Negotiating is a very old practice, and truly a form of art. It takes skill and a great deal of practice to be considered an expert negotiator. Neither of which I possess. I do know some things about negotiating though. Some I have observed , others I have discovered by talking to people who have done many negotiations and of course, I have read expert-written literature. There is one thing that is the absolute most important thing to remember before even considering entering into any type of negotiations. That one key component which is irrefutably more important than any other is that both parties must walk away from the negotiations feeling as though they have won. This I cannot possibly stress enough. If one side (yours or theirs) feels as though they have been swindled in the negotiations process, well, it is all downhill from there. Say just for one moment that in negotiations I really beat up the other party and get a great deal. Lets say I use a genius negotiator who is armed to the teeth with information and has an arsenal of proprietary intelligence to use in the negotiating process. Lets then hypothetically say that this “professional” performs phenomenal knock-your-socks-off negotiating and slams a fantastic deal that most people wouldn’t even believe if I were to write it here. The result: one party gets e a stupendous deal, and the other would feel like they just lost the world series. There are consequences to this outcome, even though you believe you “won.”
We will look at the consequences of over negotiating in a moment but for now let us consider one of the other most important things to consider in any negotiation. The numbers! Know your numbers! In fact you should know them inside and outside, upside and downside. You should live and breath in the numbers. Because, my dear friend, if you don’t know the numbers whoever you are negotiating against will, that I guarantee. It is much like my finance professor always said before he started each his lectures each day, “If you don’t care about your money, somebody else will”. This was a promise he made everyday, and somehow I knew he was right. It is the same in the world of negotiations. If you don’t know the numbers your team better know them and you had better be really sick the day of negotiations. Plus, if you don’t actually know the numbers how can you possibly expect to negotiate a good deal? So, best advice and it is free this time, know the numbers, or it will just be sad, and you will deserve exactly what you get; nothing.
Ok, now that you know your numbers you should be ready to sit down at the table, or on the phone in many cases and begin negotiations. I mentioned earlier that you don’t want to negotiate to the death. And that if you do there will be serious consequences. Here is the thing. you don’t get something for nothing, and every treasure has traps. The traps of bad negotiations are severe. Say as I suggested in the situation above you have walked away with everything you ever wanted. You beat them and got the sweetest deal there ever was. Or so you think. Let’s say for a moment that this deal was with a supplier. What is to keep them from calling the deal off and refusing to do business with you at all, especially if they aren’t going to make any profit off of the deal? Oh, you have a contract? Well, what is to prevent them from never doing business with you again? After all you did just swindle them out of any profit. Furthermore, perhaps they will talk to associates and others in the industry about how rotten you were to them, how badly they were treated and again their lack of profit. How many people do you think are going to want to do business with you when this gets out? Some will of course, but your pool just got a whole lot smaller. Why do it? Why even go there? How about creating a deal where everyone is better off, the supplier makes some reasonable profit and you get a great price on the goods. Remember, everyone is in business to make money.
In-person negotiations also have a lot to do with body language. It is important that as you go through the negotiating process you keep focused on the facts and figures so as not to make things personally, unless you have a compliment or two. It is easier to attract bees with honey than vinegar, hold true in negotiations to. So by all means be as nice and amiable as possible to your fellow negotiator. But remember to pay attention to body language as you negotiate. Maintain eye contact while talking or listening, turn your phone off, you know all of that stuff they teach you in basic business class, well this is the time to actually do it. Because they will be paying attention to your body language. Smile, look cheerful. You are about to get a good deal. And you know your numbers so you have nothing to be nervous about. If things get heated at any point during the negotiations and you are there in person, excuse yourself to the restroom. Take a drink of water, splash your face a little and cool down. Remember you can always walk away. Take five minutes and relax. Walk back into the room smiling and apologize for the delay. Remember you can always walk away, there I said it twice so you know it is important. You can also always come back to the table to talk another day. Hopefully two parties can come to an agreement. At the end of the session, make sure everyone is somewhat pleased with the deal that has been reached. Remember to negotiate hard, but remember that the art of negotiating is the art of compromising, there are times to compromise and there are times to stick to your guns. There are other times when you just need to know when to go home. I can’t tell you when those times are or what is appropriate for each situation. But the answer is in the numbers.