Most people are not great negotiators — and end up losing against people who not only are good negotiators, but have the home court advantage. Learning to level the playing field in business negotiations means preparation, developing options, and putting the discussion on more equitable footing. Winning at business negotiations means patience, and removing emotion from the equation.
Recognizing that you are an emotional being, and that emotion can be a handicap in negotiations, will go a long way to helping you develop a map to guide you through the emotional moments.
Some people walk into negotiations with three or four talking points, and a half-developed value proposition. These people are actually ahead of the game; the majority come cold with only a vague idea of what they want, expecting the other side to be able to read their minds.
Knowledge gives you the power to be assertive, while still respecting the interests of others. Being assertive without proper preparation is nothing but aggression in a different wrapper. Aggressive people represent their own interests with a complete lack of regard for anyone else. Understand both sides of the negotiation — and be assertive without being aggressive.
Be Willing To Walk Away
Let’s take a simple example. You are applying for a mortgage, have an outstanding credit rating, and a large down payment. You would like to self-pay your insurance and property taxes, instead of working through some horrid mortgage servicer. Your mortgage broker is going to spin like a quantum particle trying to tell you that’s a bad idea, and it just doesn’t happen anymore. That’s because your mortgage broker is trying to make his or her own job easier.
Housing deals are emotional for most people. They want that house, and once the deal starts rolling downhill there’s a lot of pressure to stay on track. Emotion kicks in, and most people end up swallowing what they want. Yet, if you’re clear about what you want — and are willing to walk away from the deal —you may find that what was not possible yesterday has a path to success today.
Develop Real Options
I was working a contract job a few years ago, and the contract was lost to another company. To this day I remember the announcement meeting, looking around at the faces of my coworkers and seeing sheer terror. It was obvious they were completely unprepared for that moment. There were two people who did not look afraid — I was one, and my retired Marine buddy Paul was the other. We weren’t afraid, because we were on the customer’s critical personnel list, and we both had options to work on other contracts. Unlike the majority of our coworkers, we had real options. So when the new contracting company asked for resumes and salary requirements, our coworkers sprang into compliance; Paul and I sent them nothing.
I continued to ignore their requests for information, and the clock ticked down to three days before the expiration of the old contract. I had my office packed up into nice, neat boxes. I wasn’t bluffing, and word got around. The owner of the new company personally flew up to meet with me, and we negotiated a new employment contract — a deal no one else got, and a salary that took my breath away. My immediate supervisor tried to object, and the management chain above him smacked him down. I was untouchable — and for the next three years I had my own personal version of the movie Office Space [NSFW language].
That negotiation succeeded because I had worked hard to develop options. They were not fake options, they were real and tangible. To really negotiate from a position of strength, you have to be willing to walk out the door. That’s a lot easier and more believable if you have somewhere to go.
Part of being a good negotiator is being a good listener. Understanding what issues are important to the other side, and being able to articulate their position well enough to mirror it back to them, is a powerful negotiating tool. That understanding allows you to be assertive about what you want without trodding on what’s important to others.
Take the Home Court Advantage
Ever wonder why car dealers let you sit in the salesman’s office so long? It’s their court, their ball, their game — and most people don’t know how to play. The usual tactic is to focus on monthly payments, instead of the cost of the vehicle. If you don’t like the monthly payment, your salesperson will run off to a meeting with a mysterious sales manager, who you never actually meet, and suddenly you’re negotiating with the gorilla in the closet instead of the salesman in front of you. I’d like to help you, but my boss said no. And they let emotion bubble like a pot of stew.
You’re never going to win a negotiation with a car dealer sitting in the dealership. Find a way to move the negotiations to neutral ground. Move to the coffee shop down the street, or have the salesman bring the paperwork to your office. Now the shadowy sales manager is farther away, and your salesperson has to get on the phone or in the car and drive back and forth. You have changed the game, and added time that works to your advantage. You can read over the paperwork in familiar surroundings, and you’ll be able to do better research and ask better questions.
Keep these tips in mind to be successful at negotiations. Don’t walk in cold; listen; develop real options; and be willing to walk away if negotiations aren’t working.