Selling and Negotiation Skills

Syllabus
• Types of Negotiation
• Negotiation Strategies
• Selling Skills – Selling to Customers
• Selling to Superiors
• Selling to peer groups , team mates &
subordinates
• Conceptual Selling, Strategic selling
• Selling Skills – Body Language
 Reference Text
• Negotiations & Selling - by Sameer A. Kulkarni
• Getting to Yes - by Roger Fisher & William Ury
• Negotiations and Selling - by R.K.Srivastava
• Negotiation - Harvard Business Essentials
• Winning Negotiations - Harvard Business
School Press
 Negotiations – What about it?

In business you don’t get the success you deserve …….

You get the success you negotiate for.
 What is Negotiation?
• Negotiation is the means by which people deal
with their differences.
• It is often planned and a purposeful activity to
arrive at an agreement.
• The Latin word Negotiatus – Meaning “To carry
on Business”
• Negocios in Spanish means “Business”
• Negotiari in Roman also means to “To carry on
Business”
It is an important step in the Sales Process
Negotiation (Harvard Business Essentials)
•
 Negotiation - Some Definitions
• “It is a process by which the involved parties
or group resolve matters of dispute by
holding discussions and coming to an
agreement which can be mutually agreed by
them . It also refers to coming to closing a
business deal or bargaining on some product.”

Negotiations & Selling by Sameer A.Kulkarni

 Negotiation - Some Definitions
• Negotiation is the process where interested
parties resolve disputes , agree upon courses
of action , bargain for individual or collective
advantage, and /or attempt to craft outcomes
which serve their mutual interests.
Negotiation is usually regarded as a form of
alternative dispute resolution.
Negotiations & Selling by Sameer A.Kulkarni
 Negotiation - Some Definitions
• The trading of concessions , including price
reductions between supplier and customer , in
an attempt to shape a supply contract (sale in
other words)so that it is acceptable to both
supplier and customer.

Negotiations & Selling by Sameer A.Kulkarni

 Features of Negotiation
• At least two parties are involved
• The parties agree that there is a conflict of
interest
• The focus is on arriving at a mutual win-win
agreement –Negotiation is a conflict –solving
process
• Negotiators must have the behavioral and
analytical skills to succeed
Negotiations & Selling by Sameer A.Kulkarni
 When to Negotiate ?
• When two or more parties are doing business
and would like to arrive at a solution with
respect to price , service or quality
• When business risks involved cannot be
accurately pre-determined
• When a long period of time is required to
produce the items purchased
Marketing Management by Philip Kotler
 Types of Negotiations
• Distributive Negotiation
• Integrative Negotiation
• Principled Negotiation

Negotiation & Selling by Sameer A.Kulkarni

 Distributive Negotiation
• Known as competitive Negotiation
• Win-Lose Negotiation
• Zero-Sum Negotiation
• Tug of war Negotiation
 Features of Distributive Negotiation
• Chances are that the Negotiating parties are
meeting for the first time
• The negotiation could be a one time activity –
Purchase of a Car or house
• Win at any cost – Mostly Price based- Win of
one party is reflected on the loss of the other
party
• Long term relationship not a criteria
 Success Principles in Distributive
Negotiations
• Play your cards close to your chest – Share
just enough and no more information
• Gather as much information from the
opposite side as possible – information is
power
• Express intent and not eagerness to purchase
• Be realistic – don’t go over board on
negotiations and lose the deal
Negotiation and Selling by R.K.Srivastava
 Integrative Negotiation
• Known as collaborative negotiation
• Important to understand each others
requirement
• Co-operative approach to mutual problem
solving
• Win-Win negotiation
Features of Integrative Negotiation
• Focus is on creating value and claiming it
• Trade-offs are noticed to get what you value
most and let go less important factors
• Negotiation extends much beyond price and
delivery date
• Encourages long-term relationship
• Results in increasing the pie and try and get a
good share of the pie
 Success Principles in Integrative
Negotiations
• Focus on getting something of value to you while
letting go of something which has a lesser value
• Understand each others requirement and priority
• The goal is not to hurt your counterpart but to
help them with little cost to your self and vice-
versa
• Appreciate your counterpart’s problems and
have a problem solving approach
• Try and build bridges rather than burning bridges
Negotiation and Selling by R.K.Srivastava
 Principled Negotiation
• Known as interest-based negotiation
• More practical approach to negotiation
• Based on a problem solving approach
• Negotiation process focuses on fair needs and
not the desired wants

