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Get a higher return of your time

Negotiation

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The basic

The process of seeking an agreement where termsacceptable to all parties are elusive (fixed) at least

not immediately obvious (expanding benefits)

Getting what you want from other people

(Balance, integrity, patience)

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Stages in negotiations

Before

During

After

Planning

Follow up / Follow through

Opening

Set thetone

CounterOpening

Discovery

Keyskills

DevisingSolutions

Creativecollabora

tion

Reachingan

agreement

Play thegame

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Two common phrase

Would you take $x rather I would give you$x

If that the best you could do

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Get out of situation

Thats interesting

Tell me more

Why would you say that

Why would you do that

Why would you ask that

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Think critical

Key questions

We cant afford that?

Hide the excitement!

Is that your best price?

Dont make the first offer !

Power of the middle point !

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Rules

If you follow certain rules / principles you willrarely feel the pain the losers feel !

Regret, something often experienced by non-

professional negotiators who fail to recognizethat there are rules to follow when resolvingconflict.

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The Resolution of Conflict byMutual Compromise

In today's competitive business environment, an absence ofnegotiation - or negotiation skills - is perhaps the singlelargest contributor to the lack of success.

The changing nature of the buyer/supplier relationship in this

increasingly challenging marketplace means all businesspeople need to be ultra sophisticated negotiators.

Of course good negotiation isn't about you Winning andsomeone else Losing.

A satisfactory outcome leaves both sides feeling that theyhaven't compromised too much, felt threatened orunnecessarily pressurised, or made sacrifices that they didn'twant to.

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The Resolution of Conflict byMutual Compromise

It is about reaching a Win-Win resolution. People now expectto negotiate and see the process as a positive relationshipbuilder, rather than a potential threat.

Principled negotiation can achieve a solution that is

acceptable to all parties involved, which of course,encourages repeat business.

Good negotiation skills are not just an asset in the traditionalsales person / customer situation. In all areas of life, withcolleagues, employers, even your own family, being able tonegotiate well will allow you to get what you want withoutdamaging your relationships.

A lack of ability in this area can be the single largestcontributor to preventing people and businesses getting what

they want (and need).

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Rules for successful negotiation

The rules are intended to identify the techniquesavailable to control and influence events to theindividual's own advantage.

They also provide a good defense against aggressivenegotiators, thereby producing better agreements withfewer expensive concessions.

Everyone feels that they know how to negotiate, just aseveryone knows how to kick a football. But try explaining

the off-side rule to a beginner and compare that withunderstanding the subtleties of defensive negotiation, itis then that the need for clear rules becomes moreimportant.

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# 1 - Dont negotiation

Don't. (Negotiate) unless you need to. Always evaluate your needs honestly and buy / sell hard

Never, if at all possible negotiate, as it always requirescompromise, which costs

Some people are tempted to negotiate too soon, just becausethe other party says this is the negotiationphase - doesn'tmake it so.

Work out your ideal

position and don't be

afraid to state it

straight away.

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# 2 Never negotiate with yourself

People regularly try to second guess the other party and indoing so minimize their own expectations i.e. Ideally I want tobe paid Rs10k for this, but maybe they don't have that much.

If I ask for Rs10k or nearest offer, it might sound less

aggressive - this is the start of negotiating with yourself. If you start reducing your expectations from your ideal before

you even see the whites of theireyes, you will always endup with a lesser, over-compromised deal.

Start out with your ideal and wait forthe other party to ask for

a lower figure.

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# 3 Never accept the first offer.

There is almost always a different (better) offer behind it.Don't forget they will be instinctively (or professionally)trying not to break rule 2 - so their opening stance willobviously be leaning towards their ideal (perfect) position

- with probable room for maneuver. Also, be aware, that you can sometimes annoy the other

party by accepting their first offer; if you accept tooquickly they will think they should have asked for more,

resulting in their perception of a lose / win conclusion(they lost, you won).

