What is negotiation? It is a conversation or a discussion through which we want to create a win-win situation for all involved parties. It sounds a bit technical but it is a part of our everyday routine. We knowingly or unknowingly keep on negotiating with one person or the other.
When your alarm is blazing in your ears and you tell yourself, “Let me sleep for 5 more minutes”, what are you doing? You are negotiating with yourself. Your lazy self and your disciplined self are trying to reach on an agreement which is acceptable to both. When you are running late for office but your mom wants you to eat something first, and then you promise her that you will grab a bite before reaching office is a negotiation between you and your mom. When you ask your dad for a new bike and he says, “I will buy you a new bike if you get 90% marks in your board exams”, it is a negotiation between you and your dad.
When you go to a shop to buy something, what happens between you and the salesperson is negotiation. When sales target is being discussed in the office meeting that is a negotiation between you and your team. And I can go on and on about what is negotiation. But yeah, you have got my point.
Negotiation is a very routine part of our life so we should be the masters of negotiation. But sadly that is not the case. We may be able to negotiate very well with our friends and family but when we go to a client, something snaps, something happens and Bam!! We lose the deal. Why? Something must be lacking… Let’s see what…
Before we actually start the process of negotiation, the first and foremost thing we need to do is Homework. Research, research and a lot of research is required. You need to carefully study the complete background, history, strengths and weaknesses of the other party. Collect all the material and information you can get about them and spend a good amount of time on every little detail even if it seems trivial. You never know which information will help you when. No matter whether the negotiation is a personal one or a professional one, if you want to be a winner, do your homework seriously.
When you are loaded with all the information, don’t forget to take along your Confidence. Confidence is a must for every winning situation. If you are not confident about what you are saying, no matter how hard you try, it shows in your words or actions and the other party takes it as a negative sign. No matter how good your offer is, if you don’t sound confident, the negotiation will head to a wrong direction.
Now that you have packed your confidence with your homework in the safe of your mind, we are ready to go. There are a few other things that we have to keep in mind while we are negotiating to come out as a winner.Adam Grant and Adam Galinsky, two management professors, have proposed 6 best negotiation practices after a lot of research. (Reference: Forbes.com) Let me take you through them.
- Share Information: Everyone knows “what goes around comes around”, but we don’t apply this during negotiation. When we are negotiating, we are naturally very guarded and cautious. We don’t want to share too much information but at the same time want the other party to open up. How is that possible? To create an atmosphere of trust and openness, you will have to initiate the process of sharing information. This is not to say tell them everything but just a little bit and if you don’t want to tell them anything about the deal, talk about unrelated things. Talk about your hobbies, interests and let them open up too. When you talk about such stuff, the other party finds you genuine and starts to trust you. This helps you to be in a winning position.
- Rank order priorities: When you start a negotiation, you know what you want from it, your priorities are pretty clear. But Grant and Galinsky tell you to rank order your priorities. For e.g. If you are looking for a flat, your priorities would be reasonable price, convenient location, spacious house, etc. Now what you need to do is rank order these priorities in the order of most important to least important. If you have a limited budget your first priority would be reasonable price, followed by may be, convenient location and so on. When you rank order, priorities are pretty clear for both the parties.
- Go in knowing your target price and walk away price: Your target price or term is what you really want from the deal and your walk away price is what you can settle for. For e.g. your target price may be to get a 1bhk flat for 30,00,000 but you would be ok even if you have to pay 40,00,000. When you know your range, negotiation becomes easier.
- Make first offer: Contrary to the popular belief, Grant and Galinsky have proven that the party that makes the first offer is more likely to be in a winning position because the first offer acts as an “anchor” around which both the parties start to negotiate. For e.g. If you make the first offer of 30,00,000 that would be the price around which you and your agent would automatically start discussing and this will increase your chances of getting a deal that is near your target price.
- Don’t Counter too Low: If somehow you were not able to make the first offer, don’t counter too low. For e.g. your agent made the first offer for 40, 00,000, if you immediately make a counter offer of 20, 00,000, your agent would not agree and you will have to increase your offer to somewhere around his offer. In order to have the deal in your favor, make an offer that is not too low or too high to create a counter-anchor. In our example, instead of 20,00,000 you can make an offer of 30,00,000 to tilt the deal in your favor.
- Make more than one counter offers: Gant and Galinsky have proven that making more counter offers leaves both the parties more satisfied. Both the seller and the buyer want to get a sense of achievement from the negotiation. When many counter offers are made, the seller feels that he has struck a hard bargain and the buyer in turn feels that he got the best price or best deal, which makes both of them happy and more likely to involve in further business with each other. On the other hand, if the very first offer made by the first party is accepted by the second party, it would leave the first party dissatisfied and doubting that they could have got a better deal, had they offered lower price. This concept is called “Buyer’s Remorse”. To prevent yourself and your customer/seller from experiencing buyer’s remorse, never accept the first offer even if it is what you want, keep on making counter offers to get better results and a sense of satisfaction.
Be confident, do your homework, follow these practices and you will win all the negotiations in your life and business!!!
Wishing you Peace and Abundance…