Negotiation

Get a higher return of your time

The basic
The process of seeking an agreement where terms acceptable to all parties are elusive (fixed) at least not immediately obvious (expanding benefits)
Getting what you want from other people (Balance, integrity, patience)

Stages in negotiations
Before Planning During
Opening Counter Opening Discovery Devising Solutions Reaching an agreement

Set the tone

Key skills

Creative collabora tion

Play the game

After
Follow up / Follow through

Two common phrase

Would you take $x rather I would give you $x If that the best you could do

Get out of situation

Thats interesting Tell me more Why would you say that Why would you do that Why would you ask that

Think critical
Key questions We cant afford that? Hide the excitement! Is that your best price? Dont make the first offer ! Power of the middle point !

Rules
If you follow certain rules / principles you will rarely feel the pain the losers feel ! Regret, something often experienced by nonprofessional negotiators who fail to recognize that there are rules to follow when resolving conflict.

The Resolution of Conflict by Mutual Compromise

In today's competitive business environment, an absence of negotiation - or negotiation skills - is perhaps the single largest contributor to the lack of success. The changing nature of the buyer/supplier relationship in this increasingly challenging marketplace means all business people need to be ultra sophisticated negotiators. Of course good negotiation isn't about you Winning and someone else Losing. A satisfactory outcome leaves both sides feeling that they haven't compromised too much, felt threatened or unnecessarily pressurised, or made sacrifices that they didn't want to.

The Resolution of Conflict by Mutual Compromise

It is about reaching a Win-Win resolution. People now expect to negotiate and see the process as a positive relationship builder, rather than a potential threat. Principled negotiation can achieve a solution that is acceptable to all parties involved, which of course, encourages repeat business. Good negotiation skills are not just an asset in the traditional sales person / customer situation. In all areas of life, with colleagues, employers, even your own family, being able to negotiate well will allow you to get what you want without damaging your relationships. A lack of ability in this area can be the single largest contributor to preventing people and businesses getting what they want (and need).

Rules for successful negotiation

The rules are intended to identify the techniques available to control and influence events to the individual's own advantage. They also provide a good defense against aggressive negotiators, thereby producing better agreements with fewer expensive concessions. Everyone feels that they know how to negotiate, just as everyone knows how to kick a football. But try explaining the off-side rule to a beginner and compare that with understanding the subtleties of defensive negotiation, it is then that the need for clear rules becomes more important.

# 1 - Dont negotiation
Don't. (Negotiate) unless you need to. Always evaluate your needs honestly and buy / sell hard Never, if at all possible negotiate, as it always requires compromise, which costs Some people are tempted to negotiate too soon, just because the other party says this is the negotiation phase - doesn't make it so. Work out your ideal position and don't be afraid to state it straight away.

# 2 Never negotiate with yourself

People regularly try to second guess the other party and in doing so minimize their own expectations i.e. Ideally I want to be paid Rs10k for this, but maybe they don't have that much. If I ask for Rs10k or nearest offer, it might sound less aggressive - this is the start of negotiating with yourself. If you start reducing your expectations from your ideal before you even see the whites of their eyes, you will always end up with a lesser, over-compromised deal. Start out with your ideal and wait for the other party to ask for a lower figure.

# 3 Never accept the first offer.

There is almost always a different (better) offer behind it. Don't forget they will be instinctively (or professionally) trying not to break rule 2 - so their opening stance will obviously be leaning towards their ideal (perfect) position - with probable room for maneuver. Also, be aware, that you can sometimes annoy the other party by accepting their first offer; if you accept too quickly they will think they should have asked for more, resulting in their perception of a lose / win conclusion (they lost, you won).

# 4 Never make the first offer

Let the other make the first offer (If you can help it!) It leaks your bottom line straight away. Always ask the other party What is your ideal (or target) price? If you are backed into a corner - or a I asked you first situation occurs, make the offer under protest and don't break rule 2. State your ideal position i.e. your list price if you're selling or your lowest target price if you're buying.

# 5 Listen more & talk less

Good negotiators lead by listening, not talking. Let the other person ramble on even if it sounds like rubbish, you must bide your time and bite your tongue. Continued silence will provide you with the opportunity to pick off their position by their leaked messages of movement. Don't forget, whilst you are listening you can't leak your own position and give them the advantage!

# 6 No free gift
Always ask for something in return. No one values a free gift for long (it immediately decreases in value once it has been offered), and a free gift today becomes tomorrows starting point. Don't forget free gifts are not always money, but can be the disclosure of useful information or even giving up your time too easily. If someone want some thing from you they should work for it. They give you something in return - Discount, information, cooperation
i. ii. Todays free gift is the starting point for someone else Its an additional extra sometime next time

# 7 Salami effect
(i.e. itemising every element of the deal and pricing it). Start with a complete value-orientated price e.g. materials, labour, clean-up and a 5-year guarantee Rs 10,000. Not Rs 3,000 materials, Rs 5,000 labour, Rs 1,000 cleanup etc The other party will always know where to buy cheaper materials, then query your labour rates, say they'll do the clean-up themselves and forego the guarantee - thank you very much! So a Rs 1,0000 deal easily becomes Rs 2,000-materials, Rs 4,000-labour etc. That's the Salami effect! Only salami when, and as far as you are requested to. Never 'band your expectations - it leaks your bottom line i.e. I am looking for a 10-15% discount. Which one do you think you are more likely to get? Yep, it's going to be closer to 10% than 15%!

