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Negotiation tips to close better deals
"Negotiation is the art of letting
people have your way for their
reasons," says Roger Dawson, one
of Crestcom faculty members in
this month's session on The Road
to Negotiating Success.
Here's a story that illustrates what can happen when some-
one does not have the ability to negotiate a win-win outcome.
In 1931, a 17-year-old boy named Joe became friends with a
boy named Jerry. Both were fans of comic books and science
fiction stories. Joe and Jerry worked tirelessly for two years to
create their own comic book character, eventually deciding to
try and get their story published. When they shopped around
their idea, they were met with heart-breaking results. No one
was prepared to publish their work.
Then, one day, an upstart comic-book publishing company
that was trying to keep its colour printing presses busy needed
something to print. They remembered Joe and Jerry's idea.
"Printing that was better than nothing," they said.
For a 13-page story, delivered in three weeks in May 1938---
and the rights to the character they created---Joe and Jerry
agreed to a one-time payment of $130 (about $2,180 in today's
value). The cover price of that first comic book was 10 cents
at that time.
A copy of that same issue was recently sold for $1 million,
and the rights to that character today are worth hundreds of
millions of dollars. Those rights are still the subject of lawsuits.
The comic book superhero that Joe and Jerry created---and sold
the rights for $130---was the action hero Superman.
Imagine the emotions on both sides of this negotiation, back
in the 1930s, as the value of the Superman franchise skyrock-
eted. Have you ever felt like either of these parties after ne-
gotiating something? Like the publisher who negotiated the
rights to Superman for $130, or the proud, young artists who
sold Superman for this paltry amount?
Here are some negotiation tips that will help you to successfully
close bigger, better deals for yourself and your organisation:
Negotiation Tactic #1: Ask a lot of questions
Most poor negotiators think they have to talk a lot in order
to get their way. Nothing can be further from the truth. Asking
a lot of questions helps you to listen more than you talk. This
is an important psychological device in negotiations.
Typically, the person asking the questions and staying quiet
is the person who has more control over the negotiation. They
are better able to collect information and intent from the other
party. It is said the one who listens more has the advantage
in any negotiation.
Asking a lot of questions also helps you to find much more
about the other party and what they really want.
Plan to ask questions both before and during the negoti-
ation. Pre-write questions to pose to the other party, so you
have a list of relevant, insightful questions to ask during the
negotiation, rather than having to think of them when you
are in the moment.
During the negotiation, ask open-ended questions like, "Tell
me more about that..." or "Why would this feature be so im-
portant to you?" This will help you clarify the assumptions
you made during your preparation about the other person's
interests and concerns. It will help you better understand where
the other party is coming from so you can both craft mutually
Negotiation Tactic #2: Ask for what you want
Poor negotiators underestimate their own power and over-
estimate the other party's power. Never underestimate your
power or let fear prevent you from asking for your desired
outcome. Take the risk.
If you have done your preparation properly, chances are
you've already thought about your desired outcome in the
context of what you think the other party is going to be able
Be ready to make concessions, but don't make concessions
before negotiations get started! And ask for something in return
for your concessions.
Negotiation Tactic #3: Use relative value to your ad-
Poor negotiators tend to think of negotiation situations as a
"fixed pie" in which each party is trying to get the biggest slice
of the pie. A zero-sum game where if one wins the other loses.
But great negotiators know how to use relative value to expand
the size of the pie and create win-win scenarios for all parties.
Relative value refers to something that may be very valuable
to the other party but is relatively easy and/or inexpensive for
you to concede.
For example, a hotel may throw in breakfast free if you book
a room because for a hotel the breakfast may cost $20 to make,
but the guest may see it as a saving of $100. The relative value
to the hotel's guest is five times the cost to the hotel.
Always look for things that costs you very little to give but
are of high-value to the client.
By giving the client what is easy for your company to provide,
in exchange for what is of greater value to you, it will help the
negotiation to moving forward. You've basically "expanded the
pie" by being able to stick to your price-point while providing
the client something that is valuable to them, and creating
lasting value by building the relationship.
You can never make more money, or gain greater value, than
when you negotiate a successful deal. The ability to negotiate
successfully in a way that creates lasting value for the business
and builds the relationship with the other party is a key skill
that all leaders and managers must build and sharpen, in order
to be successful and lead successful organisations. These ne-
gotiation tactics will help you improve your negotiation skills.
Practice them whenever you get the chance and build the
discipline to become a great negotiator!
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www.crestcomleadership.com/tt or email leadersaremade@
crestcom.com or call 684-0728.
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