We negotiate every day. Negotiation is not only for lawyers or commercial people.
Everyone tends to negotiate almost every day in a variety of things we do. Here are 9 keys for a successful negotiation that is practical, simple, and effective;
#1: Get as much knowledge as possible
You can’t get a good deal if you don’t know what you’re buying. When negotiating for the purchase of something, it’s important to do your homework and learn as much about that item before making any commitments or offers.
There are many ways to do research. Some ideas are;
– refer rates from the previous purchase
– shop around
– do online research
– check out competitor’s price
In case you don’t have time to prepare, don’t negotiate! It’s like going to a ‘Pasar Ramadhan’ when you are fasting.
Knowledge brings confidence.
Remember, the one with the most knowledge will win the negotiation.
#2: Be Patience
Urgency is a weakness.
You cannot get a great bargain when you’re rushing. If you rush over an item, you are more likely willing to settle for a lousy deal. Hence, plan properly and don’t wait to the last minute.
Negotiation takes time.
Calm down and wait for a good deal.
#3: Have More Options
Don’t simply fall in love with only one option. If you do, you will lose the rational perspective.
Keeping options allows you to compare all aspects of a deal until you find the right fit. Besides that, it will give you the confidence to negotiate or to walk away.
My winning story
I remembered, when I worked at Measat, I was handling a contract renewal to purchase goods valued at more than RM 10 million. For many years the Business Unit (‘User’) only purchase from one particular vendor (‘the incumbent’). And ‘quality is the main reason.
Upon negotiation of the contract, the incumbent agreed to reduce only 5% from the original unit price. As 5% discount was the department’s target, I could easily agree.
The user insisted to renew the contract.
However, I managed to convince the User to conduct tendering exercise and invited 4 vendors (including the incumbent) to participate.
Upon receiving the quotes from all, I was surprised. The incumbent turned out to be the lowest. And the best part, they reduced the price by more than 40%!
From this, you can see how the power of option helped in negotiation.
I don’t have to do much effort, and yet I get significant discounts. by showing the seller that I have options.
#4: Listen well
None of us knows everything; hence be careful with the assumptions.
When you listen to the other party, you make them feel respected and that will build trust. Here are a few ways for listening effectively;
- Open your mind
Don’t judge the person speaking and don’t critique their content. Focus on understanding the message.
- Listen for facts and feelings
Listen between the lines. What is the person feeling? What are his or her concerns?
- Eliminate distractions
Don’t look at your handphone or let your mind wander to other activities. Focus and tune in to that person.
- Remember important points
If required, take notes.
The more information you collect, the more solutions you will get.
#5: Ask the right questions
Questions open up communication and encourage people to share information. By asking the right questions, you can lead the people involved in the negotiation to a productive agreement.
Besides that, the one who controls the negotiation is the one who asks.
Simply ask a simple, direct, and open-ended question.
Below are some examples:
• Is this the best pricing or offer you can give me?
• How does our deal benefits you?
• Is that price firm?
• How much do you want to be paid?
• What would it take for you to agree to our offer?
#6: Take advantage of silence
Silence is golden.
Most people cannot stand dead air time. They become uncomfortable when there is no conversation between you and them. If you just sit back and wait, almost without fail, the other party will agree with your terms.
Silence can be one of your strongest negotiating tools.
#7: Look for commonalities
We go to the bargaining table with an intention.
For example, Sellers always want to get the highest price, buyers want to pay the lowest price. Employers want to pay the minimum salary to retain a quality employee; the employee wants to earn as much as possible.
Another key in negotiation is to look for some things in common.
Learn to find some common ground such as asking about their favourite sports, passions, interest, challenges, hobbies.
When you share a common interest or find a common ground with the other party, they will have a harder time getting a confrontation with you.
#8: Avoid getting emotional
I was in Procurement for more than 20 years, and negotiation is part of our job routines.
From my experience, negotiation can be stressful. And I had seen people get emotionally involved in their dealings.
As a result, learn how to turn it into a pleasant experience and everyone will be thankful.
#9: Stay honest
Most importantly, don’t be the kind of person who lies, sells damaged goods, or promises things that can’t be delivered.
Approach each business deal ethically.
Should anybody finds out that you’ve been dishonest, it will kill your credibility and reputation.
Final Word
Negotiation is a skill that can help you develop your career, secure a higher salary, and meet critical business needs.
Just remember that there are always choices to make in negotiation. And no consistent right formula.
Continuous practice is key to improving your negotiation ability.