# 8 Avoid the rookie regret

Don't forget the 3 differences. Cost is how much the concessions cost you, price is how much you want to charge for it and value is what its worth to the other party i.e. The cost of this tap washer is Rs 2, the price to fit it is 10 minutes of my time, which is Rs 10, the value to the other party is that it doesn't ruin their bathroom carpet and destroy the living room ceiling plaster at Rs 500 replacement. Aim for the super win-win where both parties get high value concessions at low cost i.e. We will finish the job early if you pay 100% up-front in cash. Everyone walk away with the deal saying could I have done it better 1. If I am giving a consesion to a person what will I get 2. What is it worth to the other person 3. If I know what is cost me and worth to the other person what do I want in return: of equal cost to me and equal value to the other

# 9 Never make a quick deal

Say 'maybe', a quick deal usually ends up in regret. Check your understanding of their offer, by repeating it back to them. It may be that the other party think that they have seen an advantage for them (or mistake by you) you have missed, so give yourself time to check the proposed agreement thoroughly. Never be afraid to take a short break and review your position before concluding proceedings.

# 10 Dont disclose the bottom line

Never disclose what was your limit Before, during or after the meeting. Not before you start, not during the discussions and never (ever) after a successful win-win conclusion. By doing this you will always be giving the other party an undue advantage over you. People learn their negotiation skills from their interaction with you. They also learn your limitations and abilities in post negotiation analysis. So don't let them know how you work under any circumstances - keep them guessing about your no-deal positions and they will have to move more towards you than you will towards them.

How To Negotiating Like an Expert

How To Negotiating Like an Expert

What makes a successful negotiator? What do they do differently from the rest of us to get the price they want, while still leaving their customers feeling that they're getting a good deal? Simple five-step process can help maximize your results each time you negotiate

Step 1: Get into the right frame of mind

Be in the right frame of mind. Believe that your products or services are worth the price you're charging? If no, then you won't be able to negotiate successfully. If you believe that your products are worth the price they charge will walk away with more deals at full price. Those of you who think your products are too expensive, on the other hand, will continue to sell at a discount. If you who are willing to put in the effort, it will help make negotiation easier, and more natural.

Step 2: Hold firm

Top 20% of sales people - never cave in on the first round. So don't give in to what your prospect is asking for right away. Negotiation is a game. It's the "art of the deal." And to make those people happy, you must be willing to play. Nothing frustrates negotiators more than a sales person who caves in and drops their price on the first round. If a client asks for a 20% discount and you immediately say yes, they walk away feeling two things: 1. The price must have been inflated to start with; and 2. I should have asked for bigger discount. Next time, I will!

Step 2: Hold firm

Neither of these outcomes is good for you. So the next time your prospect asks for a reduction in price, instead of just giving in, try responding with one of the following instead:
I can appreciate you're looking for the best deal, but I can tell you that we've already given you our best price. You're smart to be looking for the best deal, but our pricing is always competitive, and I just can't go any lower. A discount? (in a surprised tone)

Learn how to hold firm, and practice your responses in advance.

Step 3: Repeat
Some clients will press ahead with their request for a discount even after you've given them one ! The vast majority of them, however, are just looking for assurance that you really are giving them the best possible price, and there is no room to move. In other words, they want to make it a little uncomfortable for you. Hold firm. Work to reassure your customer that they're getting the best price, and remind them of all the hard work you've both put into the deal. Try something like: We've been 6 months putting this project together, I would hate to see it not go ahead because we can't settle on price; or I knew you'd be tough, so we provided aggressive pricing up front. I would hate to see this not go ahead because we haven't been able to meet your budget.

Step 4: Take their mind off the bottom line

If after all this your prospect is still pushing for a discount (and 40% of them will be), then find something else to give them that doesn't reduce your price.
Free shipping. Extra manuals or training. A client profile on your Web site.

What you choose will be specific to your business, your markets and your client base. The key is to have the list of things you're willing to offer prepared in advance, so you can draw on it during the negotiation. It's hard to think creatively in the heat of a negotiation, so planning ahead could give you a ready-made solution that leaves both you and the client feeling satisfied with the transaction.

Step 5: The last line of defense

Finally, if your client is still asking for a discount, you may have to give it to them in order to close the sale. But before you do, always ask them one of the two following questions:
"What is important to you about an x% discount? "Why is an x% discount important to you?"

These questions will flush out any last details that could help you find a different way to structure the terms and pricing, which will allow you to keep your price while letting the customer walk away with their needs met as well.

