Tuesday, October 07, 2008

Negotiating & Negotiation

Art of the Deal - Negotiation 101

Negotiation truly is an art. What makes it an art is being able to "read" your partner, and walking a fine line in what you ask for. Make no mistake about it EVERYTHING can be negotiated. Even in instances when price is not negotiable, consider looking outside the box - ask for other extras to be thrown in. There are many things that go into a successful negotiation and these are a few that stand out in my mind as being important:

1) Always, no ALWAYS attempt to let the other side make the first offer...this is regardless of who is approaching who first in the negotiation. This is important because right out of the gate, you have a center point that allows you to not offer too much immediately, nor too little. Make them show their hand first.

2) Know not only their business, and existing partnerships - but make it your business to know everything about their competition as well. Never forget, knowledge is power. The more you know the better the deal will be for your company. There is a secondary benefit in that the person on the other end of the negotiation, will not only respect you more - they will also have a better flow of conversation with you (socially). When two people click or clash, this will determine whether or not a negotiation ends before it even gets started, or gets to a successful deal for you.

3) Do not be greedy. Successful partnerships go much further then the initial contract often having amendments, and secondary contracts from the continual relationship as time goes on. It is important then to note that a successful negotiation is ONLY one where both parties feel happy about the outcome. Getting your company a "steal of a deal" in a negotiation can backfire, should it leave a bad taste in your partners mouth. Negotiation MUST be a win-win for all parties.

4) Make certain you are talking with the decision maker, and not a gatekeeper. Many times even though the party on the other end of the negotiation will tell you that it is their domain, and their decision it actually is not. When you get a rejection from these people, do not be afraid to approach someone else within their corporation. It just might have been that you were initially talking to their ad rep, who told you he was their business development guy - even though he was not. Great starting points to secure you are asking for the right person include sites (services) such as LinkedIn . When possible, try NEVER to go in via the switchboard operator.

5) Do not drop the ball. While some negotiations can be tied up over one email/phone/meeting/lunch, others can take a year to close. Do not get frustrated, and realize that many times (especially if your partner in the negotiation is large) you and your agenda are not the only thing on their plate. Often times, in a large corporation they will actually do a market research study, feasibility study or internal meetings to determine if they want to proceed. Even if they are the decision maker, high level negotiations often involve more then one party. Do not let your mind convince you that there are unspoken reasons why they are not getting back to you in a timely fashion. Just follow up...not daily to be a pest, but again, walk that fine line in your follow up.

Please add your comments, what works for you when you negotiate? If you think others can benefit from this post, please DIGG it. Lastly, you can find me on Twitter here.


Anonymous said...

What about always be willing to walk away?

Elliot said...

I just returned from a month of in Egypt, where everything you mention happens in every transaction.

One thing I'd add based on that experience -- be clear where the line is between professional and personal relationships. If they work to blur that line, be wary!

Márcio Miranda said...

Interesting advice, practical.

Most of what is written about negotiation is from people who never did it. I am a professional negotiator and my advice os quite similar to yours. Congratulations!