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Business News of Monday, 20 May 2013

Source: B&FT

FEATURE: Master your negotiation skills

Most salespeople and business owners day-in, day-out come face-to-face with negotiation and frustration from lacking adequate skills to gain the upper-hand at the end of each round. That means it is important to learn how to negotiate more effectively.

How to Negotiate

The negotiation itself is a careful exploration of your position and the other person’s position, with the goal of finding a mutually acceptable compromise that gives you both as much of what you want as possible.

People’s positions are rarely as fundamentally opposed as they may initially appear - the other person may have very different goals from the ones you expect. To become a negotiation pro, here are some best negotiation skills every corporate executive, entrepreneur and individuals must know and have!!!

Decide on your break-even point (the lowest amount or cheapest price you will accept in the deal, the "worst-case scenario"). If you are representing someone else in a negotiation, get your client's agreement in writing to a target deal before hand. Otherwise, when you get them a great deal, they may decide they don't like it after all. Your credibility is the one that takes the hit.

Know what you're worth

The knowledge of you having the upper hand in a negotiation business is a good point to set off in confidence especially if you happen to be the most needed. To ascertain that you need to answer these questions: How much does the other party need you? Is what you're offering hard to come by, or a dime a dozen? How desperate are they? Who needs who more? And if you need them more than they need you, how can you give yourself an edge?

Plan how you will move in your proposals

Your moves should be in ever-decreasing steps, which will give the impression that you are being "bled" and there is increasingly less bargaining range to be had.

Open your extreme

Decide on your maximum sustainable position (the most you can logically argue for). Ask for what you want. When starting off a negotiation, don't be scared to make an outrageous request. You never know you might get it! And what's the worst that could happen?

They might think you're vain, or delusional; but they'll also know you have guts, and you value yourself, your time, and your money. And if making a low offer to buy something can get you worried and insolent; remember that this is business, and if they don't like your offer, they can always counter-offer. If your opening offer is too close to your breakpoint, then you will not have enough bargaining range to concede to the other party as a way of giving satisfaction.

Offer or Request Extras

What else can they give you that is of low value to them, and high value to you? Or what can you offer that is of low value to you, and high value to them? This is why retail stores offer employee discounts. Think along the lines of bartering, and be creative. What do you have a lot of, or what can you offer with ease, that they would find valuable? Make a list of your skills and your stuff. Calculate how much they cost you, and then find out how much they sell for. For example, if you have a lot of spare time, then time-consuming services in-house consultations will "cost" you very little, but could be quite valuable to someone else.

Research their costs (retail versus wholesale)

Let's say you're doing business with a winery, for instance, and they want to pay you GH¢100 to perform there. You want GH¢150. Why not suggest that they pay you GH¢100 and give you a GH¢75 bottle of wine? It's worth GH¢75 to you because that's how much you'd have to pay to buy it, but it costs them much less to produce that bottle. (This is, of course, assuming you like their wine!) Or, you can ask them for a 5% or 10% discount on all their wine. Presuming you buy wine regularly anyway, you'll save money, and they'll still make money from your purchases (just not as much).

Offer to pay up front

An up front payment is always desirable to a seller, especially in situations where most people do not pay up front (such as air time). As the buyer, you can also offer to buy in bulk, paying in advance for a certain number of products or services, in exchange for a discount. One tactic is to come into the negotiation with a pre-written cheque; ask to buy the product or service for that amount, and tell them that's your final offer. They may accept it, since the lure of an immediate payment is hard to resist. Finally, paying in cash rather than with a cheque or credit card can be a useful negotiation tool because it reduces risk to the seller (e.g. cheque bouncing, credit card declined).

Shop around, and bring proof

If you are buying airtime and you know the other dealer will sell you the same air time for GH¢200 less, tell them so. Tell them the name of the dealer and salesman. If you're negotiating a salary and you've researched how much people in equivalent positions get paid in your area, print out those statistics and have them handy.

