Being skilled at negotiating is important in both your business and in your personal life. We are going to talk about some great tactics that will help you in your negotiating skills…you might even consider it fun. I love to negotiate.
Are you a person that hates to negotiate? Are you fearful that you could blow a deal because you are afraid to negotiate and perhaps end up leaving much on the table?
If you hate to negotiate and avoid it at all cost, most likely you simply do not have the tools and techniques that are needed to build your confidence when negotiating. Confidence is the key to being a great negotiator. Here are some great tools that I have been using for year that will most assuredly make you a great negotiator.
Tool #1 – Always Let the Other Party Go First
So many people race to state their position first in the negotiation yet there is absolutely no advantage for you to do so. You miss a huge opportunity when you do this because you have no idea where the other party is going to start.
I want you to encourage the other party to go first and state their position. That gives you the ability to react to it. You might be surprised as to where they start in the negotiations. It might be quite a bit higher than you expected. And with that as a starting point you can negotiate them up.
My advice to you is be quiet and listen first. I have found that when you request the other side to go first, they are often eager to do so.
Rule #2 – A Good Negotiation Consists of a Little Pain by Both Parties
You know you have negotiated a good deal when both parties walk away feeling just a little bit of pain. To create a good, long-term relationship with the people you are negotiating with, you must make them feel like they got a good deal too. If you push for everything and give in on nothing, you might feel great, but the other party feels horrible about the deal.
The art of negotiating is in finding that balance where you give enough to keep the other party motivated and interested in not only getting the deal done but feels good about doing business with you in the future (or would tell their friends to do business with you).
I have seen in my career that a hard-fought negotiation strengthens the relationship between the two parties. And when the deal is done, you both get to celebrate its success.
Pro Tip: Always have a few items when you are heading into a negotiation that are a list of things that are non-negotiable, and others that might not be so important to you. They might be important to the other party, but you’d be willing to give up to make the deal.
Rule #3 – Put It in the Parking Lot
The parking lot is one the best tools in a negotiation. This is a place you can put issues that you are not ready to negotiate on yet until you see how the rest of the negotiations are going. You revisit the items in the parking lot at the end of the negotiations. If the negotiations are really working in your favor, then you are going to be more likely to give on these less important issues. But if the negotiations are not going so well for you, then you might negotiation much harder on some or all these parking lot issues.
I also use the parking lot for issues that both parties are stuck on and can’t seem to get over. Once you see where the negotiations are going, you (or the other party) may be more likely to give in on those items you were stuck on.
I always like to be the first to bring up the concept of the parking lot when I am negotiating. It has a funny way of giving you more control in the process. As you go through your points, you are the one who suggests, let’s put this in the parking lot and come back to it later.
Pro Tip: Before you even start the negotiations, have a few deal points that you think are good candidates for the parking lot.
Applying These Tools to Your Business
Take a deal that you are currently working on (or a deal you have worked on in the past).
- Make a list of a few deal points you can give in on that don’t mean much to you but would be important to the other side.
- Make a list of a few deal points you think would be good candidates for the parking lot tool.
- Lastly, experiment with the notion of the parking lot. Put several potentially more important “bargaining chips” in the parking lot, ready to go, to give you power in the deal. Have the cognizance of them when you are negotiating and do your best to move items into the parking lot first. Use them as negotiating points later.
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If you would like more entrepreneurial advice and guidance, please listen to my podcast at: www.entrepreneurnow.com/podcast.