Negotiation & Selling by Sameer A.Kulkarni and Marketing Management by Philip Kotler
Features of Principled Negotiations
• Liberation of problem – Detach the people from
the problem
• Objectivity – Focus on interest not on position
• Determine alternate options – What if this does
not workout.
• Objective evaluation criteria – Being well
informed will help . Collect as much information
on the subject of negotiation to get the best deal.
Negotiation & Selling by Sameer A.Kulkarni and Marketing Management by Philip Kotler
 Concepts of Negotiation
• Any successful negotiation must have a
fundamental framework based on knowing the
following:
- The alternative to negotiation
- The minimum threshold for a negotiated deal
- How flexible a party is willing to be , and what
trade – offs it is willing to make
- Value Creation through Trade
Negotiation (Harvard Business Essentials)
 4 Key Concepts of Negotiations
• BATNA (Best Alternative To a Negotiated
Agreement)
• Reservation Price
• ZOPA (Zone Of Possible Agreement)
• Value Creation Through Trades
 Know your BATNA
• The concept has been developed by Roger
Fisher and William Ury
• It is one’s preferred course of action in the
absence of a deal
• Knowing your BATNA means knowing what
you will do if you fail to reach an agreement in
the negotiation
• Know your BATNA before the Negotiation.
 Know your BATNA
• If you don’t know your BATNA – you will not
know if the deal makes sense or when to walk
away from the negotiation table
• Not Knowing BATNA can result in opportunity
loss- you may reject a good offer that is better
than the alternatives you have
 Improving your position in the
negotiation table
• Improve your BATNA to improve your
negotiating position
• Identify the other side’s BATNA
• Weaken the other party’s BATNA
 BATNA - Example
A consultant is negotiating with a potential client
about a month –long assignment . It’s not clear
what fee arrangement she’ll be able to
negotiate , or even if she’ll reach an agreement,
So before she meets with this potential client ,
she considers her best alternative to an
acceptable agreement . In this case , the best
alternative to a negotiated agreement - the
consultant’s BATNA – is spending that month
developing marketing studies for other clients –
work that she calculates can be billed out at
$15,000.
 A King who knew his BATNA
Long before the acronym BATNA was invented , savvy operators kept their best
alternatives in mind as they dealt with opponents . Consider France’s Louis XI ,one of
the most crafty monarchs in fifteenth century Europe . When England’s Edward IV
brought his army across the Channel to grab territory from his weaker rival , the
French King decided to negotiate . Knowing that his BATNA was to fight a long and
costly war , Louis calculated that it is was safer and cheaper to strike a deal with
Edward . So he signed a peace treaty with the English in 1475,paying 50,000 crowns
upfront and an annuity of 50,000 crowns for the rest of Edward’s life (which proved
to be short).To seal the deal , Louis treated his royal counterpart and the English
army to forty-eight hours of eating , drinking , and merry making .As an added
token , he signed the Cardinal of Bourbon to be Edward’s “jolly companion” and to
forgive his sins as he committed them.
As Edward and his army staggered back to their boats ending the Hundred Years
War , Louis remarked:”I have chased the English out of France more easily than my
father ever did ; he drove them out by force of arms while I have driven them out by
force of meat pies and good wine.”Such is the power of negotiating when you know
your BATNA.
 Reservation Prices
• Also Known as the “walk away price”
• Reservation price should be derived from your
BATNA
• Don’t enter a negotiation without a clear
reservation price
 Reservation Price - Example
You are currently paying $20 per square foot for the
suburban office space . The location is satisfactory and you
believe that the price is fair , but you wouldn’t mind paying
more to be closer to your downtown customers . While
preparing to negotiate with a commercial landlord for an
office lease in a downtown highrise , you decided that you
would not pay more than $30 per square foot . That’s your
reservation price . If the landlord insists on more ,you can
stay where you are at $20 per square foot(your BATNA).
At the end of a lengthy negotiation session , the landlord
declares that he will not accept less than $35 per square
foot – and he won’t budge . You graciously terminate the
negotiation and walk away from the deal.
 Zone of Possible Agreement
(ZOPA)
• ZOPA is the area or range in which a deal that
satisfies both parties can take place
• It is the set of agreement that potentially
satisfy both parties
• Each Party’s reservation price determines one
end of the ZOPA.
 ZOPA - Example
A buyer has set a reservation price of $2,75,000 for the purchase of
a commercial warehouse . “That’s as high as I’m willing to go,” she
tells herself . Naturally , she would prefer paying less . Unknown to
her , the seller has set a reservation price of $2,50,000.That is the
least he’ll take for the property . The ZOPA, therefore , is the range
between $2,50,000 and $2,75,000.The two parties might haggle a
bit in reaching agreement , but an agreement in this range would
satisfy each.
Buyer : What would you say to an offer of $2,55,000?I could agree
to that.
Seller : Thanks , but I believe that the building is worth more and I
can get more if I wait for a month.
Buyer : You may or you may not .I would be willing to pay $2,60,000
Seller : Pay $2,65,000 and it is yours
Buyer : I agree to pay $2,65,000
 Value Creation Through Trades
• The negotiating parties can improve their
position by trading the values at their disposal
– Getting what one wants in return for
something it values much less
• Both parties often emerge as winners
Value Creation Through Trades- Examples

• For a supplier , an extended delivery period

can be useful whilst the customer may need
the delivery in a phased manner
• Warranty for the customer is valued very high
whilst the supplier can it for a small
incremental cost
• Work from home office two days each week
can mean a lot to a working mother whilst it
comes at no cost to the employer
 Summing up Key Concepts
• BATNA is the best alternative to a negotiated agreement . It is one’s
preferred option in the absence of a deal . Knowing your BATNA means
knowing what to do if you fail to reach an agreement . Don’t enter a
negotiation without knowing your BATNA.
• If your BATNA is weak , do what you can to improve it . A strong BATNA
improves your negotiating position.
• Identify the other side’s BATNA . If it is strong , think of what you can do to
weaken it.
• Reservation price is the price at which the rational negotiator will walk away
. Don’t enter a negotiation without a clear reservation price.
• ZOPA is the zone of possible agreement . It is the area in which a deal will
satisfy all parties . This area exists when the parties have different
reservation prices . Home buyer willing to pay $2,75,000 and the seller is
willing to part with the home at a minimum price of $2,50,000.
• Value Creation through trades is possible when a party has something he or
she values less than does the other party and vice versa. By trading these
values , the parties lose little but gain greatly.
 Preparation for Negotiation
• Every important endeavor benefits from
Preparation.
• People who know
- what they want
- what they are willing to settle for
- what the other side is all about
stand a better chance of negotiating a better
deal for themselves.
Negotiation(Harvard Business Essentials)
 Preparation for Negotiation
• What does preparation mean for the negotiator ?
- Understanding one’s own position and interests
and also of the other party
- The issues at stake and alternative solutions
- Learning as much as possible about the concepts
such as BATNA , Reservation Price , ZOPA and
Value creation through Trade
- Above all understanding the people with whom
you will be dealing.
 Preparation - Example
• Laura , one of Phil’s best employees , requested a meeting to talk about
taking a six month leave of absence . She had expressed her interest in an
extended leave several times in the past . Now she has made a formal
request for a meeting . Phil agrees and they meet.
With all the things going on in the dept., Phil didn’t want to think about how
his unit would get its work done without Laura . Hence , he didn’t think
about her request .”May be she will change her mind or just forget about
it” he thought . But she didn’t.
When they finally met Laura was completely prepared .She had considered
the staffing issues and anticipated all the questions/concerns (including her
substitute during team meetings)her boss would raise during the meeting
and had her answers ready so that the work will not get affected during
her absence.
Phil on the other hand was not prepared at all . He wanted to suggest an
alternative but couldn’t think of one . Finally Laura got her leave
sanctioned in her terms since she was prepared and Phil was not .Had Phil
been prepared , he would have found out a common ground to manage his
unit’s goal and Laura’s leave request.
 9 Steps
To
Preparation in Negotiation
Step1:Consider What a Good Outcome
would Be for You and the other Side
Never enter into a negotiation without first asking yourself the
following:
- What would be a good outcome for me ?
- What are my needs ?
- How do I prioritize them ?
Then ask the same questions from the perspective of the other
side.
In the example shared earlier – Phil should have thought about
his priorities as well as Laura’s priorities to reach a win-win
situation.
Eg: Negotiate for a shorter leave
Schedule the leave for the slow part of the year
Ideally Phil should have put himself in Laura’s shoes(to
understand what are Laura’s needs and priorities and what
should be a good outcome for Laura)to prepare for the
negotiation
Step 2:Identify Potential value creation
opportunities
• Once you understand what a good outcome is
from your’s as well as from the otherside you can
identify the following:
- Areas of common ground,
- Compromise
- Opportunities of favorable trade-offs
Eg. Understand that Laura’s key issue as one of
balance between work and family life.
Hence reduce Laura’s working hours
Opportunity for tele-work from a home office
 Step 3:Identify your BATNA and Reservation
Price and Do the Same for the Other Side
• BATNA and Reservation Price are important elements
of preparations
Eg. What is Phil’s BATNA ? We don’t have enough details
about his BATNA . Perhaps he has not thought of his
BATNA . This could result in Phil dealing with an
unhappy employee or look for Laura’s replacement if
she resigns incase Phil declines her leave.
Similarly Laura’s BATNA is also unknown and perhaps
limited .She may do well to negotiate rather than push
for her leave and undermine her position in the
company .Her BATNA could be to look for another job
during her six months leave if she takes the leave.
 Step 4 : Shore Up your BATNA
• Any thing you do to improve your best
alternative to a negotiated agreement will put
you in a stronger position and speaks of being
well prepared.
Eg. Phil could have improved his BATNA in the
preparation stage if he had identified another
employee to step into Laura’s shoes . Laura’s
strong point of being indispensable would lose
it’s power.
 Step 5:Anticipate the Authority Issue

