Negotiate to Your Advantage
The hardest and most important part of any negotiation is knowing when to walk away.
Few things are sweeter than a successful negotiation session where both parties leave the table with a winning solution. That's because the stakes are high: Negotiate too hard and you lose the deal; be too timid and you may not get what you want.
The three most important concerns in any negotiation are the relationship, the risk, and the value--the real decision criteria underlying any future business transactions. So whether you're negotiating a salary increase with your board or a contract with a vendor, before beginning the process it's critical for you to cross three essential mental bridges:
1. Clarify the relationship. "What is the current real and perceived business and personal relationship, and what is its true value to my credit union's future?" Far too often people hold on to the past not realizing that they need to let go to be free to reach out for something better.
Carefully consider what could be lost in this negotiation, but also what new doors may open should there be successful negotiation. Too many business leaders continue with existing relationships beyond their prime simply because it's easier and more comfortable than striking out to develop a new relationship that better suits their organization's future.
2. Clearly structure the outcome both parties desire. Very often, people enter a negotiation with the drive to win, but they never commit to paper beforehand precisely what that means. Yes, they have a general idea (to place the contract at the best price or cost); however, they haven't defined the optimal combination of price/cost and all other terms that reflect both parties' best long-term interests.
Identify what it will take for all parties to believe they've been treated fairly. Outlining what each party should view as a "great deal" often leads to the optimum win-win agreement. After all, negotiating is merely a more formalized variation of common marketplace bartering. It's all about give and take and each party's perceptions of value. You offer. They counter. You respond. And so it goes.
3. Determine your walk-away point. The hardest and most important part of any negotiation is knowing when to walk away. Decide when you'll walk away from the deal before the negotiation process, because it's difficult to identify it in the heat of the negotiation.
It's important to approach your walk away point calmly, as negotiators truly need to understand what each side requires to make it a "great win-win" agreement. Then, if the other side becomes unreasonable and prevents your desired outcome from happening, weigh the predetermined value you placed on the relationship as well as ask the question, "Do we really have a mutual relationship or merely one party taking undue advantage of the other?"
Once you've laid out the previous three steps you can begin negotiation, realizing that at times the process requires the patience and confidence to be still. For example, if the other party precipitates a long silence then wait, say nothing, and let the other party break the silence.
While it's important to hold out firmly for your high priority/risk issues, holding out for a lost cause isn't in your best interest. Know when to give in on a point. If it's not a walk away issue, then concede and negotiate onward.Most important, realize when you're approaching the walk away point. That will help you try and steer the negotiations away from falling unnecessarily into a downward spiral, where relationships deteriorate and from which it's often impossible to recover.
Copyright 2005 by John Di Frances.
Secrets of the Trade Revealed: Bartering for Business
In its simplest form, bartering involves an equal trade. One business swaps a good or service for another. A lawyer, for example, may swap a few hours of legal assistance for a stay at an out-of-town hotel.
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Avoiding and Accomodating in Negotiation
The avoiding approach to negotiating is characterized by losing, leaving, and withdrawing. No commitments are made, and behavior is impersonal. Use this approach when you would get hurt by staying or when you want to change the ground rules. It is useful when issues are trivial and is helpful when the other side has much greater power. Its disadvantage is that the problem is left unresolved, and this can result in nothing getting done if too many problems are swept under the rug. In the avoiding approach, at least one of the parties displays a subtle reluctance or unwillingness to resolve the issues. This approach is of little use for those working with organizations as it strains relationships and prevents the building of trust between the parties involved. Using this approach can also increase the other party's resistance to negotiation.
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Managing the Sales Negotiation Process
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Can a Corporate Executive Really Use The Beautiful Mind; To guide decision making?