Always hold back a closer or two

One or two facts or arguments you can use when you sense the other side is close to a deal but needs that final push. It would be for your good not to release all facts or proofs; just to help yourself out when closed on the unfavorable side of the coin.

Be ready to walk away

You know what your break-even point is, and you know if that's not what you're getting. Be willing to walk out the door in the event of that. You might find that the other party will call you back, but you should feel happy with your efforts if they don't.

Recognize that people often ask for more than they expect to get

This means you need to resist the temptation to automatically reduce your price or offer a discount. I once asked for a hefty discount on a pair of shoes hoping to get half of what I asked for. I was pleasantly surprised when the shop owner agreed to my request. It means that mostly those who flinches first, wins. Remember to flinch in reaction to a negotiable term proposed by the other person. The other person might not be expecting to get what he asks for, but if you don’t show a negative reaction, you’re communicating that the term could be a possibility.

• Use a flinch to gain a concession. A well-timed flinch might make the other person immediately retract or adjust one of his proposed terms in your favour.

• Don’t underestimate the power of a telephone flinch. Even when you’re not face to face, gasping in surprise during the conversation can work just as well.

So while deadpan poker faces work for some negotiators, don’t be afraid to display your emotions once in a while. You never know what you might get out of the deal. A well-timed flinch can bring dramatic results.

Learn to flinch

The flinch is one of the oldest negotiation tactics but one of the least used. A flinch is a visible reaction to an offer or price. The objective of this negotiation tactic is to make the other people feel uncomfortable about the offer they presented. Here is an example of how it works.

A supplier quotes a price for a specific service. Flinching means you respond by exclaiming, "You want how much?!?!" You must appear shocked and surprised that they could be bold enough to request that figure. Unless the other person is a well seasoned negotiator, they will respond in one of two ways; a) they will become very uncomfortable and begin to try to rationalize their price, b) they will offer an immediate concession.

The person with the most information usually does better

You need to learn as much about the other person's situation. This is a particularly important negotiation tactic for sales people. Ask your prospect more questions about their purchase. Learn what is important to them as well as their needs and wants. Develop the habit of asking questions such as;

"What prompted you to consider a purchase of this nature?" "Who else have you been speaking to?" "What was your experience with…?" "What time frames are you working with?" "What is most important to you about this?"

It is also important to learn as much about your competitors as possible. This will help you defeat possible price objections and prevent someone from using your competitor as leverage.

Try to achieve a ‘win-win’

For a negotiation to be 'win-win', both parties should feel positive about the negotiation once it's over. This helps people keep good working relationships afterwards. In an ideal situation, you will find that the other person wants what you are prepared to trade, and that you are prepared to give what the other person wants.

If this is not the case and one person must give way, then it is fair for this person to try to negotiate some form of compensation for doing so – the scale of this compensation will often depend on the many of the factors we discussed above. Ultimately, both sides should feel comfortable with the final solution if the agreement is to be considered win-win.

Only consider win-lose negotiation if you don't need to have an ongoing relationship with the other party as, having lost, they are unlikely to want to work with you again. Equally, you should expect that if they need to fulfill some part of a deal in which you have "won," they may be uncooperative and legalistic about the way they do this.

Practice at every opportunity

Most people hesitate to negotiate because they lack the confidence. Develop this confidence by negotiating more frequently. Ask for discounts from your suppliers. As a consumer, develop the habit of asking for a price break when you buy from a retail store. To practice your negotiation skills you must always keep flowing out some questions or statements like these:

"You'll have to do better than that." "What kind of discount are you offering today?" "That's too expensive."

Wait for their response afterwards. Be pleasant and persistent but not demanding. Conditioning yourself to negotiate at every opportunity will help you become more comfortable, confident and successful.

Thank you and expect more of our weekly business solutions. NewMax is always ready to attend to your business advisory needs and training in this regard. Until then keep reading BF&T.

By Prince Etornam William Attipoe

PR & Customer Service Consultant

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