• Make sure you are negotiating with the MAN ie. the decision
maker.
This will help you in the following manner:
- All your reasoning is heard directly by the decision maker.
- The benefits of good relationship built at the bargaining table
are likely to be reflected in the deal and its implementation
- The chances of disputes/misunderstanding/
misrepresentation is minimized
So , do whatever you can, to identify the real decision maker and
ensure that he is there during the negotiation.
It is also important to know if the decision making is to be done
by an individual , a team or a committee .
Understand the decision making process.
 Step 5:Anticipate the Authority Issue (cont’d)

• What if you are not negotiating with the decision maker?

- The discussions may lead to exchange of
information/interests that can help explore creative
options.
- Take care to confirm the ground rule that we are not
getting into any commitment.
- When negotiating prices keep some margin to reduce while
discussing with the authority.
- However , if the prices are non-negotiable then convey the
message that the prices or terms and conditions are final.
Finally it is always good to know the authority level of the
person you are negotiating and know your authority level
as well.
 Step 6:Learn All You Can About the Other side’s People and
Culture , Their Goals and How They’ve Framed the Issue

• Negotiation is an interpersonal activity.

• Seasoned negotiators understand this and try to
learn as much as possible about the people they
have to deal with.(about the people from various
sources , their experience in negotiations,
Aggressiveness , Conflict – avoiding or not,
bureaucratic or entrepreneurial , have the
authority or not and how important is this
negotiation for their business).
 Step 7:Prepare for Flexibility in the Process-
Don’t Lock Yourself into a Rigid Sequence
• Negotiations don’t always follow a predictable, the path or
sequence.
• Parties must be prepared to move forward without a clear road map.
• Parties must also exercise patience
Hence,
- Start with the assumption that the process will not unfold in a
predictable fashion
- Be prepared for changes on both sides – new people and
unanticipated developments
- Treat every change as an opportunity for learning
- Flexibility is important. However, be flexible within the context of
your larger goal . Be focused on the business that has to be acquired
and don’t let the delays and bumps in the road to make you lose
sight of your goal.
 Step 8:Gather External Standards and Criteria
Relevant to Fairness
• Both the negotiating parties would like to believe that the deal
reached is fair and reasonable.(neither party likes to believe that they
have been forced to make a bad deal).
External or “Objective” criteria can be used to establish what is fair and
reasonable.
Eg. I have spent some time researching the commission structures used
by commercial real estate agencies in the metropolitan area . As you
can see , for properties listed between $1 million and $3 million , the
commission rates range between 3 to 5 percent , with an average of
4.4%.Thus we believe that our offer to pay you 4.5% commission is fair
and reasonable.
It is important to identify the relevant criteria for fairness and
reasonableness . If the other side is convinced then they will often be
happy with the outcome of he negotiation.
Hence , it is good to be well informed about the standards in the
market place for similar situations.
Step 9:Alter the Process in Your Favour
• It is always important to track the negotiation
process from the beginning to the end so that:
You have a say in the agenda , the pre-
negotiation ground work, the sequence , the
participants, the location and even sometimes
the shape of the negotiation table.
Besides , it is important to educate others in a
negotiation where there a several participants.
Be prepared to learn as negotiation unfolds.
 Preparation – Summing up
• Know what a good outcome would be from your point of view and that of the
other side
• Look for opportunities to create value in the deal
• Know your BATNA and reservation price .Make an effort to estimate those
benchmarks for the other sides
• If your BATNA isn’t strong ,find ways to improve it
• Find out if the person or team you are dealing with has the authority to make
a deal
• Know those with whom you are dealing . Learn as much as you can about the
people and the culture on the other side and how they have framed the issue
• If a future relationship with the other side matters , gather the external
standards and criteria that will show your offer to be fair and reasonable
• Don’t expect things to follow a linear path to a conclusion . Be prepared for
bumps in the road and periodic delays
• Alter the agenda and process moves in your favour
 The Process of Negotiation
• Negotiation is a process and not an event
• It is a multi-faceted business transaction

