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Negotiating
When managing we are often called upon to use negotiation skills. These skills are needed when selling, buying, procurement and managing staff.
We also have the opportunity to use them outside of work when making purchases. In the current economic climate in particular it is often attempting to negotiate on high-value purchases.
The untrained or inexperienced negotiator will normally try to strike a deal with an unrealistic opening request. This in turn is countered with an unrealistic response which often leads to a breakdown in negotiations.
We need to remember that the key to successful negotiations is reaching an agreement which is acceptable to both parties. For example, if your objective is a lower price the other party may be able to meet this objective if a larger order is placed or better payment terms are offered. For this to be successful some movement and leeway is required. The skilful negotiator will move the least but still leave the other party feeling they have done well out of the agreement.
As in most situations forward planning is key to success. When planning negotiations you need to know your "DPL":
Desirable - The point you will aim for.
Probable - The likely range that will be achieved.
Limit - The point you will not pass and at which you will walk away.
It has to be remembered that negotiating is about overcoming obstacles. Try to arm yourself by understanding the obstacles for both parties before entering the negotiations. Once you know what the obstacles are you can work to overcome these during the negotiation process to achieve a desirable outcome for all parties.
T.I.P. (To Improve Performance)
- Be realistic with offers and responses, it saves time.
- Be an active listener. Pay attention to what is being said and how it is being said.
- Ask open ended questions to get information and closed questions to confirm.
Remember: Never negotiate with yourself. Know your limits and stick to them.
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