Top Ten Tips on...

Negotiation Skills

haggling is not negotiating. Haggling takes place around a single variable, usually price; both parties move towards the middle ground - there is no cross trading...

negotiation is about trading variables, based on 'if...then...' conversations. "If I look after the transport costs, can you then reduce the price?"....

good negotiators find as many variables as they can, to trade. For example, here are 10 of the most common:

price

deadline

discount

payment terms

insurance

legality

reputation

scope

reliability

outcomes

the best negotiation occurs when both parties have different priorities. Each can work to protect their own priorities by trading into the other party's priorities. So if Party A's priority is as low a price as possible, and Party B wants to deliver volume, the B can offer a discount to A if A takes more of B's product....

it may well be that some element of the deal is non-negotiable (though good negotiators hate that to be the case). If that's the case, make that clear from the outset. Effectively that factor or variable is then taken off the negotiation table...

essentially there are two options. Keep everything on the table all the time, or deal with each variable in turn (usually called salami negotiation - slice by slice). A genuine and good negotiation will choose the former, because it increases their flexibility to cross-trade.

in the negotiation matrix, you would mentally move from ideal, to fall back, to bottom line positions, cross trading as you go. Sometimes you will hit your bottom line - a position on that particular variable that you won't go below. Some people think that only achieving your bottom line is some kind of failure. It is not. Your bottom line is the minimum acceptable on each variable - but it is acceptable. Otherwise you should not have set it. So an outcome that only delivered your bottom line is still a win - it's a position you set that would be a satisfactory outcome. And of course that means that anything higher than a bottom line is a bonus...

a good negotiator will keep looking for variables to throw into the mix, to increase their trading options. The fewer the variable, the fewer the trading options. Take, for example, price. That may seem a single variable: how much it costs. But there might be any of these (or other) variables within price:

method of payment

deadline for payment

instalments

discounts for....

payment in kind rather than cash

choice of currency

inclusive of....

it isn't always clear that both parties are in a negotiation...so check. By asking, and judging the reaction, you will know whether the other party assumes it is a negotiation or not, and how comfortable they are with a negotiation. And of course, if it is not a negotiation, essentially you are dealing with an ultimatum - there's the offer: take it or leave it.

many negotiators will have learned particular tactics to help them close the deal. Often these are manipulative, and need to be identified and countered. That's the topic of another podcast in this series...