Negotiation & Selling by Sameer A Kulkarni

 The Process of Negotiation
• The process consists of various activities
under the following five broad stages:
- Pre- negotiation Stage
- Conceptualization
- Setting the norms
- Discussion / Talks
- Agreement
 Pre-Negotiation Stage
• This stage is also called Intelligence/ Information
gathering stage.
• Planning is the main focus area at this stage . It is a
critical tool . It is expected to define the broad
framework for carrying out the negotiation.
• Planning with the end in mind will help you make a
comprehensive plan
• Most often a comprehensive plan will help you in
effective problem solving and thereby achieve the
desired objective .
• Good planning for negotiation can lead to better
confidence in the negotiation table
 Pre-Negotiation Stage
Five steps to help in planning for negotiation:
- Prioritize and rank the goals
- Look into the priorities of other party
- Find out real motivation
- Plan factual inquiries
- Quantification of the objectives
 Prioritize and rank the goals
• Decide upon the goals for the negotiation session to make it
more result oriented
• What interests are to be taken for the discussion . Eg .
Monetary , long term relationship.
• These interests need to be understood by all team members.
• Once the goals are identified , each party should priorities
them.
• Thereafter the points can be discussed in that sequence or in
order of priority . The hard areas can be discussed first
followed by the soft areas or vice - versa.
• It should be kept in mind that negotiation is a process and
each party should focus on trading the less important items
for secure the more important items.
 Look into the priorities of other party
• It is always beneficial to know the priority of
the other party.(values , needs , issues)
• Your strategy will depend on the priority of
the other party
• You strength on the negotiation table will be
enhanced
 Find out real motivation
• It is important to tactfully find out the
motivation/ position of the negotiating party
before the negotiation process starts
• Every negotiator’s way to determine this may
be different
 Plan factual inquiries
• In any negotiation it is important to get important
information at the pre-negotiation stage
• Good negotiators spend a lot of time in asking
information seeking questions , staying curious
and alert to uncover the other side’s views of the
situation , facts , interests and priorities
• The above exercise needs to be conducted
skillfully so that it does not look too obvious and
ruin your chances to get important information
 Quantification of the objectives
• All the objectives should be linked to a
monetary perspective/quantified
• Linking the objectives to a monetary aspect or
units is required to make it more
understandable and enhance the possibility of
getting good counter offers
• Quantification and principled reasoning
facilitates the cordial tone of negotiation and
helps in arriving at a fair solution
 Conceptualization stage
• After planning it is important to formulate the probable
foundation of the agreement
• Points to be considered here are – competitive analysis and
legal aspects to facilitate basic amicable principles
• Both parties broadly exchange information in a formal
manner with regard to views , aims , possible estimations ,
basic calculations . The size of the team , time,venue are
also decided at this stage
• At this stage the negotiating parties may establish some
measures of compatibility amicably
• A broad agenda is worked out at this stage Proper
conceptualization results in systematic and effective bypass
of “negotiation traps”
 Setting the Norms
• The next stage is “ setting the Norms”- stage 3
• Here both the parties should define the norms
based on monetary aspects.
• Setting the norms in itself often becomes a
point of negotiation
 Discussion/Talks
• Negotiation is a process of dialogue
• There should not be any change in the pre-decided
matters like team members , size of the team and the
broad framework.
• It is advisable to have a patient approach , recognise the
role of the other person
• The discussion should be carried out in a decent/dignified
manner.
• It should be issue based with out hurting personal
sentiments
• No personal defend / attack should be encouraged
• Clubbing of issues should be avoided
 Agreement
• This is a post negotiations step where the formal
drafting of agreed terms and conditions are done
• This should be done as agreed in the
conceptualization stage under the legal aspects
• This agreement will also include the guideline for
resolution of any disputes arising in future
• Some negotiations end with the issuance of a
purchase order . The purchase order must
include all the monetary aspect as well as the
timelines , non-per performance clause etc.
Tasks involved in the negotiation steps
• Negotiation comprises of various tasks
• Negotiation is a process of communication aimed at resolving
any sort of problem
• The success of negotiation is based on the following
outcomes:
- It should produce an agreement
- It should be efficient (ensure desired outcome)
- It should improve or at least not damage the
relationship of the parties
• It is recommended that one should enter any negotiation with
a co-operative approach rather than a competitive approach
• That there is no set standard process for being successful in
negotiations
• There are only guidelines which can be followed
 Guidelines that can be followed
• Selecting the team members
- The size of the negotiation team needs to be
kept small to ensure it is more manageable,
easy to communicate,and less costly
- The team should have a leader alongwith
experts in the relevant areas(Technical, prices
analysis).There could also be a lead negotiator
 Identify the key objectives and issues of negotiation

• An issue can be any matter with a potential to create disagreement

in the negotiation
• The disagreement may be due to different information sources used
by the parties regarding functional areas such as Audit reports ,
technical analysis , MIS reports etc.
• While preparing for the objectives , one must ensure that there
should be enough technical support in terms of facts and market
knowledge for each objective followed during negotiation
• In competitive negotiation , the evaluation of the best price must be
based upon various criteria and conditions , like level of production ,
demand expected etc.
• In non-competitive negotiation,the negotiated best value must
adhere to the set government norms in all aspects.It should be in line
with the government’s social targets ,because a negotiated deal
cannot offer or transfer any right superceding the established law.
 Identify the negotiators’ possible approach to the negotiation

• It is better to understand the rigid framework

of the constraints . This provides the broad
way for proceeding the negotiations.
 Assessment of strengths and weaknesses