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# 4 Never make the first offer

Let the other make the first offer

(If you can help it!) It leaks your bottom line straightaway. Always ask the other party What is your ideal (ortarget) price? If you are backed into a corner - or a I

asked you first situation occurs, make the offerunder protest and don't break rule 2.

State your ideal position i.e. your list price if you'reselling or your lowest target price if you're buying.

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# 5 Listen more & talk less

Good negotiators lead by listening, not talking.

Let the other person ramble on even if it sounds likerubbish, you must bide your time and bite your tongue.

Continued silence will provide you with the opportunity topick off their position by their leaked messages ofmovement.

Don't forget, whilst you are

listening you can't leak yourown position and give them the

advantage!

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# 6 No free gift

Always ask for something in return. No one values a freegift for long (it immediately decreases in value once ithas been offered), and a free gift today becomestomorrows starting point.

Don't forget free gifts are not always money, but can bethe disclosure of useful information or even giving upyour time too easily.

If someone want some thing from you they should work

for it. They give you something in return - Discount,information, cooperationi. Todays free gift is the starting point for someone else

ii. Its an additional extra sometime next time

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# 7 Salami effect

(i.e. itemising every element of the deal and pricing it). Startwith a complete value-orientated price e.g. materials, labour,clean-up and a 5-year guarantee Rs 10,000. Not Rs 3,000materials, Rs 5,000 labour, Rs 1,000 cleanup etc

The other party will always know where to buy cheaper

materials, then query your labour rates, say they'll do theclean-up themselves and forego the guarantee - thank youvery much!

So a Rs 1,0000 deal easily becomes Rs 2,000-materials, Rs4,000-labour etc. That's the Salami effect!

Only salami when, and as far as you are requested to. Never'band your expectations - it leaks your bottom line i.e. I amlooking for a 10-15% discount. Which one do you think youare more likely to get? Yep, it's going to be closer to 10% than

15%!

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# 8 Avoid the rookie regret

Don't forget the 3 differences. Cost is how much the concessionscost you, price is how much you want to charge for it and value iswhat its worth to the other party

i.e. The cost of this tap washer is Rs 2, the price to fit it is 10minutes of my time, which is Rs 10, the value to the other party isthat it doesn't ruin their bathroom carpet and destroy the living roomceiling plaster at Rs 500 replacement.

Aim for the super win-win where both parties get high valueconcessions at low cost i.e. We will finish the job early if you pay100% up-front in cash.

Everyone walk away with the deal saying could I have done itbetter

1. If I am giving a consesion to a person what will I get

2. What is it worth to the other person

3. If I know what is cost me and worth to the other person what do I

want in return: of equal cost to me and equal value to the other

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# 9 Never make a quick deal

Say 'maybe', a quick deal usually ends up in regret.

Check your understanding of their offer, by repeating itback to them.

It may be that the other party think that they have seenan advantage for them (or mistake by you) you havemissed, so give yourself time to check the proposedagreement thoroughly.

Never be afraid to take a short break and review yourposition before concluding proceedings.

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# 10 Dont disclose the bottom line Never disclose what was your limit Before, during or after the

meeting. Not before you start, not during the discussions andnever (ever) after a successful win-win conclusion.

By doing this you will always be giving the other party anundue advantage over you.

People learn their negotiation skills from their interaction withyou.

They also learn your limitations and abilities in postnegotiation analysis. So don't let them know how you workunder any circumstances - keep them guessing about yourno-deal positions and they will have to move more towardsyou than you will towards them.

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How To Negotiating Like anExpert

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How To Negotiating Like an Expert

What makes a successful negotiator? What do they do differently from the rest of us -

to get the price they want, while still leaving theircustomers feeling that they're getting a good

deal? Simple five-step process can help maximize

your results each time you negotiate

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Step 1: Get into the right frame of mind Be in the right frame of mind.

Believe that your products or services are worth the priceyou're charging? If no, then you won't be able tonegotiate successfully.

