"Win More Win More": 5 Negotiation Tips for Finance Professionals
If negotiating a 10% discount on a store spoilt item in a shop fills makes you feel uneasy, negotiating a large, complex business deal probably is your idea of a worse nightmare. On the other hand, some of us can take it in our stride, but I think all of us would agree, help with mastering the negotiation process is always welcome.
To assist, we’ve put together 5 top tips to consider before entering any negotiation process – whether that be bargaining with a supplier, negotiating with a bank or asking for a pay rise.
Define Your Walk Away Point & Understand Your Variables
Prior preparation prevents poor performance. Yes, we’ve all heard that saying before (or versions of it) for a very good reason.
Preparation is king, not only for the reason of becoming comfortable with your demand, but to fully understand and be equip yourself with a self-made negotiation tool kit. Work out what your lowest, or highest walk away point is. When would it become financially unviable to continue the conversation? What else, perhaps intangible, but of value to your opposition, can you offer to get the best deal possible? An introduction to another area of your business? An opportunity to tender for next years’ service agreement? These are your “variables”, little gems and your secret amour in the negotiation process; own, command and use them.
Identify the Real Issues At Stake
Before going into any negotiation situation, understand two things: there are people, and then there are problems. And without managing both, you won’t agree a solution. You need to quickly identify what your opposition is really after, in order to be able to effectively negotiate, and what is mere bluff, or personality bluster. For instance, if you find out that actually their main motivation is to ensure you buy at least 25 laptops because they know they’ll cut a profitable deal from it at that volume, you may find negotiating a cut price, or asking for additional items for free, may be easier than you thought.
Minimise Conflict & Prevent People Being The Problem
I mentioned people above for an important reason. How many times have you entered into a negotiation process that has become tense, or has even disintegrated because of personality conflict? Negotiation is outside of (nearly) everyone’s comfort zone, which means that, for most, these conversations are approached with mixed emotions. Add to this that they may be bringing emotional pressures to the table (perhaps performance related) and you have the recipe for not only tension, but also a sense of aggression and certainly an over-emphasised sense of defensiveness. Watch your tone, try to build rapport, and always be polite.
Don’t Let Price Win or Lose You The War
Price. Everyone thinks about price. You’re probably going into “battle” with a walk away point, based on price, and likewise, your opposition, probably has come into the conversation from the same viewpoint. Refer back to your preparation – what else can you bring to the mix? What else, if price can’t be negotiated, can you ask for as compromise? If you can identify what’s of value to them, be that to offer them exclusivity on services or a cross-sell opportunity, then let that be your bargaining chip. Understanding your variables, and theirs, is key to optimising a negotiation situation.
Finding a “Win more Win more” Solution
A wise person once said to me that a good deal is in your head. If you’ve achieved your objectives, within your boundaries, and you are happy you’ve agreed a good deal, then I guess you could class yourself as a winner. But if you’ve done that by derailing your opposition, that’s a win lose. Why’s that a bad thing? Because, you’ve probably ruined your relationship with your supplier, and that may lead to other problems down the line. Agreeing a win win solution is key to building mutually productive partnerships, so making sure that your compromise is well balanced, and meets enough of both parties’ expectations is key to making that good deal real.
If you really negotiate rather than “barter” you can move to a place where longer term mutual gains produce a “win more, win more” situation that can provide lasting return for both parties.
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