salary you want and being able to work from home a few days a week might be really important to you, while the employer might want someone that can join them as soon as possible, and has the exact experience in retail sales that you do. As you can see, different things are important to the two negotiating parties. Sometimes, this might not be obvious in the preparation stage, but will become evident in the course of the negotiation if you ask the right questions and listen well. Try to see how to increase the number of things on the table, and then you will realize that there are more things you can give to the other party, while not really giving up anything that is non-negotiable for you. Remember that a good negotiation outcome is one where both parties walk away from the table feeling like they got most of what they wanted; this is the key to doing business again.
3. DON'T BE DEAF
One of the keystones of good communication is also extremely important in negotiations - LISTENING. Listen not just to the words, but also to the tone of voice and non-verbal cues the other party is throwing out, which comprises about 93% of communication actually. Ask good questions, and use those questions to understand issues that are not already clear to you.
4. CATCH ME IF YOU CAN ... OR NOT!
Be honest and fair in all your dealings, because it is a small world, and you definitely do not want the person you are dealing with to find out later on that you have pulled a fast one on them. That kind of reputation can quite literally kill your career.
It is a fine line between being truthful and not revealing too much too soon, and a lot of practice is required to master this. In the meantime, a good rule of thumb is to not accept the first offer, because it is most likely that the person on the other side is simply testing the waters to see what is important to you. Also, if at all possible, negotiate from a position of strength, or act like you’re in a position of strength. Giving an impression of strength makes people less likely to ask for concessions and compromises. When you do concede a point, call it a concession. No one else is going to do it for you.
5. KNOW WHEN TO WALK AWAY
Sometimes, you might work really hard to reach a negotiated agreement only to realize a lot later that you have not in fact achieved the best outcome. The best outcome in some cases is to walk away.
Understand and establish your BATNA (Best Alternative To a Negotiated Agreement) before you begin negotiations. For example, if you are trying to buy a house that you really like, inquire about the price of similar houses in the area beforehand, and find the cost of the one most like the house you are actually trying to buy. Say this is $200,000 for a house with a pool. This, then becomes your walk away point, because the whole point of a negotiation is to achieve an outcome better than the one you can get without negotiating. If your seller does not drop the price below $200,000 you walk away and purchase the other house for that price.
Negotiation is a skill that is more important to a sales person than it is to most other people. Oftentimes, a negotiation boils down to getting a better price or a better deal, when in fact, the word, by itself, means a discussion aimed at reaching an agreement. Keeping this in mind, and using the pointers above to build value into your proposition will ensure that you are mostly successful in your negotiations. The difference between being mostly successful and always successful, depends on… no three guesses… practice.