If you believe that your products are worth the price theycharge will walk away with more deals at full price.Those of you who think your products are too expensive,on the other hand, will continue to sell at a discount.

If you who are willing to put in the effort, it will help make

negotiation easier, and more natural.

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Step 2: Hold firm Top 20% of sales people - never cave in on the first

round. So don't give in to what your prospect is askingfor right away.

Negotiation is a game. It's the "art of the deal." And tomake those people happy, you must be willing to play.

Nothing frustrates negotiators more than a sales personwho caves in and drops their price on the first round. If aclient asks for a 20% discount and you immediately sayyes, they walk away feeling two things:

1. The price must have been inflated to start with; and2. I should have asked for bigger discount. Next time, I

will!

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Step 2: Hold firm Neither of these outcomes is good for you. So the next

time your prospect asks for a reduction in price, insteadof just giving in, try responding with one of the followinginstead: I can appreciate you're looking for the best deal, but I can tell

you that we've already given you our best price. You're smart to be looking for the best deal, but our pricing is

always competitive, and I just can't go any lower.

A discount? (in a surprised tone)

Learn how to hold firm, and practice your responses inadvance.

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Step 3: Repeat Some clients will press ahead with their request for a discount

even after you've given them one !

The vast majority of them, however, are just looking forassurance that you really are giving them the best possibleprice, and there is no room to move. In other words, they want

to make it a little uncomfortable for you. Hold firm. Work to reassure your customer that they're getting

the best price, and remind them of all the hard work you'veboth put into the deal. Try something like:

We've been 6 months putting this project together, I wouldhate to see it not go ahead because we can't settle onprice; or

I knew you'd be tough, so we provided aggressive pricingup front. I would hate to see this not go ahead because we

haven't been able to meet your budget.

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Step 4: Take their mind off the bottom line If after all this your prospect is still pushing for a discount

(and 40% of them will be), then find something else togive them that doesn't reduce your price. Free shipping.

Extra manuals or training.

A client profile on your Web site.

What you choose will be specific to your business, yourmarkets and your client base. The key is to have the listof things you're willing to offer prepared in advance, so

you can draw on it during the negotiation. It's hard to think creatively in the heat of a negotiation, so

planning ahead could give you a ready-made solutionthat leaves both you and the client feeling satisfied with

the transaction.

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Step 5: The last line of defense Finally, if your client is still asking for a discount, you

may have to give it to them in order to close the sale. Butbefore you do, always ask them one of the two followingquestions: "What is important to you about an x% discount?

"Why is an x% discount important to you?"

These questions will flush out any last details that couldhelp you find a different way to structure the terms andpricing, which will allow you to keep your price while

letting the customer walk away with their needs met aswell.

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Step 5: The last line of defense Never reduce your price without getting something in return.

Getting something in exchange for a pricing concession is key tomanaging customer expectations that future discounts will be easilydished out.

As with the "no money" concessions above, what you get in return

for a price reduction will be unique to your business and markets, butcould include references or case studies, a bigger order,introductions to senior level executives or cash up front.

Again, whatever you ask for, prepare the list in advance so you canrespond quickly and smoothly.

Get a firm verbal agreement from the customer that thisdiscount is all they will need to get the deal done. Try askingthem something like "I'm not sure if I can get you this price,but if I can, is it fair to say that we can go ahead?"OR "I'mnot sure I can get this discount for you. If I can, though, are

you willing to sign the agreement this week?"

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5 Things You Should Never

Say While Negotiating

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Where do you loose

Speak Softly: Whenever you negotiate, remember that itpays to stay calm.

Every entrepreneur spends

Some time haggling, whether it is with customers,

suppliers, investors, or would-be employees. Most business owners are street smart, and seem to

naturally perform well in negotiations. You probably havea trick or twosome magic phrases to say, perhaps

that can help you gain the upperhand. Often, the moment you get into trouble in a negotiation is

when something careless just slips out. If you are new tonegotiation, or feel it is an area where you can improve,check out these tips on precisely what notto say.