Step 5: The last line of defense

Never reduce your price without getting something in return.
Getting something in exchange for a pricing concession is key to managing customer expectations that future discounts will be easily dished out. As with the "no money" concessions above, what you get in return for a price reduction will be unique to your business and markets, but could include references or case studies, a bigger order, introductions to senior level executives or cash up front. Again, whatever you ask for, prepare the list in advance so you can respond quickly and smoothly.

Get a firm verbal agreement from the customer that this discount is all they will need to get the deal done. Try asking them something like "I'm not sure if I can get you this price, but if I can, is it fair to say that we can go ahead?" OR "I'm not sure I can get this discount for you. If I can, though, are you willing to sign the agreement this week?"

5 Things You Should Never Say While Negotiating

Where do you loose

Speak Softly: Whenever you negotiate, remember that it pays to stay calm. Every entrepreneur spends Some time haggling, whether it is with customers, suppliers, investors, or would-be employees. Most business owners are street smart, and seem to naturally perform well in negotiations. You probably have a trick or twosome magic phrases to say, perhaps that can help you gain the upperhand. Often, the moment you get into trouble in a negotiation is when something careless just slips out. If you are new to negotiation, or feel it is an area where you can improve, check out these tips on precisely what not to say.

1. The word "between."

It often feels reasonableand therefore like progress to throw out a range. With a customer, that may mean saying "I can do this for between $10,000 and $15,000." With a potential hire, you could be tempted to say, "You can start between April 1 and April 15." But that word between tends to be tantamount to a concession, and any shrewd negotiator with whom you deal will swiftly zero-in on the cheaper price or the later deadline. In other words, you will find that by saying the word between you will automatically have conceded ground without extracting anything in return. Dig Deeper: The Art of Effective Negotiation

2. "I think we're close."

We've all experienced deal fatigue When you signal the other side that you are ready to settle on the details and move forward. The problem with arriving at this crossroads, and announcing you're there, is that you have just indicated that you value simply reaching an agreement over getting what you actually want. A skilled negotiator on the other side may well use this moment as an opportunity to stall, and thus to negotiate further concessions Unless you actually face extreme time pressure, you shouldn't be the party to point out that the clock is loudly ticking in the background. Create a situation in which your counterpart is as eager to finalize the negotiation than you are. Dig Deeper: Creating Win / Win Negotiations

3. "Why don't you throw out a number?"

Never be the first person in a negotiation to quote a price. Let the other side start the bidding, which will provide you with an advantage. A negotiation is often closer to what the first mover proposed than to the number the other party had in mind; the first number uttered in a negotiation has the effect of "anchoring the conversation." And one's role in the negotiation can matter, too. (In the book Negotiation, Adam D. Galinsky of Northwestern's Kellogg School of Management and Roderick I. Swaab of INSEAD in France write) "In our studies, we found that the final outcome of a negotiation is affected by whether the buyer or the seller makes the first offer. Specifically, when a seller makes the first offer, the final settlement price tends to be higher than when the buyer makes the first offer." Dig Deeper: Bargaining for Advantage

4. "I'm the final decision maker."

At the beginning of many negotiations, someone will typically ask, "Who are the key stakeholders on your side, and is everyone needed to make the decision in the room?" For most entrepreneurs, they have the joys to call the shots? Yet in negotiations, particularly with larger organizations, this can be a trap. You almost always want to establish at the beginning of a negotiation that there is some higher authority with whom you must speak prior to saying yes. In a business owner's case, that mysterious overlord could be a key investor, a partner, or the members of your advisory board. For once, pretend like you aren't the person who makes all of the decisions. Dig Deeper: 7 Tips for Masterful Negotiating

5. Abusive language."
The savviest negotiators take nothing personally; they are impervious to criticism and impossible to fluster. Entrepreneurs often style themselves as frank, no-nonsense individuals, and they can at times have thin skin. But whenever you negotiate, remember that it pays to stay calm, to never show that an absurdly low counter-offer or an annoying stalling tactic has upset you. Use your equanimity to unnerve the person who is negotiating with you and if (s)he becomes angry or peeved, don't take the bait to strike back. Just take heart: You've grabbed the emotional advantage in the situation. Now go close that deal. Dig Deeper: The Ultimate Guide to Negotiating

Negotiators try to get the best deal from other

Rolling concession
Description Other party attempts to get just one more things But one more item keep on coming in

Counter tactics Get all issues before agreeing Dont concede Trade Withdraw all previous concessions and go back to the drawing board

Hot and Cold (low reactor)

Description Low use of support and disagree behaviors Common in procurement Unskilled give in and talk to much Counter tactics Be aware of it Stay calm Use Seeking information (questions)

The offer you must refuse

Description Acceptable offer on a critical issue Intended to make you accept the next point out of guilt

Counter tactics Power is in the head (guild / pressure) Negotiate each issue in isolation (w/o emotion) Use feeling commentary to express openly

End