Imagine a child compelling her mother for a cup of ice cream. Is the child negotiating or bargaining? Perhaps we use the term negotiation and bargaining interchangeably. You may find these techniques that are on display in everyday life at flea markets, roadside vendors, and even in high end market stores. You feel the asking price is a bit too high and haggle to get the price lowered.
People confuse between bargaining, influencing, persuading and negotiation because of their similarities. Negotiation is a dialogue between two or more people to reach an understanding, or in business sense, to gain advantage in outcome of dialogue to produce an agreement upon course of action. Persuading involves, being able to convince other to take appropriate action whereas influencing encompasses both of these.
You fail numerous times and get annoyed. For me, Negotiation is an art since it involves expression or application of human creative skills as well as science because of the behavior of the physical and natural world through observation and experiment. I quote from the book I love to read about the 3 common errors which people do and you should refrain while negotiating.
1. Separate the people from the problem.
Fact of the matter is that a Negotiator is also human. Be smart to separate the substance and deal directly with the problem. Put yourself in their shoes; don’t blame them for your problem. Attempt to discuss each other perceptions and look for opportunities. Listen actively and acknowledge what is being said.
2. Don’t bargain over position.
Always remember arguing over a position produces unwise agreements and is inefficient. It endangers the ongoing relationship and you tend to lock themselves into these positions. The more you clarify your position, the more difficult it becomes to do so. Your ego is identified with your position.
3. Focus on interest, not positions.
For a wise solution, reconcile interests not positions. Interest define the problem, behind opposed positions lie shared and compatible interest as well as conflicting ones. But how do you identify interest- Ask why? Realize that each side has multiple interests and the most powerful interest is basic human needs.
You can sneak google and will find a lot of different negotiation techniques, but I’ve observed and would suggest my preferred 5 strategies for buyer and 10 powerful negotiation tactics which you may use at advantage in your daily and business life. You may use these strategies and techniques as a combination to gain success.
Five Strategies for Buyer
1. Remember you are in a powerful position and you should preserve and enhance it throughout the buying process.
2. Whether or not you are looking at competitive options, the seller thinks you are.
3. Understand the requirement and know as much as you can about what you are buying.
4. Learn all you can about the seller-his/her goals, values, organizations etc.
5. Identify and assess any risks involved with the product or service.
Ten negotiation tactics
1. Never say Yes to their first offer
Yes is the oldest word in the dictionary but saying yes to the first offer you chose not to see what may come next. Always wait to see the other side of the coin and you never know you may flinch a great deal.
2. Ask for more than you expect to get
This is funny and my personal favorites i.e. fire someone with expectations. I usually ask for more than what I need and finally settle on what I really need. Don’t be shy in asking more than your appetite.
3. Bracket your objective
Aim higher in case you fall short is a good saying. If your objective is clear before entering the negotiation call, half the battle is indeed won, ensure your objective has a set bracket; you can’t be a lost child in a mall.
4. Options give your power
Folks to choose between the devil and blue sea may not what you want. The chances of your failure increases in case you are fixed on one option, cherry pick your options; and if you don’t have, generate one.
5. Flinch at the other side’s proposal
I’ve seen many times people see what the other side want them to see. Play hardball; evaluate the other side of the proposal. It gives a threat to the seller that the customer isn’t interested, and the flip side is, you get to know what’s supplementary.
6. Play reluctant buyer
Imagine a stranger walk up to you at a bar saying, “I’m the best thing that ever happened to you. “Marry me.” You will be reluctant likewise never show your interest at first go, always try to gauge the seller by being a reluctant buyer and strike the iron when it’s hot.
7. Use the silent technique
Silence is golden, I was listening to a presentation from a major fortune company and during their sales pitch; I stayed quiet for some time, sensing something is wrong the account manager started to push harder, and at the end they gave us what we required.
8. Tap down the size of the discount
Try to gauge the accuracy of the discount. You should mind and analyze; IS it not a case of seller cutting you down on the quality of product or service. It’s imperative you minimize the profit but don’t kill the seller’s dream to make a penny on the deal.
9. Patience is a virtue to a negotiator
It’s a good saying have patience, all things are difficult before they become easy. It’s important you maintain you’re cool during the deal, as by getting worked up you may endanger the good work done till now.
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10. Only a Mediator or Arbitrator can resolve the deadlock
Don’t scramble in a deadlock, let someone else take the lead; may be by trying harder you can endanger the relationship; it’s advisable to get it resolve through a mediator.
Negotiating is an important aspect in our day to day life. Negotiation involves being able to discuss and reach a mutual satisfactory agreement. Picture an employee asking for a raise from their employer, two organizations negotiating on intellectual property rights, lawyers bending on an out of court settlement, bureaucrats administering the tendering process. They all have one thing in common; all of them are negotiating for the finest result.
Contributed by Vaibhav Chandra ( Class of 2007-09, IBS HYDERABAD )