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1. The word "between."

It often feels reasonableand therefore like progressto throw out a range.

With a customer, that may mean saying "I can do this forbetween $10,000 and $15,000." With a potential hire,

you could be tempted to say, "You can start betweenApril 1 and April 15." But that word between tends to betantamount to a concession, and any shrewd negotiatorwith whom you deal will swiftly zero-in on the cheaperprice or the later deadline.

In other words, you will find that by saying the wordbetween you will automatically have conceded groundwithout extracting anything in return.

Dig Deeper: The Art of Effective Negotiation

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2. "I think we're close." We've all experienced deal fatigue

When you signal the other side that you are ready to settle onthe details and move forward. The problem with arriving atthis crossroads, and announcing you're there, is that you havejust indicated that you value simply reaching an agreement

over getting what you actually want. A skilled negotiator on the other side may well use this

moment as an opportunity to stall, and thus to negotiatefurther concessions

Unless you actually face extreme time pressure, you shouldn'tbe the party to point out that the clock is loudly ticking in thebackground.

Create a situation in which your counterpart is as eager tofinalize the negotiation than you are.

Dig Deeper: Creating Win / Win Negotiations

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3. "Why don't you throw out anumber?"

Never be the first person in a negotiation to quote a price.

Let the other side start the bidding, which will provide you with anadvantage.

A negotiation is often closer to what the first mover proposed than to

the number the other party had in mind; the first number uttered in anegotiation has the effect of "anchoring the conversation." And one'srole in the negotiation can matter, too.

(In the book Negotiation, Adam D. Galinsky of Northwestern'sKellogg School of Management and Roderick I. Swaab of INSEADin France write) "In our studies, we found that the final outcome of anegotiation is affected by whether the buyer or the seller makes thefirst offer. Specifically, when a seller makes the first offer, the finalsettlement price tends to be higher than when the buyer makes thefirst offer."

Dig Deeper: Bargaining for Advantage

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4. "I'm the final decision maker." At the beginning of many negotiations, someone will typically

ask, "Who are the key stakeholders on your side, and iseveryone needed to make the decision in the room?"

For most entrepreneurs, they have the joys to call the shots?Yet in negotiations, particularly with larger organizations, this

can be a trap. You almost always want to establish at thebeginning of a negotiation that there is some higher authoritywith whom you must speak prior to saying yes.

In a business owner's case, that mysterious overlord could bea key investor, a partner, or the members of your advisory

board. For once, pretend like you aren't the person who makes all of

the decisions.

Dig Deeper: 7 Tips for Masterful Negotiating

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5. Abusive language."

The savviest negotiators take nothing personally; they areimpervious to criticism and impossible to fluster.

Entrepreneurs often style themselves as frank, no-nonsenseindividuals, and they can at times have thin skin. But

whenever you negotiate, remember that it pays to stay calm,to never show that an absurdly low counter-offer or anannoying stalling tactic has upset you.

Use your equanimity to unnerve the person who is negotiatingwith you and if (s)he becomes angry or peeved, don't take the

bait to strike back. Just take heart: You've grabbed theemotional advantage in the situation. Now go close that deal.

Dig Deeper: The Ultimate Guide to Negotiating

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Negotiators try to get the best deal

from other

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Rolling concession

Description

Other party attempts to get just one more things

But one more item keep on coming in

Counter tactics

Get all issues before agreeing

Dont concede Trade

Withdraw all previous concessions and go back to thedrawing board

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Hot and Cold (low reactor)

Description

Low use of support and disagree behaviors

Common in procurement

Unskilled give in and talk to much

Counter tactics

Be aware of it

Stay calm Use Seeking information (questions)

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The offer you must refuse

Description

Acceptable offer on a critical issue

Intended to make you accept the next point out of guilt

Counter tactics

Power is in the head (guild / pressure)

Negotiate each issue in isolation (w/o emotion)

Use feeling commentary to express openly

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End