I have been teaching negotiation skills at companies for more than 20 years, have read dozens of books on negotiation skills, attended multiple high-level negotiation training programs and, to date, the largest deal I have ever helped negotiate was worth $1.2 billion. Although you can make the art of negotiations very complex, to me, there are just a few essential things you must do well to be an effective negotiator.
1 PREPARATION BREEDS CONFIDENCE AND SUCCESS
Do your homework! This means making sure that you carefully study all of the numbers and gather some solid research and data about the important elements of the negotiation. If you’re undertaking a major negotiation, like the billion-dollar one I mentioned above, this might mean hundreds or thousands of pages of research, data and documentation, while a smaller negotiation might require just a few pages.
2 WHAT IS YOUR BATNA
BATNA stands for “Best Alternative To a Negotiated Agreement.” In other words, what is your walk-away option if you get to the point where you cannot make an acceptable agreement? It is critical to establish your BATNA before you enter into the negotiation — and then stick to it with 100-percent discipline. Many people make poor deals because they either do not understand what their BATNA is or abandon it and agree to a deal that is not in their best interests. It is also important to realize that if you do not have a BATNA or it is so negative that you do not want to exercise it (i.e., lose your job, get a divorce, sell your house at a massive loss), then you must be sure to do the next step of being a superb negotiator: generate multiple ways for you to be satisfied.
3 HAVE LOTS OF WAYS TO WIN
Most people show up to a negotiation completely underprepared and with only one way to win: their way. However, if you take your time to do all of your homework and then come to a negotiation with lots of creative ways for you and your counterpart to reach a truly win-win agreement, then nearly every negotiation you enter will yield a positive outcome for both parties. Let me give you a quick example.
Person A shows up at the car dealership without having done any research online to compare prices, compare models, look at various financing options and so forth. They also have a very specific model and color they want to buy with very specific options, and they want to spend as little money as possible. They walk on to the lot, and out of hundreds of cars, there is only one car that meets all of their very specific criteria. Now, when they sit down to negotiate a deal with the salesperson, they are uninformed and have only a single way to win, which means they are at a tremendous disadvantage.
Person B shows up at the car dealership with a thick folder of Carfax information, consumer trends reports, price comparisons from four other dealerships, the bluebook value of the car that they intend to trade in and preapproval for a car loan from their bank. They walk on the lot and identify five different cars that meet various aspects of their buying criteria. Perhaps they liked one a little bit more than the others, but frankly, they would be happy to drive off the lot with any one of the five cars…as long as they get the deal they want. This person will most likely leave the lot with a great deal and a car that makes them happy.
4 NO EMOTION
Emotion is a negotiation killer; if you get excited, stressed, upset, indignant, mad…you will likely make a mistake and end up with a bad deal. If at any time you feel like you are losing control of your emotions, simply ask for a break. Get up, walk around, get a soda, take some time to calm down and refocus on how to win the negotiation.
5 WHO ARE YOU NEGOTIATING WITH?
One of the major skills that successful negotiators develop is the ability to identify where the other person is on a continuum of support and aggressiveness and negotiate with him or her at the appropriate level of intensity. If the person sitting across the table from you freely gives you answers, is looking out for your best interests, is trying to help you and genuinely wants to get to a win-win agreement, he or she is your negotiating partner. If the person is neither particularly helpful nor particularly aggressive, then he or she is your negotiating counterpart. However, if the person is aggressive, rude and withholds critical information, then he or she is your negotiating opponent. The key here is to meet the other person on the continuum and match his or her style.
I believe that if you do these five key things, you will be a much more effective and successful negotiator.