Skill in the art of negotiating can make your life easier and more profitable. Failing to develop a knack in this important part of doing business can silently eat away at the foundation of your success.
Whether you are negotiating with prospects, customers, vendors, distributors, suppliers, your landlord or even employees, it is critically important to put yourself in charge. Avoiding these 11 negotiating mistakes will help to give you the upper hand:
1. Not building relationships
There may be times when you have to enter into negotiations without any understanding of the other side’s positions. But wherever possible try to establish a relationship with the other party in advance; doing so will greatly increase your negotiating power. Even seemingly unimportant “small talk” can help to establish trust while giving you some insight into how to deal with the other person. Not knowing anything about your opponent in a negotiating situation is a major handicap.
2. Talking too much
In negotiating, silence carries a great deal of power. Most people are uncomfortable with silence and negotiating pros are well aware of that. Train yourself to get comfortable with the awkwardness of silence and use it to your negotiating advantage. After a period of silence, the first person to speak will usually be at a disadvantage. As one pro puts it, “He who talks the least learns the most.”
3. Not listening
It is often easier for us to think about what we want to say next rather than listen to what is being said. If that sounds familiar, you have a valuable opportunity to bolster your negotiating success. “Listening is a skill that you must work on” says Michele Tillis Lederman, author and adjunct professor at NYU’s Stern School of Business. “Listening is not a passive activity. It takes energy and concentration to focus on what people are saying and what they mean by it.”
4. Failing to understand difference between ...
Failing to understand the difference between arguing and negotiating: In an argument, each person makes a strong and sometimes irreversible point for or against something. Under those conditions, seldom if ever is any productive conclusion reached. In contrast, the purpose of a negotiation session is for both sides to reach an agreement. Almost without exception compromises on the part of both sides are necessary. Negotiation skills on your part can help to avoid that deal-killing conclusion.
5. Waiting for other party to make the first offer
Contrary to conventional wisdom, there is no research supporting the claim that waiting for the other party to make the first move is advantageous; in fact, making the first offer can serve as an anchor influencing the other party’s counteroffer. If you do decide to make the first move, avoid making an unrealistic offer — such a move can backfire by discouraging the other party from continuing in the negotiation. But remember that first offers are hardly ever accepted so make sure that your offer allows room for maneuvering
6. Not knowing your BATNA:
Skillful negotiation calls for careful advance consideration of possible outcomes — that’s why it is best to know in advance what the least is that you will agree to. BATNA stands for “Best Alternative to a Negotiated Agreement.” The term originated in the book “Getting to Yes: Negotiating Agreement Without Giving In” by Roger Fisher and William Ury. Even though your aim in negotiation is to come away with what you want, it’s important to decide in advance what your next-best alternative is (your BATNA).
7. Failing to control your emotions
Keep your emotions in check and you are less likely to enter into a bad deal. By maintaining the option to call it a day you’ll be in a stronger bargaining position if the other party decides to try again. In that case, the pressure will be on them to improve the offer.
8. Forgetting that everything is negotiable
Don’t allow yourself to be sidetracked by statements declaring that something is non-negotiable. Once you decide that the terms for anything are subject to change, you give yourself a strong negotiating advantage by offering a sensible, viable and mutually beneficial alternative.
9. Failing to prepare
Even though you have a clear idea of what you want to accomplish in a negotiation, you still have to think about and prepare your arguments carefully. You also want to learn as much as possible about the other party — whether it is an employee, your landlord, a supplier or a potential big client. No matter how major or minor, the more knowledge you can demonstrate about the subject of the negotiation, the more respect you will get from the other party and the more confident you will feel. Also, good preparation makes it less likely that you will forget something, as it is extremely difficult to introduce new demands after negotiations have begun.
10. Failing to Ask
Key to successful negotiations is asking for what you want. The fear of rejection or of appearing greedy can put a major dent in your negotiation success. Rejections are going to happen; however, it is important to remember that they are not personal. When you get a “no” remember to keep asking. Always have several alternatives to offer, and remember why you have your BATNA.
11. Issuing an ultimatum
The one deadly mistake inexperienced negotiators make, is beginning the negotiations with “this is our best and last offer.” Once that’s said, there’s no room for negotiation. The other party has been put in a defensive position. While it may become necessary to become aggressive, it is always best to keep in mind that the ultimate goal of a negotiating session is to reach a mutually acceptable conclusion. Should a deadlock be reached, one solution could be setting a deadline for the conclusion of the negotiations. This gives both parties time to reexamine their positions and reopen talks with a renewed effort to reach an agreement.