I would like to comment on the "A Beautiful Mind" movie and the book, which was actually much better. I just finished reading another book on the similar side of John Nashs' assertion of working together rather than competing against. That book was "Co-opetition." By Adam M. Brandenburger (Havard guy)and Barry J. Nalebuff (Yale Dude). Many have been aware of such theory for quite a while and practice such occasionally for the betterment of an industry or through the art of diplomacy, sometimes through misdirection and other times as an experiment (nothing more, nothing less) especially when it really does not matter and it is not really core to our direction and market domination strategy for any given region. I would have to differ from the movie version in that if you tried to run your business in the fashion that Jim Nash discussed in theory you might do well for a while, but would eventually get hammered in the market place, whether or not you actually were able to sleep with a brunette when you wanted the blond with the big bust (go see the movie, you will understand that comment). In theory it sounded wonderful in the movie yet would not take you very far in the cut throat world of business, even though the regulators always want to level the playing field, more often then not they are manipulated agents for the competition as indicated by Adam Smith, Carl Marx and Rodney Dangerfield in "Back to School." The fact is that even the referees of business, namely the regulating bodies who want to see the playing field leveled usually tip it in the favor of a politically powerful and well connected companies which fund the campaigns of the over see'ers (politicians). Once the regulatory bodies find they have been duped rather than bring it up with the politicians, they want to punish all the players in the industry and kick them out of the game, of course this hurts the fans (consumers) and then the game (industry) and then the referees and fans are not needed (read; "When Atlas Shrugged" By Ayn Rand).
Lets Make a Deal
Smart buyers will always ask for a better price. Unfortunately, too many sales people and business owners automatically think that reducing their price is the most effective way to respond to this request.
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There is no right or wrong to fire up your opening negotiation...
Ask and you shall receive & knock and it shall be opened &send an email and see what happens.
Win-Win Power Negotiating
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Negotiating: Forcing vs Compromising
Forcing is a hard-nosed approach that makes heavy demands from the outset. Emotions are displayed frequently, few concessions are made, and the bottom line may be concealed. This technique is used when the other side is determined to make you lose, or in one-shot deals. One advantage of this approach is that it normally uses less time than other approaches and leads to total victory if you have more power than the other side. The disadvantage of forcing is that it can lead to stalemate if the other side uses the same approach. The other side can also become resentful and vengeful.
The Art of Negotiation in 535 words
I want to get better at negotiation, but where to start? UK Amazon currently has 2332 books on negotiation. Google indexed nearly 4 million relevant (yeah right) pages. All I need is a simple, straightforward model that I can put to use now.
Barter and Its Benefits
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Business: Keys To Negotiating Well
Whether it's buying a car, asking for a pay rise, saying 'no' to a friend or renting an apartment - at some stage in our lives we all are going to need to know how to negotiate. Yet, so few of us know the basic skills before embarking on life changing purchases or decisions! These 8 keys will assist you negotiate well.
Guidelines for Ambassador Appointments
Ambassadors to other countries are a vital part of international relations. It is not uncommon for an ambassador to be the face or image of one country to another. Ambassadors act as a window into the importance of education, security, financial situations, business, and other societal issues. An ambassador has the power and authority to create opportunities through negotiation. Just like a negotiator, an ambassador must be equipped with specific qualities to ensure success. The distinction between the two should be that in the same.
National and Cultural Negotiation Style
Cultural and national negotiation styles reflect communication behaviors and the priorities of that culture. Priorities such as trust, teamwork, non-confrontational situations, and openness are all along a sliding scale with each culture. The communication behaviors of each culture reflect these priorities and can dictate how a culture will engage in negotiations. Often, Japanese and other Asian negotiators will plan a social event and dinner before any real negotiations occur. Likewise, Americans place an emphasis on taking clients out to dinner and a round of golf. Engaging in this type of activity builds trust and opens the line of communication between the two parties. Using persuasive techniques to "connect" with another person can lead to trust and the sense of a relationship being built. The negotiation styles of these two cultures mesh well, thus allowing them to understand the priorities of each other's culture.
Neogtiation: How to be Right Without Making Other People Wrong
What exactly are we trying to accomplish by proving to others that we're right? We might win the argument but ultimately lose the relationship. Perhaps a better, deeper-rooted question is this: Why do we lose sight of success, of our big objective, when we feel challenged or intimidated?
The Art of Haggling
Did you know that at one time in this country that there were no fixed prices on anything. You would go into a store and find an item you needed then you would begin the process of negotiating the price. This might seem foreign to us today, but it use to be the rule. In a later article I'll talk more about the history of price negotiation in this country, but today I want to give you some pointers about how to negotiate well.
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Last week, a wonderfully-skilled electrician installed a new light fixture for us. He was competent, courteous and efficient. He answered all our questions simply, with skill and eloquence. I was amazed, as you might imagine, when I asked him, "How much do we owe you?" and his embarrassed reply was, "Gee, is $50 okay?"
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