• Assessment of the strength and weakness of

the other party will ultimately motivate to
arrive at win-win conclusion.
• There are some resources which are common
for all the involved parties to it , like :time
available to negotiate , importance of the
contract and risk involved in it.
 Establishing the negotiation priorities and
potential trade-offs or concessions
• Important points can be categorized into groups like,avoidable
points(issues to avoid during negotiations) bargaining points (issues
open to bargain),give points (issues open for concession)and must
points (non-negotiable issues)
• Trade-offs in both cases of negotiations are helpful in competitive
negotiation . The trade off position can be used for evaluating the
final proposal offered. In case of non-competitive negotiation,this
can be used for developing counter offers for establishing the
tolerance limit for negotiations
• A reasonable trade-off is possible by answering the following
questions:
- What is a reasonable and acceptable result on the basis of the
shared information?
- What is the reasonable and expected outcome on this issue?
- What may be the least desirable result acceptable?
Determine an overall negotiation strategy

• The tactics and its sequences should be pre-

decided.
• You may start from less important and move
towards the most important issues of the
discussion , or
• You may start from the most important and
move towards the less important issues of the
negotiation.
Following any of the above approach is called the
building blocks approach.
 Prepare a negotiation plan
• The detailed plan of negotiation should be
discussed with all the team members so that
the team is on the same wave length and they
can contribute effectively.
• The plan will bring in clarity of the role
expected out of every team member
• The team can even plan who steps in when
during the negotiation process
Brief your management about the plan
• The briefing may be formally through a
presentation or through informal discussion
and inputs taken
• The strategy must be executed with prior
approval of the management
 Prepare a negotiation agenda
• A negotiation agenda should include:
- Topics to be addressed alongwith the order
in which they will be discussed.
- A general time schedule for negotiating each
of the point.
- Locations of the negotiation schedule
- Names and titles of the team members ,with
their cell numbers and e-mail ids
Points to be considered for effective negotiation
• Assess the party with whom you are negotiating
• Evaluate the situation and assess the possibility of the parties achieving their goals
• Evaluate the relationship with the negotiating party . Look at past interactions/
negotiations
• Look at tangible and intangible takeaways out of this negotiation
• Consider what you definitely want and what you can trade off
• Assess the best you can derive out of this negotiation
• Assess what you definitely have to achieve out of this negotiation
• Be prepared as to how you will handle the issues that will come up during the
negotiation
• Prioritize issues
• Be prepared with all the data/MIS reports and other important and relevant
information before start of the negotiation
• Assess the negotiating party’s strength and weakness and approach to negotiation
• Assess your strength and weakness and what will be your approach to negotiation
• Prepare the agenda
• Based on the above what should be my strategy
• If the negotiation fails what is my alternative
 Is Negotiation Necessary ?
• The process of Negotiation can be a lengthy and cumbersome
process.
• Hence, it is always a good idea to assess if it is required.
• Assessment may help the parties save time and avoid
unnecessary compromise.
• Negotiation request by a party which has no standing in the
matter can and should be avoided.
• If no result is expected out of a negotiation , it is best avoided.
(Party having complete authority to take a decision).
• If the other party has a good case , it is better to concede
rather than push for a negotiation.
• When it is known that a negotiation will not help ,it is better to
go for third party intervention.
• Hence , do not negotiate unless you have to or unless you can
obtain some direct or indirect advantage by doing so.
Negotiation and Selling by R.K.Srivastava
 Seven Pillars of Negotiations
• Relationship
• Interests
• BATNA
• Creativity
• Fairness
• Commitment
• Communication
Negotiation and Selling by R.K.Srivastava
 Relationship
• In most negotiations relationship is an integral
part.eg.Colleagues,clients,suppliers,purchases
• Like in personal life , the same is the case in business – the wisest
approach is to treat each event as an ongoing building block of a
long-term relationship.
• Business to Business relationship – results in improved business
numbers , builds reputation of the company , increases
possibility of repeat business and better price deals and delivery
as per requirement . Leads to friendship and positive
relationship.
• Sellers and Purchase relationship – Makes business easy to do
since the seller is expected to be hard skinned and the purchaser
is expected to be hard nosed . Good relationship makes things
easy.
• Same goes for relationships with colleagues and family members.
 Interests
• Take care to look after your interests and those
of your counterpart.
• By demonstrating sensitivity to your counterpart
you may be able to influence business decisions
more easily and to your advantage.
• Your counterpart will appreciate you for being
fair and understandable.
• This also helps in building good relationship
within the organization and society.
 BATNA
• BATNA is another successful tool in handling
negotiation.
• It gives strength and options in the
negotiation process.
• It is important to keep track of the dynamics
of BATNA and continue to focus on your
objectives based on your BATNA as well as
that of your counterpart’s BATNA.
 Creativity
• A creative approach can always help both the
negotiating parties.
• Asking specific and direct questions can help you to
learn about the interests and logic behind a certain
position taken by the other party . This will help you
to devise new and more beneficial proposals.
• Some possible questions are:
- What makes you deal with our company?
- Are there things I do not know about this that I need
to know?
- What is it that you like or dislike about my proposal?
 Fairness
• Fairness is always a very effective strategy. Follow the
old saying “ Do unto others as you wish them to do to
you”(Though there is no absolute universally accepted
norm for fairness).
• What is important is that your counterpart needs to
perceive fairness on your part.
• Fairness not perceived positively can jeopardize a
negotiation and thereby the objective will not be
achieved.
• Fairness if used effectively will have a positive impact
to the party’s reputation.
 Commitment
• Commitment towards the sincerity of the process of
negotiation is very crucial.
• Staying committed to the process of negotiation is a major
confidence building measure between the negotiating parties.
• Do reality checks on the sincerity of the negotiators during
the process of negotiations.
• Keep options to take care of failures in the commitment
process as follows:
- Get prepared for the worst case scenario.
- Build in penalty clause to safeguard your interest
- Set monitoring groups with specific responsibility
- Make provisions for an arbitrator in case of any disputs
 Communication
• Communication facilitates exchange of
information.
• It also brings transparency which builds trust.
• Effective communication reduces the surprise
elements in negotiation and the agreement
prepared post negotiation.
• Clear communication also sets clear
expectations from either side.
 Negotiation Strategies
Negotiation has been a subject of study for a
decades in management studies.
While discussing Negotiation as a subject it is
important to distinguish between negotiation
protocol and negotiation strategy.

