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© Sigma Management Development Limited 2005 1 Presented By: PAUL DAVIS Negotiation Skills © Sigma Management Development Ltd 2004.

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Presentation on theme: "© Sigma Management Development Limited 2005 1 Presented By: PAUL DAVIS Negotiation Skills © Sigma Management Development Ltd 2004."— Presentation transcript:

1 © Sigma Management Development Limited Presented By: PAUL DAVIS Negotiation Skills © Sigma Management Development Ltd 2004

2 © Sigma Management Development Limited Negotiating Techniques IF you give me a bit of what I want THEN I can give you a bit of what you want Always trade values (£) Never trade a value without getting one in return GIVE TO YOU TO THEM Low Value/ Cost (easy to give) High Value (worth a lot) GIVE High Value Low Value/Cost

3 © Sigma Management Development Limited The Negotiation Framework PROPOSE BARGAIN DISCUSS PREPARE PREPARE DISCUSS PROPOSE BARGAIN COMMIT REQUIREMENTS RESEARCH “BUYER” “SELLER” COUNTER OFFER

4 © Sigma Management Development Limited Preparation and planning skills Knowledge of subject matter being negotiated Ability to think clearly and rapidly under pressure and uncertainty Listening skills Judgement and general intelligence Integrity Ability to persuade others Patience Characteristics Of A Skilled Negotiator

5 © Sigma Management Development Limited Company, Competition, Likely Requirements Decision makers & Influencers The Politics & Barriers The Personalities People Behaviours Buying Motives ALWAYS BE PREPARED Research

6 © Sigma Management Development Limited  VARIABLEMAX £MIN £  EQUIPMENT  SERVICE  DELIVERY  TERMS  TOTAL PACKAGE £MAXMIN Prepare Variables

7 © Sigma Management Development Limited Negotiation Variables Grade your variables High-Important to you to obtain -Potential “walk-aways” Medium -More of these -Hope to achieve the top end of your entry point Low-Willing to trade near to your exit points -Not a give away NB: then view them from the other party’s perception

8 © Sigma Management Development Limited Buyer’s negotiating range Seller’s negotiating range Settlement range 110 The Negotiators Exit Prices Overlap

9 © Sigma Management Development Limited The Negotiators’ Exit Prices Meet BuyerSeller

10 © Sigma Management Development Limited Emotional Buying Motives LOGICAL Usage Specification Functionality Value Efficiency Performance Safety Flexibility Quality Price NEEDS EMOTIONAL Personality Prestige Fear Novelty Tradition Price Status Promotion Good Rapport Brand WANTS

11 © Sigma Management Development Limited The Negotiation Framework PROPOSE BARGAIN DISCUSS PREPARE PREPARE DISCUSS PROPOSE BARGAIN COMMIT REQUIREMENTS RESEARCH “BUYER” “SELLER” COUNTER OFFER

12 © Sigma Management Development Limited Propose AIM HIGH Your proposal is your maximum opening stance

13 © Sigma Management Development Limited IF……. Discuss THEN OFFER….. COUNTER OFFER

14 © Sigma Management Development Limited Components of a Proposal Components of a proposal ConditionOffer Non- specific Specific Non- specific

15 © Sigma Management Development Limited Distinction Between Proposals and Bargains ProposalBargain ConditionNon-specific or specific Always Specific OfferAlways non- specific Always Specific

16 © Sigma Management Development Limited Constructive Debate Statement Assurance Question Summarise Demonstrate Listening

17 © Sigma Management Development Limited Examples Of Destructive Debate Styles Threat Attack Blame Point Score Interrupt/block Assume Irritate

18 © Sigma Management Development Limited Signals “It would be extremely difficult to meet that delivery date” “We would not normally extend our credit facility” “It is highly unlikely that my boss will agree to a free upgrade” “As things stand our prices must remain as listed” “I can’t give you a better discount on your current volumes”

19 © Sigma Management Development Limited Signals “It would be extremely difficult to meet that delivery date” “We would not normally extend our credit facility” “It is highly unlikely that my boss will agree to a free upgrade” “As things stand our prices must remain as listed” “I can’t give you a better discount on your current volumes”

20 © Sigma Management Development Limited Proposals Use of Brevity It might be possible to do something We could perhaps look at that Key Message Verbage detracts from the message, and often gives your opponent the view you are in a a weak or uncomfortable position

21 © Sigma Management Development Limited The Negotiation Framework PROPOSE BARGAIN DISCUSS PREPARE PREPARE DISCUSS PROPOSE BARGAIN COMMIT REQUIREMENTS RESEARCH “BUYER” “SELLER” COUNTER OFFER

22 © Sigma Management Development Limited PROPOSE BARGAIN DISCUSS PREPARE PREPARE DISCUSS PROPOSE BARGAIN COMMIT REQUIREMENTS RESEARCH “BUYER” “SELLER” COUNTER OFFER The Negotiation Framework

23 © Sigma Management Development Limited Structured Questions Ask open questions & listen What Who When Why Where How To What Extent To What Degree How Important Do Can Could Would May Will Shall Should Is Does Might Did Have HasOPEN CLOSED

24 © Sigma Management Development Limited QUALIFY ASK 1ST OPEN QUESTION LISTEN TO IMPLICATION IN ANSWER BASE NEXT QUESTION ON ANSWER TO FIRST REPEAT LISTEN HIT HOT SPOTNOT IMPORTANT UNTIL

