Definition: The act of discussing an issue between two or more parties with competing interests with an aim of coming to an agreement .
How you negotiate when it comes to landing a sale reflects your respect for the customer and how deeply you care about the life of that relationship. Too often salespeople and entrepreneurs listen to bad advice about hard-core negotiating tactics. In reality, those who are peak performers at negotiating show a lot of style and grace under pressure--something their co-negotiators remember and appreciate.
Here are some negotiating tips to keep in mind when it comes to the art of the deal:
1. Be prepared. Always go into a negotiation well rested. Long, drawn-out meetings--or, worse, negotiating over the long haul for several months--are exhausting. Make it a rule not to get exhausted. If you do start to feel worn out, take a powder for a while.
The person with energy has the will to continue. Do everything in your power not to weaken your position by losing energy. Notre Dame football coach Lou Holtz puts it brilliantly: "Nobody quits unless they think they are not going to be successful. When someone is running in a marathon, as long as he thinks he is going to finish, he will continue. It is only when he starts thinking he is not going to make it that he will quit before he completely exhausts himself."
You're at your weakest when you're tired. Fatigue stops the positive thoughts necessary for good negotiations. That's why, the day before every negotiation, you need to make sure to eat well, watch your alcohol intake and get at least eight hours' sleep. This ensures you'll be in top mental and physical condition and that your head is clear to negotiate successfully. Things will better if you walk into the deal just plain feeling good.
2. Remember, it's only a game. Herb Cohen, America's great negotiator and author of You Can Negotiate Anything, says, "Negotiation is just a game. You care about the outcome, but not that much." That's one reason it's often hard for entrepreneurs to remain neutral when they negotiate--they're too emotionally attached and sensitive when it comes to representing themselves and their company. It's much easier to take an unbiased position when representing somebody else's money, time, family, product, service or even career, but when it hits close to home, it is no longer a game.
The more emotionally attached we become to an outcome, the harder we try to get our way. Pretty soon we begin to lose our perspective. It's important to stay neutral.
3. Don't take a hard-and-fast position. When you start negotiating, remind yourself that you want this agreement to work satisfactorily for everyone involved. If you take a position that says, "Either this goes my way or it's not going," you could end up very sorry. How do you deal with people who try to force you to take a position? Refuse to negotiate with them. Remain calm and mature no matter how they try to beat you down. If your prospects throws out an ultimatum, such as "Either you throw in 10 sets of widgets for free with this order or I won't do business with you," it's time to stop the game. Say something like, "I would love to work with you, but it doesn't sound like it could work right now." Because this type of individual may be looking for trouble, you must weigh your words carefully and get them out of your way fast.
4. Be prepared to walk away. Remember, negotiating is a game, and if you don't care about the outcome that much, you can detach yourself from the situation and walk away. The purest negotiations occur when you have plenty of other prospects in the pipeline and plenty of money in the bank.
If an inflexible customer is the only customer you have going for you, it can be difficult to negotiate objectively. "Control of the negotiation lies with the party who is perceived to need the deal the least," says expert negotiator and sales consultant Barry Elms. When you care the least at the negotiating table, you have the most strength.
Most people feel they've either failed or walked away from an opportunity when they turn something down, says Joanna Tamer, president of Los Angeles-based S.O.S. Inc., a consulting firm for new media developers, publishers, distributors and retailers. But in reality, says Tamer, "there is no shortage of opportunity. If you say yes to something, whether it turns out to be good or bad, you still have to say no to the next thing that comes along because you have already filled that space."
Tamer's detachment in the face of negotiation is the key to her success with clients, which include big names like Blockbuster, Harper-Collins and Time-Life Inc. "When I negotiate for myself or my clients," says Tamer, "I tell them and myself: `Remember, there's no shortage of business out there. If this deal doesn't fly, it isn't going to end my career or kill your future business.' "
Keeping this positive attitude is important. And when you say no, Tamer advises, be alert because something will show up soon to fill the place of the deal that didn't work out. "You may feel awful when something doesn't work out--but later, you'll be amazed how happy you are that it didn't," she promises. "If it had worked out, the new opportunity that is in front of you now never would have presented itself."
5. Practice compassion, and negotiate in good faith. Show compassion by listening for the real reason behind your customer's objection or hesitation. Let customers air their feelings, make comments, present objections and feel comfortable telling you whatever is on their minds. Then and only then will all parties come to the negotiating table in good faith.