2 Let us never negotiate out of fear. But let us never fear to negotiate. John F. Kennedy
3 Negotiating is a skill that can and must be learned. Being a good negotiator is not something that you are, but is something that you become.
4 Negotiation Defined The concept: Two partners working together to transact business in ways that are mutually beneficial and that leave the door open for future business transactions between the partners. A good negotiation will result in a deal that is fair and balanced so that both parties to the deal benefit
5 Characteristics of Good Negotiators Good negotiators are typically patient, fair, well informed, cooperative, innovative, imaginative, and intuitive.
6 Characteristics: Quickly see and get to the heart of the matter Solve problems in real time Think clearly under pressure Depersonalize comments that are made and see through emotionally charged language to the issues in question Listen carefully and with patience Approach the process with an open mind Develop alternative options and solutions Watch for verbal and non-verbal cues Think critically Recognize assumptions, rationalizations, justifications, and biased information that are presented as facts
7 Characteristics: (Continued) Take the long-term/repeat business perspective. Give themselves and their negotiating partner room to maneuver Maintain a sense of humor and a positive attitude throughout the Consider issues from the other side’s point of view as well as your own Understand that timing is important to success in negotiating Prepare, prepare, prepare
8 Preparation is Key When Negotiating Going into a negotiation unprepared will almost guarantee a bad result. Questions: What do we want? What does the other side want? What are we willing to give up in order to get what we want? What is the other side willing to give up?
9 Questions: (Continued) What do we want? What does the other side want? What are we willing to give up in order to get what we want? What is the other side willing to give up? What is at risk here for us and for them? How much do we know about the other side and their needs? How much do they know about us? Is there anyone on their team who might be an advocate for us? Is there anyone on our team who might be an advocate for them? Do we have any “hot button” issues? Do they?
10 Questions: (Continued) What we don’t know about the other side and who can help us learn what we don’t know? Are there factors that might affect the outcome that we or they have no control over? What are the factors? What is our bottom line – at what point do we just walk away? What is their bottom line? What are the easy issues we can use to generate early agreement? What are there easy issues? What are we willing to give up in order to get what we want? What is the other side willing to give up?
11 Conducting Negotiations Negotiate in Stages (3 stages): Building the Foundation – laying the groundwork for the negotiating process; state your case; both parties must see the need for negotiating before proceeding; explain the need for negotiation in terms of how the other party will benefit.
12 Negotiate in Stages (3 stages): (Continued) Building the Structure – explain the mutual benefits based on both you and your partners expectations and the specifics concerning your needs and your partner’s needs. Completing the Bridge – bargain over price, delivery dates, warranties, and other negotiable factors.
13 Select the Time and Place with Care The best negotiations allow both sides plenty of time to consider offers, options, proposals, and counterproposals. The best location for a negotiation is a neutral site
14 Project an Advantageous Image The impression that you make on your negotiating partner is critical. People are typically more willing to deal with someone they can relate to. Do the research on your negotiating partner. Know how to dress based on your partner company’s culture.
15 Create Favorable Momentum Momentum is the impetus or tendency of something to go in a certain direction. If you can get the negotiation going in the right direction from the outset, it will tend to keep going in the right direction the rest of the way. You want momentum working in your favor from the outset.
16 Additional Strategies for Use During the Negotiation Once the negotiation has commenced, you want to keep it going in the right direction. Think critically Listen to what is said and what is not said Keep your partner’s needs and hopes in mind Be patient Ignore personal comments Leave yourself room to maneuver
17 After Making the Deal - Follow Through As soon as you conclude one negotiation, you should begin paving the way for a future negotiation with the same party. Negotiations have more than one purpose: First – make the deal in question at the moment Second – generate additional future business with your new partner Follow through and perform effectively