Negotiations and Selling by R.K.Srivastava

 Negotiation Protocol
• It determines the flow of messages between
the negotiating parties.
• It dictates who can say what , when and acts
as a guideline which the negotiating parties
must abide by.
• The protocol is necessarily public and open.

Negotiations and Selling by R.K.Srivastava

 Negotiation Strategy
• Negotiation Strategy on the other hand is the way the
negotiating party acts within those rules in an effort to
get the best outcome of the negotiation.
• It deals with ‘when’ and ‘what’ to concede
• When to hold firm
• The strategy of the parties is always private /
confidential
• Hence a negotiation strategy is a pre-determined
approach or plan of action to achieve a specific goal or
objective and make an agreement or contract with
another party.
Negotiations and Selling by R.K.Srivastava
 Negotiation Strategies
• Strategy articulates the negotiators overall
plan designed to achieve desired goals.
• Getting substantial gain out of the deal is a
primary goal of the negotiating parties.
• There are three negotiation strategies suited
for obtaining a beneficial position in a
negotiation.
Negotiations & Selling by Sameer A.Kulkarni
 Three Negotiation Strategies
• Soft
• Hard
• Balanced negotiations
 Soft Strategy
• This strategy is used when the relationship of the
parties is friendly
• The emotional relationship dominates over the
business relationship
• Concessions are made in this negotiation
• Often there is clear communication of all aspects
of business(total transparency)
• The focus is on arriving at an agreement
• This strategy also helps build trust on each other
 Hard Strategy
• In this strategy , negotiation is conducted entirely based on
rules
• There is no scope for emotions or relationship in the Hard
Strategy
• All facts are exchanged in a clear manner
• In this strategy the parties push for their points of view and
try to win
• Trustworthiness is not a compelling element in this practice
• Winning at any cost is the driving force in this strategy
• Can lead to distrust at times (an acceptable norm in this
strategy)
 Balanced Negotiation
• Also called collaborative negotiation
• As discussed earlier being collaborative does
not mean weak or giving in
• A collaborative approach often leads to the
best possible solution
• Collaborative approach is a long term
relationship-oriented method
• It is a balanced approach , unlike the first two
approaches(Soft and Hard)
 Balanced Negotiation
• Information and other relevant details are
shared under a situation of trust with an
objective to arrive at a solution
• A significant amount of trust and maturity is
expected to be demonstrated in this approach
 Summary of the three Negotiation Strategies
Characteristic Soft Strategy Hard Strategy Balanced Strategy

Participants Are Friends Are adversaries Are problem solvers

Goal Is agreement Is victory Is an amicable solution

Role of Concession Concessions are made Concessions are demanded Based on a problem solving
mode
Focus Is on relationship Non-emotional Soft on relationship and hard
on issues
Atmosphere Trust others Distrust others Objectivity is maintained
Flexibility Easy to change your position Disturb others position Interest is rigid , position is
flexible
Tactics Make offers Make threats to walkout Explore Interests

Target Acceptable solution is detected Solution is enforced Multiple choices are

irrespective of generated with freedom to
choose
Aim To have an agreement To find a solution Insist for an objective criteria

Result Yields pressure Applies pressure Yields on principle and not on

pressure
 Deciding a Suitable Strategy
• Deciding on a strategy for negotiation is important.
• It will guide the negotiator in developing a purposeful behavior.
• Possible factors which influence the selection of a specific strategy :

Goals-The selection will be guided mainly by the objectives or goals expected to derive a consent
upon in the negotiation process.There may be multiple goals.

Authorities -The selection of strategy largely depends on the levels of authority conferred to the
representative participating in the interaction.

Personality Profile - The context of exhibited values in the previous negotiations should be given
a prime focus for designing a suitable strategy .It is observed that most negotiators seek to
maintain a coherent personality profile all the time.

Counterparts – It is clear that a strategy appropriate for one type of counterpart may be
inappropriate for another and experience of past interactions will have a say on the strategy.

Alternatives - Knowledge of “Best Alternative to a Negotiated Agreement” or BATNA may guide

