Reciprocity

We often hear about random acts of kindness and something inside of us wants to see the kind person benefit in some way. It only seems fair. Some of us even act on this and try to do something nice for the person who was kind, especially if they’ve done something nice for us. Reciprocity is a fairly universal value. People who receive something, tend to give something in return.

This is also true in negotiation. Random acts of kindness are often reciprocated. Some negotiators make a habit of giving the other side ‘gifts’ in the middle of a negotiation to try to improve the relationship and to trigger conscious or unconscious reciprocity. That is not to suggest that it’s always a good idea to give things away in negotiation, yet there are situations where the favour may be returned to you with even greater value.

When is the End of a Negotiation?

Most people think that the negotiation ends when the two sides shake hands or sign an agreement. The deal is done and they should stop negotiating. The truth is that there’s a lot more to negotiate.

First, most negotiations need implementation, and it’s a rare situation where there aren’t things we need to negotiate after we shake hands. If you’ve negotiated in an ethical way and preserved the relationship, you should be in good shape to deal with implementation.

Second, there are opportunities for all parties, if we continue to explore ways to sweeten the deal. Once you have an agreement, you can still discuss ways to improve it, as long as you do it in a way that doesn’t look like you are trying to get out of the original deal. Having such discussions is known as trying to make the deal ‘Pareto superior’ or ‘Pareto optimal’.

When we negotiate, we often keep information confidential and focus purely on the dollars. While that may help us meet our minimum needs, it may prevent us from coming up with the most creative and high value options.

With the safety of a deal in hand, parties are often more comfortable disclosing more information and exploring other ideas. That exploration may allow us to make the deal better for both of us. If we can’t improve the deal, we still have the one we’ve made to fall back on. The deal we’ve made is binding unless we both agree to change it. There is value, therefore, in disclosing information and discussing further ideas to see if you can improve on the deal you’ve already reached.

Negotiation Tactics

There are lots of negotiation tricks out there. Some people like to have the tallest chair, or sit at the head of the table, or have more people on their side of the table, or make you face out the window so you’ll be distracted.

These tactics often backfire by creating negative pushback. As a different approach, try to make them feel superior while negotiating a really good deal for yourself.

Being Passionate

We are all emotional, to a degree. Some of us show our emotions outwardly while others keep emotions in check. Many people think that effective negotiators hide and stifle emotions and that a show of emotion is a show of weakness. We disagree. There’s nothing wrong with being passionate about something. That can sometimes cause the other person to respond positively to your passion.

Even if you’re upset, it’s not necessarily bad to show that you’re upset. There is an honesty and fire in strong emotions that might strike a chord. One of our clients got angry during a pitch to a buyer. Instead of getting upset, the buyer was thrilled to see a pitch from someone who genuinely cared. Our client got the job.

Making the First Offer

Most people prefer it when the other side makes the first offer. We’re afraid that if we make the first offer, we may give away the farm. Or, that our offer may seem unreasonable to the other side and they will walk away.

Effective negotiators make offers that limit the likelihood of either of those scenarios playing out. For example, when they make first offers, they don’t present them as ultimatums, but rather as options to be discussed. Also, they try to base their offer on an objective, fair standard.

There can also be benefits to making the first offer. People who put the first offer on the table set the parameters of the negotiation. That first offer can establish a helpful precedent for how future offers should be made and communicated.

In addition, making a first offer can speed things up. Negotiators often go through a long drawn-out ‘dance’ where both sides are waiting for the other to make the first offer. The person who makes the first offer breaks the ice and allows the negotiation to move forward.

There’s No Harm in Asking

Most people assume that it is not possible to negotiate with retailers. When we see a price in a store, we assume that the price is final. In a lot of cases there is no ability to negotiate the price. However, in certain situations there may be an opportunity to negotiate.

The trick is to ask, and ask nicely, which few people actually do. The retailer can always say no. There was a study from the University of Pennsylvania where business students experimented with trying to negotiate the price of items for sale in retail stores. They were amazed to learn that, in many cases, they received significantly better prices simply by asking.

Price isn’t the only thing you can negotiate when you shop. You may be able to negotiate terms of payment, shipping fees, and a ‘throw in’ or another non-financial benefit. You’ll never know what is possible unless you ask.

Sacrificing Ethics

Do you have to sacrifice your ethics to be an effective negotiator? The answer is not at all. Some people believe that you have to mislead the other person to be an effective negotiator, which is just not true.

The most effective negotiators have learned the techniques that allow them to be honest and ethical while still being able to negotiate the best deal. There are ethical and effective approaches to all negotiation problems. Those who sacrifice their ethics become infamous and distrusted. People won’t want to negotiate with them and their careers end up being short-lived and stressful.

Be Open and Friendly

Does the environment surrounding your negotiations seem a bit chilly? We focus a lot on what we say during a negotiation, and not nearly enough on how we communicate our message. This is because we think more about the substance of what we’re negotiating and ignore the process. A friendly and open attitude toward someone else often causes them to be friendly and open to us. If you’re both open and friendly, your relationship will improve and you will be more likely to work out a good deal.

Educate and Persuade

When we want to persuade someone, we often tell them why we’re right and they’re wrong. The problem with this approach is that others rarely believe they’re wrong, and they certainly don’t like being put down. Instead of that approach, show them you’re open to their ideas and try to explore different options with them. If you have good information, use it tactfully to educate and persuade, not to prove the other party wrong.

Asking Questions

Salespeople are always negotiating with customers. What’s the biggest mistake they make when they’re trying to sell something? They talk about what they think their customers want rather than listening to what their customers have to say.

Customers and clients give us lots of clues about their needs and interests. We need to focus on listening to this information. The best salespeople don’t presume they know what their customers want. Instead, they ask lots of questions about the client’s goals, listen to the answers, ask clarifying questions, and only then provide potential solutions.

Continuous Learning

How much are you leaving on the table in your negotiations? What deals aren’t you making? Do others appear to know more about negotiation than you? No matter how much natural ability you have, you can improve your negotiation skills by learning new techniques.

Have you ever wondered why professional athletes still need coaches? The athletes are very skilled, yet they know that they can still get better results with coaching. If you learn one technique at a negotiation course that gets you a better result, wouldn’t that training be worth it? If you can improve your negotiation results by even five per cent in one year, you will have paid for the training.