Tips on Negotiation

Know what your goal is.

It shocks me how much I find myself negotiating with somebody who doesn’t even have a clear idea of what exactly they want. I’ll ask something like, “Well…what about, dollar amount $X? Would that work?” And the person will hem and haw forever because they really don’t even have an idea of what they are seeking, or what would be an acceptable conclusion. When you don’t have a goal, you don’t know how far from it you are when you are negotiating. So always have a goal in mind, and the very minimum that you’d take before walking away.

Be fair, it’s a relationship.

I’ll be the first to admit that there’s a certain satisfaction in wringing out every last bit from the other party – it’s like getting a great pair of shoes for 90% off retail. But that’s not how you should approach a negotiation with another real life party. There are very few negotiations that are strict one off occurences – 99% of the time, there’s a relationship based aspect to it, whether it be you interacting with that party directly again, or them having an impact on your  greater reputation. The world can be way smaller than you think, and unhappy people who’ve gotten a raw tend to pass along their negative experiences to anyone and everyone.

via Dilbert

Find other terms and levers.

Usually negotiations involve money – but they are can also be about other things, like time or participation levels and other extras. For example – sometimes when we travel I try and negotiate with hotels on the price, especially if we’re staying a long time. I’ve been able to get the price lowered occasionally, but at times when the hotel was sticking on price, they’d often throw in extras like massages, etc.

Make the first suggestion.

This rule applies 95% of the time, and I think is one of the most important ones. I always try to make the first suggestion, in order to “anchor” the negotiation around a certain number. Let’s say I want a handbag (yes all of my business analogies are like Cher Horiwitz’s). If I come out with suggesting $500, the other party will likely use that as a base and then maybe try to get $550 or $600 (10-20% higher). But if the other party suggests first asks for $1000 for the bag, then it becomes more unreasonable for me to come out and suggest $500, which is half off. The entire negotiation becomes anchored around $1000, vs. $500.

via Dilbert

And finally…as I was talking to a friend last night and mentioned negotiations to him – he threw his philosophy out which I’ll leave you all with:

“Tell them what you want. You’ll never get what you don’t ask for.” 

What are some of your do’s and don’ts for negotiations? Do you struggle like me or are you a negotiations ninja?