in selecting the negotiation strategy
 The Negative Tactics
Negative tactics can be divided into three
categories:
- Deception
- Coercion
- Prevention
 Deception
• Negotiators do adopt deception as a tactic
occasionally.
• This is done to deceive the other party , and
influencing their decision to favour the
deceiving party.(Make the other party believe
in something which is not right)
• Deception is seen as a business trick .
However, if the truth unfolds it may reduce
one’s say in the negotiation table.
 Coercion
• It is a method of getting people to do something
by force
• Coercion happens at all levels in the hierarchy
• Subordinates are normally subjected to this
situation
• It is often seen as direction and not compulsion
and hence subordinates are left with little choice
in the decision making/ negotiation process but
to obey the Senior Manager
 Prevention
• This is the third way a party can block the
other party in some way.
• Prevention may occur when a person acts as a
gateway to other people or information.
• This is normally done by refusing to fully and
honestly answer the questions(information
seeking questions).
 Negotiation Styles
Negotiation styles vary with difference in
social background , culture , nationality and
type of business.
There are three styles which are as follows:
- Belief Oriented
- Professional Style
- Non-Professional Style
 Belief Oriented Style
• Belief is the basic essential element of this style.
• It is strongly recommended that once the
understanding among the negotiating parties is
reached , they realize that belief is established
through a set of behavior and the resistance
between the negotiating parties is diluted /
minimized resulting in an amicable solution
• Belief can be acquired in a phased manner.
• A belief-based style is perfectly suitable and can
be executed with soft and balanced strategy.
 Professional Style
• Professional Style is followed specifically in the
international bidding negotiations.
• It covers a large span of application areas like
Mergers & Acquisition where the negotiations
are carried through a principle negotiating agent.
(not necessarily an individual , can be an
organization as well).
• This style is suitable for negotiations in the areas
of Industrial Relations , International Bidding ,
Political , Selling and Buying of firms.
 Non-Professional Style
• Negotiation can happen within non-professional
contexts.
• These negotiations are carried out in an absolutely
non-skilled level.
• These negotiations are such because they happen in an
unplanned manner where the outcome is not defined.
• This style is suitable for negotiations of the following
nature;
• Domestic : Discussions and arguments at home
• Everyday : Everybody , everyday
• Hierarchical : Parent-Child , Boss – subordinate etc.
 Spectrum of Negotiation Styles
• Consideration of Self – Own interest most important . Your victory most important
and not that of the other party.
• Consideration of Others – Your values will enforce consideration for others , which
are often based on your beliefs about people . In this style there are chances of you
over estimating the importance of others, thereby prioritizing their well over your
own.
- Excessive consideration for others leads in offering concessions where you secure
the loser’s position.
- Over doing this(giving away too much) may even result in you losing important
elements of the relationship.
- This can result in loss of respect.
- Some people like being submissive – However , that is not the way to
conduct a negotiation . Hence , stand up to your needs and be assertive .
• A Middle Way – Between concession and competition lies balance.
- A collaborative negotiation is often seen as a balance negotiation even with
competitive elements.
- Shared values are commonly used to protect the relationship and ensure fair play.
Negotiation Skills
Basic skills required for Negotiation
• Negotiation is a skill anyone can learn and practice
• The necessary skills required for successful negotiation are:
- The ability to define a range of objectives yet being flexible about
some of them
- The ability to explore the possibilities of a wide range of options
- The ability to be well prepared
- The ability to listen to and question other parties
- The ability to set priorities
All of the above will help in building the ability to influence and
persuade . This is one of the most important management skills and
is called the ability to negotiate
Negotiation and Selling by R.K.Srivastava
 What Every Negotiator Needs
• Learning with regard to negotiation extends
from the classroom to the outside world of
work place .
• One learns everywhere all the time
• One also gets better with practice of the
learning acquired
8 Points to become an Effective Negotiator
• Know what’s going on-with regard to the organization’s goals and objectives
• Prepare-Prepare-Being prepared is important. Have all the relevant information available
• Learn-Probe-Learn – Learn from your counterpart regarding their needs and see the picture
from their point of view . This helps in evaluating their business proposal and preparing your
business proposal
• See the BIG Picture - The negotiating process can be ever changing . Hence, the need to be
flexible and ready to improvise . Have the main objective of negotiation in mind.
• Thick-skinned or staying cool – Be prepared to focus on issues and the objective of the
negotiation . It is not about the parties negotiating . It is about the purpose of negotiation.
• Can break down the barriers – It is important to understand the barriers and the causes of
these barriers . This will help in getting rid of the barriers and progress in the negotiation.
• Can find allies – This is often required in multi-party negotiations . We don’t always find
ourselves operating from a position of strength . Hence , it is important to understand the
strength of numbers and gather allies to enhance strength.
• Has a trusting reputation – Everyone with whom we negotiate forms an impression of who
we are as a negotiator . It is important to have a positive image and not a negative
perception. Integrity and trustworthiness are vital to our reputation.
 Negotiation Quality
• Negotiation quality is defined as the degree of
problem solving skill that people employ in
reaching mutually satisfactory solutions.
• Negotiation quality includes the competence of
the people and the proficiency of the
communication systems individuals build for
themselves.
• High quality negotiation avoids force , respects
individuals , achieves mutually beneficial results.
• Low quality negotiation easily breaks down.
 2 Hinges of Negotiation Quality
• One hinge represents the competence of
those who actually conduct the negotiation.
• The other represents the atmosphere or style
in which the negotiators negotiate . Here the
negotiator is a product of the business system
he represents and will reflect the popular
assumptions of his compatriots.
 What Make a Good Negotiator ?
• Negotiation is one of the most difficult tasks a
person faces.
• It requires a number of qualities.
• Negotiation requires good business judgment
and an understanding of human nature.
 Qualities of a good negotiator
• Stable person . One who does not have a need to be liked can be a
good negotiator.
• Willingness to plan , know the product , the rules , the alternatives
and the ability to probe and gather information.
• Good business judgment.
• Be able to tolerate conflict and ambiguity.
• Commit to high goals and take risks to achieve these goals.
• Have patience.
• Get involved on a personal and business level.
• Have integrity.
• Be willing to listen with an open mind.
• Be able to see the hidden personal issues.
• Be a good communicator
 Qualities of a good negotiator
• Good negotiators are realistic.
• Understand and recognize that their
counterpart’s as well as their own evaluations
may change during the negotiation.
• Good negotiators are flexible.
• Must have willingness to win
• Good negotiators do not make promises that
they cannot keep or negotiate in bad faith.
• Good negotiators learn and understand their
counterparts’ values , motives , and objectives.
 Negotiation Skills
• As you get involved in value-added projects you
will need to sharpen your negotiation skills.
• The contracts and agreements you make for your
organization will require serious negotiation.
• The stakes are high since the results will affect
the viability of your business.
Let’s now look at some skill sets required for
effective negotiations
 Skills sets required for effective negotiations

• Communication Skills
- One of the most important skills that is
required for being successful professionally.
- Poor communication skills are often
identified as one of the causes for breakdown
in the business development process.
 Skills sets required for effective negotiations

• Conflict Management Skills

- Conflict in business diverts attention away
from important business issues.
- It also affects critical decisions relating to the
viability of the business.
- Ability to understand conflict and manage
them skillfully is important for the success of
not only negotiations but also for business at
large.
 Skills sets required for effective negotiations

• Creativity
- We live in a world of change.
- Creative solutions always help in negotiations
- It also gives an edge to the negotiating parties
 Skills sets required for effective negotiations

• Decision Making Skills

- For being successful in negotiations , decision
making skills is an important requirement.
- The outcome of any negotiation is highly
dependant on the decision making skills of the
parties during negotiations.
 Skills sets required for effective negotiations

• Entrepreneurship
- Entrepreneurship is a skill that is at the heart
of successful business development.
- It unleashes creativity and innovation in doing
business.
- Entrepreneurship always addresses profitable
business outcomes.
 Skills sets required for effective negotiations

• Ethics
- Ethics is a major driving force in any
negotiation activity.
- It reflects the value system of the
organization the parties represent.
 Skills sets required for effective negotiations

