If you are in business, then you will be a participant to many negotiations in your business career. For example, real estate professionals are integrally involved in the process of sales contract negotiations. Even though an agent may “represent” the seller or buyer, their negotiation skills will be paramount to closing the deal as details such as the occupancy date get hammered out. Negotiations are not reserved for contracts or transactions. We may be involved in negotiations as we set our prices, service levels and even consider requests for refunds. Approaching the process in the right way is absolutely essential.
Forget the word “winner.” Yes, we used the word “winner” in the title of this article. However, you certainly can’t approach any negotiation with a “win or lose” mindset. As a matter of fact, the best results happen from a mindset that looks to provide two winners as a result of negotiations. You have heard the term “win-win.” Now it is time to put meaning behind this cliché .
Here is an example from the world of real estate. Perhaps the buyer is looking for a quick closing date because of tax issues. Yet the seller is not willing to budge because they will wind up with no place to live in the interim. Perhaps the home they are buying will not become available for two or three months. In this case, one might offer a “rent-back” for a certain period of time. The buyer gets their closing date, and the seller gets extra time to move. Of course, this works only if the buyer does not need to move in quickly. In the case of purchasing an investment property, it actually can give the buyer more time to find a long-term renter.
Listen and Understand. In order to find common ground so that both can leave the table as winners, you must lead the negotiations by listening and understanding the position of the other participant(s). Yes, we meant to use the word “lead.” The one leading the negotiation is not talking but listening, especially at the beginning. The more you listen the more you will learn, especially about the goals of others. It is from this knowledge base that you will be able to find solutions that will fit everyone concerned.
In order to get them to talk, you must ask questions. Questioning skills are very important and must be learned as they do not come natural to many. Open-ended queries become very valuable in this regard as the goal is to obtain as much information as possible. The more information you have, the better the pieces of the “puzzle” will come together.
Make the others comfortable. Your goal of getting others to talk will accomplish another objective. It will make the others comfortable with you. The fact that you are striving to listen and understand will make them feel more at ease and this will set the stage to get more accomplished.
Forget the confrontation. Yes, negotiations can be confrontational. Yet, they don’t have to be this way. A true leader remains calm and is not argumentative. If there are more than two parties and two points of view, make sure everyone is heard and repeat their statements so you can confirm you heard them correctly and understand and empathize with their position.
Let others advance their positions first. A basic rule of negotiations is to let others make the first offer. This plays right into the hand of these who are poised to listen. In a really tight negotiation, having the advantage of knowledge is imperative. There is no knowledge which is more important than knowing exactly what the other party is trying to achieve. Believe it or not, many times the first offer may be closer than you envision as to what you or the other parties are likely to accept. If you advance your position too early, this may embolden the other participant to ask for something they were not planning on achieving.
Do not think that this strategy represents “withholding” information or is underhanded in any way. Again, you are being empathetic and polite by letting others speak first and understanding their positions before you advance yours. As a matter of fact, this is likely to be considered courteous which is the atmosphere we are attempting to create.
Put the agreement in writing quickly. When an agreement is reached, restate the terms clearly so everyone acknowledges the results. Write it down and make copies for everyone. You would be surprised at how many times people either change their mind and/or “conveniently” remember another result. A piece of paper, even if not signed, can avoid tough follow-up situations and another round of negotiations.
Whether you are mediating a negotiation, negotiating with vendors, or ironing out the terms of your service, successful business personnel would be wise to develop great negotiation skills.
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