Are you a better negotiator than other entrepreneurs or business owners? Almost all of you probably think so. Half of you are wrong. The business world is not Garrison Keillor’s Lake Wobegon (where “all of the children are above average”).
Regardless of your skill level, you can improve.
The big challenge, though, is how to negotiate. And how to negotiate better. Research over the past 25 years sheds lights on what works in negotiating, and leveraging such research, here are some of the most important tips to becoming a better negotiator:
1. Be Prepared
If the three rules of real estate are “location, location, location,” the three rules of negotiation are “preparation, preparation, preparation.” Before starting a negotiation, you need to know what you want out of the deal and your bottom line. You also need to try to figure out the other side’s bottom line and objectives. As you prepare, you should write it all down. Negotiators who start with written goals do better.
2. Set the Table and Start with Appetizers
A successful deal may depend on having the right setting, the right people at the table, and the right order of items on the menu. In most cases, it is better to start with easy issues, because you want to get the other side comfortable saying yes.
3. Leave Room
The worst feeling in the world is to have your first proposal accepted (and you won’t be doing the other side a favor accepting his or her first proposal either).
4. Be Generous (with free stuff)
We are all hard-wired to reciprocate. The fastest way to get concessions is to give them. Look for things of value to the other side that don’t cost you much, if anything. The instinct to reciprocate should not be underestimated. Besides, people are more likely to be persuaded by someone they like, than someone they don’t.
5. Be Creative
Effective negotiation is not only about getting the biggest piece of the pie, it is also about looking for ways to make the pie bigger for both sides.
6. Be a Good Listener
Ask questions, and spend more time listening than talking. You might find that stuff you want is not important to the other side and vice versa.
7. Make it Easy for Your Opponent
No one likes to lose. Making your opponent feel bad or look bad is unlikely to win you much, but may poison your business relationship or even kill a good deal.
8. Be Sincere
Nothing will work if you don’t mean it. In addition to being unethical, if you start to lie, you will need additional lies to cover the first one and so on. Eventually, your brain will overload and turn you in. (Brain imaging studies show that your brain needs to work much harder to lie and than to tell the truth).
9. Be Patient
Effective negotiations take time. If you try to short-cut the process, you are likely only to give up more (or get less) than you would with some patience.
10. Don’t Be Afraid to Ask for Help
Our emotions often blind us to facts and reasonable options. It always helps to have a sounding board. Negotiation can be stressful, but they don’t need to be. Many attorneys and experienced negotiators (myself included) will gladly take the time to talk with you about a negotiation that may be important to your business simply to build good will. Sometimes it just takes a quick phone call to talk about strategy or get a reality check.