• Interpersonal Skills
- The negotiating parties are expected to have
very good interpersonal skills.
- In today’s business scenario the person’s
emotional IQ – the ability to relate to people
is as important as a person’s intelligence IQ
- This skill helps build relationship during
business negotiations.
 Skills sets required for effective negotiations

• Leadership Skills
- Leadership skills is required to successfully
lead a team in negotiations.
- This also helps in setting directions during
negotiations
- The opposite party might dominate the
proceedings in case there is lack of leadership
skills in one of the parties.
 Skills sets required for effective negotiations

• Management Skills
- Negotiations or any other business activity is
all about managing your resources and getting
the best out of the available resources.
- Good Management skills will stand you in
good stead to achieve the best in any
negotiation table.
 Skills sets required for effective negotiations

• Networking Skills
- This is a very critical skill required not only in
negotiations but in business at large.
- It is much more than a stack of business cards
- It involves building contacts and relationships
and draw benefits from such contacts during
negotiations and can extend beyond
negotiations.
 Skills sets required for effective negotiations

• Personnel Management Skills

- This skill is required to get the best out of
negotiations from the employees.
- If managed effectively it can address
productivity issues and at the same time
increase the satisfaction levels of employees.
 Skills sets required for effective negotiations

• Planning Skills
- Very important skill which helps in focusing
your efforts on the activities required to
accomplish the tasks that you have set out for
during negotiations.
- This skill is the first step which sets the
direction for negotiations or any other
business activity.
 Skills sets required for effective negotiations

• Presentation Skills
- How people perceive you depends on how
you present your self.
- Skills of presenting yourself , your ideas and
your business can be the key differentiators
during negotiations.
 Skills sets required for effective negotiations

• Selling Skills
- Negotiations is all about selling your point of
view . Selling Skills is important to help people
make a buying decision(eg. Products,ideas
etc)
- A good sales person is often seen as a good
negotiator.
 Skills sets required for effective negotiations

• Stress Management Skills

- Business and negotiations come with their
share of stress . The parties are expected to
learn the art of stress management.
- It is seen that the people who mange well
under stressful situations are often winners . It
is no different in negotiation or business
situations.
 Skills sets required for effective negotiations

• Teamwork Skills
- It is a skill that is defines success in business as
well as negotiations.
- The relationship amongst team members and the
desire to focus on accomplishing their goals is the
differentiator between a good team and a not so
good team .
- A good team is often seen to have members with
different skills sets complementing each other.
 Skills sets required for effective negotiations

• Time Management Skills

- In order to be successful in negotiations , it is
important to have time management skills .
You desired out come must be achieved on
time.
- Outcomes achieved after the timelines are
sometimes of no use and hence a waste of
time and resources.
 Skills sets required for effective negotiations

• Writing Skills
- Like communication skills writing skills is very
important.
- Be it proposal , agreement or business plan –
they need to be written well . The out come of
negotiations is highly dependant on the
writing skills.
 Negotiation Skills - Tips
• Be willing to negotiate in the first place
- Do not feel shy or hesitant to negotiate
- In business you only get when you ask or
negotiate
• Don’t get Emotionally involved
- Don’t get emotionally attached to winning. Focus
on the issue
- Keep calm , patient and be friendly
- Leave behind your ego and pride before entering
the negotiations
 Negotiation Skills - Tips
• Don’t get suckered by the ‘Rules’ Trick
- Sign the contract only if all the terms and
conditions are acceptable to you
- Make changes in the contract if you strongly
feel to do so after informing your counterpart
- If the counter part insists that you sign the
contract as it is , seek to understand that as per
rule you cannot change the contract.
- All contracts need to be mutually agreed upon
 Negotiation skills - Tips
• Never be the First Person to Name a Figure
- Always get your counterpart to say a number
to which you can respond.
- Being the first person to name a figure , you
may under quote or grossly over quote . Both
situations are not right . However , quoting
reasonably higher than what you expect and
keeping a margin for negotiation is a good
idea.
 Negotiation Skills - Tips
• Let them Believe the Final Decision does not
Rest with You
- Negotiate in a manner that gives your counter
part that there is another level of authority for
the final decision
- Try to get the best offer which you will carry for
the authority to approve . Thereby you get time
to evaluate and agree or negotiate further
- Always be the reluctant buyer or seller
 Negotiation Skills - Tips
• Don’t Leave the Other Person Feeling as If
they have been Cheated
- Many people try to get every thing out of the
negotiation at all costs.
- This sometimes leaves the other party feeling
cheated and discourages future transactions.
- Most negotiations should leave both parties
feeling that they have won.
 Negotiation Skills - Tips
• Solicit Other’s Perspective
In a negotiating situation , use questions to find out what the other person’s concern’s and needs might be.
1. Don’t Argue – Negotiating is about finding solutions . Arguing is about trying to prove that the other person
is wrong . Argument leads to no progress . Difference of opinion can be communicated in a decent manner.
2. Consider Timing – There are good times to negotiate and bad time . Bad times include those situations
where there is:
- A high degree of anger on either side
- Pre-occupation with something else
- A high level of stress
- Tiredness on one side or the other
If they arise during negotiations a time out/rest period is in order or perhaps rescheduling to a better time.
3. Listen before you speak – This is a very important skill in negotiation . You can communicate well if you have
listened well. Test understand after you have listened and then put forth your point . This makes it more
effective in negotiations.
4. Smile when you say it – Smile , Courtesy , patience , empathy , and humor will serve to advance your ability
to get the other side to co-operate and thereby the negotiation leads to the desired result.
5. Separate the person from the problem – Be easy on the other person but hard on the issue.Be firm in
challenging the other side’s position but be cordial to the other party.
 Negotiation Skills - Tips
• Remember your BATNA
Your Best Alternative to a Negotiated
Agreement is your legitimate walk away point
in a negotiation . The deal has to be superior
to your BATNA or it should be refused.
 Negotiation Skills - Tips
• How to get ‘Yes’ in Negotiation
- Avoid Conflict
- Be a good Listener
- Learn to talk and understand the customer’s
language
- Develop Empathy
- Understand your limitation
- Keep margin of safety
- Know your customer