25 © Sigma Management Development Limited The Art of Listening The person speaking is not necessarily the person in control Listening/talking is the bilateral process Listening includes watching Impediments to Overcome Resistance to change Thinking one’s own thoughts instead of listening Wishful hearing Making unwarranted assumptions Habitual secretiveness

26 © Sigma Management Development Limited TALKING BIAS ASSUMPTION EMOTIONS LISTENASSIMILATEREHEARSE REPLY

27 © Sigma Management Development Limited Summarising Summarise throughout (every three minutes) Use their language not yours Seek agreement and clarification Test any assumption

28 © Sigma Management Development Limited PROPOSE BARGAIN DISCUSS PREPARE PREPARE DISCUSS PROPOSE BARGAIN COMMIT REQUIREMENTS RESEARCH “BUYER” “SELLER” COUNTER OFFER The Negotiation Framework

29 © Sigma Management Development Limited BEHAVIOURS  DOMINANT HOSTILE WARM SUBMISSIVE FIGHTERLEADER HELPERTHINKER

30 © Sigma Management Development Limited ABOUT YOUR CUSTOMERS  DOMINANT HOSTILE WARM SUBMISSIVE LOGICAL THINKER FIGHTER HELPER Arrogant Aggressive Ruthless Dictatorial Opportunistic Conceited Impulsive Doesn’t allow mistakes Fair minded Firm Decisive Motivational Optimistic Open Sees others’ points of view Allows 1 or 2 mistakes Negative Pedantic Bureaucratic Cautious Nit-picking Cold Defensive Blocking Gullible Deferential Self-effacing Passive Submissive Ineffective Manipulative Weak LEADER

31 © Sigma Management Development Limited  DOMINANT HOSTILE WARM SUBMISSIVE PEOPLE BEHAVIOUR and how to deal with them Remain calm Be assertive Ask open questions Pace up Be well prepared Mirror behaviour Pace down Ask open questions Involve Be patient Don’t “sell” Be directive Keep focused on the topic Ask closed questions Put agreements in writing Check progress Check reality of commitments

32 © Sigma Management Development Limited Rapport Building GET ON THEIR WAVELENGTH Big PictureOr Detailed Lots of OptionsOr Follow Procedures InformalOr Formal Free WheelingOr Take Control DON’T TREAD ON TOES OF BELIEFS Politics View of the World Behaviours

33 © Sigma Management Development Limited Rapport Building FIND THEIR HOT BUTTONS What’s important to you? What do you want from…..? SPEAK THEIR LANGUAGE Speed Volume Inflection Use their words

34 © Sigma Management Development Limited BODY LANGUAGE IN NEGOTIATIONS Quotation from Sir John Collins, Dixons Chairman: “I would never have a serious discussion or negotiation without seeing somebody because the body language is every bit as important as what you are saying to me” Times Interview September 2002.

35 © Sigma Management Development Limited 2005 COMMUNICATIONS 10 % 20%30%40%50% 7% Verbal Visual 25% Verbal & Visual 45% 15% Dramatised Verbal Body Language Retention

36 © Sigma Management Development Limited BODY LANGUAGE 50-70% OF OUR COMMUNICATION IS NON-VERBAL READ IT…..USE IT! LOOK FOR CLUSTERS LOOK FOR CONGRUENCY OR NON- CONGRUENCY

37 © Sigma Management Development Limited ROOM LAYOUT DESKS? CHAIRS POSITIONS OF POWER? COMFORT ZONE/BODY SPACE LOCATION?

38 © Sigma Management Development Limited Negotiation Tactics & Styles Key Message A TACTIC RECOGNISED IS A TACTIC DISARMED

39 © Sigma Management Development Limited Styles of Negotiation ‘Tough-guy/Soft Guy’ duo who alternates between aggression and kindness to tempt the negotiator into dealing with the, ostensibly, softer guy. Over-valuing a feature of the deal - it could be future profits, for instance - and using this to claim a higher price for themselves. Setting pre-conditions for negotiation so as to gain ground before the actual negotiations being - managements, for instance, demand that a strike cease before they will negotiate, governments demand a return to the status quo before they will negotiate a disputed event (seizure of territory etc).

40 © Sigma Management Development Limited Styles of Negotiation High initial demands to push the area of settlement towards themselves and to shock the other negotiator into reassessing his expectations. Making threats (veiled or blunt) to coerce the other negotiator into movement - sales people often warn that unless the order is filled today they cannot guarantee supply; union officials often tell management that they must meet the union demands or face the prospect of a long strike. Setting pre-emptory deadlines that they know can hardly be met in order to hustle the other negotiator into quick decisions, or, sometimes ominously, to provoke themselves into a preferred choice of action - ‘unless you withdraw your forces by 11 a.m. today, a state of war will exist between us’.

41 © Sigma Management Development Limited Check your variables Aim high Give way slowly Never give a concession without one in return Listen, don’t talk Negotiating Rules

42 © Sigma Management Development Limited Use structured questions Never trust your assumptions Use power gently Confirm the agreement Achieve win-win THERE IS ALWAYS ANOTHER DAY Negotiating Rules

43 © Sigma Management Development Limited SPECIALISTS IN PARTNERING AND SUPPLY CHAIN RELATIONSHIPS


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