EFFECTIVE NEGOTIATION

 Introduction
 What is Negotiation ?
 Why Negotiate ?
 The Approaches to Negotiation
 The Stages of Negotiation
 The Sources of Power
 Transactional Analysis
 Resolving Conflict
 Tips for Negotiation
 INTRODUCTION
– Ground Rules -

 Mobiles Off/Silent Mode

 If important call, please move out of room
 No smoking, tea/coffee in room
 Questions anytime
 Avoid side conversations
 Share experiences
 Question & Challenge
 WHAT IS NEGOTIATION
 A process through which
 parties move from initially divergent positions
 to a point where agreement may be reached
 A technique that enables us to :
 Persuade & convince others
 To accept our way of thinking/doing
 Without their feeling shortchanged
 WHY NEGOTIATE ?
 The reason you negotiate is to produce
something better than the results you can
obtain without negotiating…

 B A T N A – Best Alternative To a Negotiated

Agreement

 W A T N A – Worst Alternative To a
Negotiated Agreement
The Five Key Approaches
 NEGOTIATION

Compromise Coercion

Logical
Emotion
Reasoning

Bargaining
Five Key Approaches - Compromise
 Ready to give up something that is dear

 Feel as if lost something

 Use as last resort

 Generally perceived as sub-optimal

Five Key Approaches - Logical
 Strong role of Facts/Data – don’t
nitpick

 Analytical – flow important

 Source Credibility/Impeccability

 Generally emotions take back seat

Five Key Approaches - Bargaining
 1st & Last levels known

 Start higher than expected. Get a

return for every concession you make

 Do not indicate you will move quickly

from your position

 Generally played like a game

Five Key Approaches - Emotion
 Strong understanding of respective
emotional clues – control your emotions
– don’t let them control you

 Facts/data take back seat/selectively

used

 Variable tonality of discussion

 Generally involves play acting

Five Key Approaches - Coercion
 Strong understanding of respective
pulse points – think before you
threaten

 Use mirrored or emotional threats

rather than real ones

 Making offers that cannot be refused

 Generally happens when there is some

inequality in dependence
The Seven Phases
 The Seven Phases of Negotiation
PLANNING & OPENINGS TESTING
PREPARATION

•Setting Targets •Be Polite •Understand their

weaknesses

•Cost on concessions •Outline your position

•Probe facts and
inconsistencies
•S.W.O.T.- both sides •Never accept their
first offer •Get them on the back
• Avoid markers foot
•Variables/Outcomes

•Silence – get them

•Market Intelligence talking

•Team clear •Challenge them

 The Seven Phases of Negotiation
MOVING YOUR MAKING CONCESSIONS AGREEMENT
POSITIONS

•Positive Summary •When to do it ? •Make final offer with

TOTAL conviction

•Put on Pressure •How much to give ?

•Watch for closing
signals BEFORE you
move
•Emphasise that you •What do I get in
have moved return
•Only break deadlog if
to your advantage

•Use Closing
Techniques

•Make sure everybody

The Seven Phases of Negotiation

• Last Phase is of Review

• What went right ?
• What went wrong ?
• What could be done differently/better ?
• What could have been avoided ?
• This becomes input into the Planning &
Preparation phase of next Negotiation
NEGOTIATION STYLES
TRADITIONAL NEGOTIATION APPROACH
VERSUS
CONTEMPORARY APPROACH

THE
TRADITIONAL
APPROACH

THE
CONTEMPORARY
APPROACH

FIXED PIE

EXPANDING THE PIE

The Sources of Power
 The Sources of Power
 8 Sources of Power “NO TRICKS”
N Need
O Options

T Time
R Relationship
I Investment
C Credibility
K Knowledge
S Skill
 N: Need
 Definition
 Who needs this solution more, you or your
client?
 Ask what they need; State what you need
 Use active listening to confirm understanding
 Remember, focus on interests, not positions

 Application
 ROI can give you need power
 O: Options
 Definition
 What are the options for each party if an
agreement is not reached?
 Consider your BATNA

 Application
 Sketch multiple solutions. Pictures can drive
a point home
 Brainstorming session with key stakeholders
 T: Time
Definition
 What is your client’s deadline?
Tight deadlines can strengthen or weaken
your time power
Application
 We lose time power because testing is done
too late in the process.
 Present short and long term solutions to give
you time power
 R: Relationship
Definition
� How strong is your relationship with your prospect?
� Do you have a high quantity of high quality
relationships with your customer ?
� Focus on the future rather than the past
Application
� In-house staff can have more relationship power than
hired consultants
� Appreciate positive findings
� Encashing past favours ?
 I : Investment
Definition

� The more effort someone invests, the more committed

he or she will be to reaching an agreement
Application

� Increase investment power by asking clients to

participate in planning, testing, and solutions
� Use stakeholder design strategy meetings
� Build trust within group
� Get on track; stay on track.
� Increase your understanding of their needs.
C: Credibility
Definition
� Deals with your brand and relationships
Application
� Showcase projects
� Statistics can play a role in credibility.
� Focus on the obvious trends that you see without
statistics
� Testimonials from Industry or similar.
� Prioritize findings based on ROI
K: Knowledge
Definition
� “Knowledge in itself is not powerful; it is the
application of knowledge that confers power.”

Application
� Have answers to all their questions
� Ask questions early about time, budget and
resource/technology constraints when creating
recommendations to enhance your knowledge power
S: Skill

Definition
� Who is the most skillful negotiator?
Application
� Take classes
� Read books
� Practice, Practice, Practice
Power: Rules of Power
Rule 1: Seldom does one side have all the
power.
Rule 2: Power may be real or apparent.
Rule 3: Power exists only to the point at which it
is accepted.
Rule 4: Power relationships can change over
time.
Rule 5: In relationships, commitment determines
1. Equal-sized concessions
2. Making the final concession a big one
3. Never give it all away up front
4. Giving a small concession to test the
waters
Key points to remember:

1. The way that you make concessions can create a

pattern of expectations in the other person's mind.

2. Don't make equal size concessions because the other

side will keep on pushing.

3. Don't make your last concession a big one because it

creates hostility.

4. Never concede your entire negotiating range just

because the other person calls for your "last and final"
proposal or claims that he or she "doesn't like to
negotiate."

5. Taper the concessions to communicate that the other