By Jonathan O’Brien, CEO of Red Sheet
1. Decide exactly what you need beforehand
It sounds obvious, but knowing what you want to get out of a negotiation before you start is imperative. Sometimes it is very clear, sometimes there could be several possible but acceptable outcomes. Without a clear end goal, we risk putting ourselves in a ‘decide on the spot’ situation, finding we have been talked into things in the heat of the moment.
2. Do your homework
Before walking into a negotiation, make sure you know what your position is within the market. Doing your homework about the industry, what you are trying to secure, the people involved and culture you are dealing with will enable you to understand where you may be able to leverage a better deal.
3. List your ‘negotiables’
Negotiation is not just about price. In fact, in any situation we may be negotiating many different aspects of value within the overall deal at the same time (our ‘negotiables’) and working towards a final deal across all negotiables simultaneously. Your negotiables might include: price, options, finance, desired delivery date or anything else that is important to you or the seller. For each, decide what your ‘most desirable outcome (MDO)’ is, but more importantly, also determine the ‘least desirable outcome (LDO)’—in other words the point that you will not go beyond. Write these down, keep them with you and don’t lose sight of them during the negotiation.
4. Have an alternative
In negotiation, power comes from alternatives. Without an alternative we can become desperate to make the deal and a well-trained negotiator could easily spot that desperation. If we go into a negotiation armed with an alternative we will be braver and our entire demeanor will naturally be more confident and determined. There is always an alternative, we just need to use a bit of brainpower to think of it – going elsewhere, holding off until another day, even walking away. Crucially, you must totally believe in your alternative if it is to impact how you negotiate.
5. Build rapport
We’re all human, and if we feel the other person likes us we will feel more inclined to make a deal. Most good negotiators who negotiate for a living, such as Estate Agents, make themselves super-likeable, either naturally or through training and if we do the same it can help our position. Buyers frequently make the mistake of trying to remain aloof and cold, which achieves little. Instead smile, be warm and friendly, take time to be interested in them. You might be surprised how well this works.
6. Hide telltale emotion
Build rapport, but hide any emotion that reveals just how much you might want the end result. When we like something our body language can give it away; our expressions might become more interested or we might seem more animated or excited.
7. Beware of sneaky tactics!
“What budget are you working to?”, or “What was your previous salary?” seems a reasonable question from the negotiator and one that would help them focus in on helping you, but this question is designed to get you to reveal your position early on. Swerve the question without giving away detailed information and instead talk about the end result that you want. Let the negotiator start discussions around price and what might be possible. “If we can agree on this today I can do x” sounds like an imperative to close, but don’t be hasty unless you are entirely happy with what is being proposed. Chances are good that the same deal will be there tomorrow. Finally, “I will need to ask my superior” is a very common tactic, sometimes used just to make you feel like you have won the deal of the century or to create a reason outside the room why they won’t conceed. If ‘the boss’ isn’t giving a favourable response then ask if you can speak to them directly. Don’t be fooled.
8. Do the dance
Negotiation is a dance, involving the different negotiables with each party dancing around their positions to eventually reach an outcome. Somewhere amongst all of this is a great result; we just need to find it. It is like we are dividing a pie between us, and with each benefit we secure, the seller gets less. So the seller will be focusing on maximising their position whilst making us feel that we have won a stunningly good deal from them—even when we have not. Hold the negotiables firmly in mind, maintain a position close to the MDOs as long as possible and if you concede in one area, always ask for something in return elsewhere. You will soon get a feel for what is possible.
9. Nearly there
The person you are negotiating with will usually want to close the deal as early as possible, but it is you who should decide when you are ready to close and then only when you believe you have secured the best result possible. Use hypothetical questions such as “If I agree to this then could you agree to that?” and so on. Such questions test the ground without actually making an agreement, so are easier to answer. Finally, know when to stop. A common mistake is to negotiate beyond the point when the best deal is there. This is counterproductive. When it feels like you’ve secured everything you can, close.
10. Oh, and one last thing: don’t forget Columbo
It might seem that the scruffy, bumbling American cop from the ‘70s TV series has no place in negotiation, but in fact he gives us a very powerful final tactic. At the end of each episode, just as the bad guys thought they had got away with it, he would say “Oh, there’s just one more thing…” and then would ask the vital question that would incriminate them. We can use ‘one more thing’ in a negotiation—right at the end, at the point when we are about to sign. The seller doesn’t want to risk losing the deal and so we ask for one final, small concession from the seller that they can easily provide.