There are good negotiators in all types of businesses and industries, from sports franchises to automobile dealers and in the government and military operations. There have been a plethora of books written on the subject, and expensive training classes over the last 20 years. But are they that relevant? What exactly do you need to know about being a better negotiator, and how can you avoid the common mistakes that even good negotiators make?
Most well-trained negotiators actually start out on the right foot. They spend most of their time in preparation and come to the negotiation ready with all of their options. Then, when it gets to the actual negotiation, they forget some simple principles.
Communication in a Negotiation
Your chance of being successful in a negotiation is largely dependent on your ability to understand the other parties’ position, so two-way communication is critical. Common mistake negotiators make is to completely withhold communication early in the game. Reciprocity builds trust, and by openly sharing information early in the negotiation, you can start the communication process off right. The key is knowing what information to share. Excellent negotiators openly share information that demonstrates they can be trusted, such as personal goals or family information without giving away their bargaining position. Getting the other party to share any kind of information is a useful thing, even if the conversation isn’t directly related to the issue at hand.
Negotiating by Priority
Priority and ranking systems are used to allocate resources, particularly in times of scarcity. But they can also be useful in negotiation. For example, when you are buying a car, you might focus on what things are most important to your — purchase price, interest rate, and car safety features. The salesperson will focus on their priority items — trying to get you to focus on what monthly payment you can afford. And while you do want an affordable monthly payment, you want a good purchase price so that you don’t have to take out a 7-year car loan to pay off the principal. Remember when you are negotiating by priority, you don’t need to show all your cards at first; you simply need to communicate what is important to you.
The Art of the Offer and Counteroffer
Negotiators who make the first offer come out ahead in the end. The biggest mistake 75 percent of business people are making is to hold off on showing their cards. The first offer that is made tends to stick in our head and we naturally hesitate to adjust too far above or below it. Making the first offer also demonstrates confidence, but you don’t want to be too aggressive either. If someone makes an offer that is embarrassingly off-base, you will need to prepare a counteroffer to reset the anchoring or starting point of the negotiation.
What is your strategy in negotiations? Knowing what you know now, how will you prepare differently for your next negotiation?
Shane Barker is a digital marketing consultant who specializes in sales funnels, targeted traffic, and website conversions. He has consulted with Fortune 500 companies, influencers with digital products, and a number of A-List celebrities.