Five Basic Principles for Better Negotiation Skills
“In business as in life, you don’t get what you deserve, you get what you negotiate” Chester L. Karrass.
The art of negotiating is needed in the everyday life. However, mastering this art in the business world is critical to be successful in our careers, because poor negotiations can negatively affect our company’s future or cause us to lose important customers. Even when most negotiating strategies may seem natural, it’s not uncommon for people to make mistakes. Luck and charm are not the causes of successful negotiations. Discipline and perseverance in the other hand, could unlock our ability to get the best deal possible under any circumstances. In the end, practice and preparation is what makes a good negotiator.In my opinion, the five basic principles for better negotiation skills are:
1. Gather your information. Information is the foundation of effective value creation. Without knowing who our counterpart is, it is almost impossible to establish any good negotiation points. We must learn who and how that person/company we are negotiating with is. What his/her background is and if possible, learn even about his/her hobbies and life interests. By knowing that, it will be easier to generate rapport with them. It is also important to identify the parties’ goals and issues. We must be aware of what issues are important for us and what issues are important for them. Also, we must identify what are our and their positions, interests and priorities in the negotiation.
According to author Chester Karrass, a good strategy for gathering information would be to answer the following questions:
- What kind of information do we want to know?
- Where can we get this information?
- Can we learn anything from past negotiations with this party?
- How much business are we doing with this party?
- How well is this company doing?
- What don’t you want the other company to know about you?
Finally, in order to learn more about our counterpart, we could also use different social media channels, like Facebook, Twitter and LinkedIn.
2. Build relationships. Trust is essential for any conflict handling as well as in the value creation of negotiations. However, trust doesn’t magically appear or has to do with chemical compatibility. It must be built through relationships and even friendship. Like any project that is worth the effort, building relationships takes time and dedication. But how can we do it? We can start by discovering common backgrounds and interests. For this matter, we can also include in the negotiation approach team members that have shared interests with our counterpart. We shouldn’t forget that first impressions are very important; therefore it is essential to be aware of our body language, dress code and initial statements. We should also be careful with keeping our promises and being reliable. Finally, emotional intelligence comes to the table when is time to close the deal. We must use it to avoid looking too aggressive or arrogant when explaining our points of view. We should also use it to manage the other party’s emotions through flattery, humor and other methods to break any possible tension.
3. Know your BATNA and your opponents’ BATNA. To explain what BATNA is, we could say that it is what we are going to do if we cannot reach agreement and how good that option will be for us. We must also know our counterpart’s BATNA. By knowing that, we could have a better understanding of what the ZOPA of this negotiation will be (Zone Of Possible Agreement). By knowing our BATNA we could also define our “botton line” or limit. In other words, the most that we are willing to give or the least we are willing to take to reach a negotiated agreement.
4. Listen. When preparing for a negotiation, most of us will be focused on what we will say. However, training ourselves to be good listeners is also a great strategy. Like Stephen Covey once said: “Seek first to understand, then to be understood”, we must pay attention to the verbal and no verbal communication happening before, during and after the negotiation. This skill can always reveal better solutions for both parties.
5. Take care of your target. Target is what you think is reasonably possible to get out of a negotiation. However, the rule is: never reveal your target at the beginning of any negotiation, because your counterpart will hardly agree with your first propose. For that reason, we should manage our first offers and concessions carefully. We must remember that after the first offer, negotiators need to make concessions because they enable the parties to move toward the zone of potential agreement (ZOPA), they also symbolize each party’s motivation to bargain in good faith and finally, they tell the other party of the relative importance of the negotiating items. However, for concessions to work properly, they need to be clearly labeled and also should be accompanied by an expectation that the other party will reciprocate with the willingness of meeting in the middle.