THE ART OF NEGOTIATION

Taken from the Video: The Art of Negotiation @psychologyunleashed

Can you imagine you’re going into Walmart to do some shopping and bargain at the checkout? Visualize the face of the cashier and the people standing in line behind you when you are trying to make up the price of the bread or cereal.

What would the world look like if we all negotiated everything?

I guess that at some point in the example you would be gently asked to pay and leave. The reason that no one will even negotiate with you in such a place is because it is not in the cashier’s interest to sell you and serve you and it is not within her competence to set the final price of the product. And yet you try to squeeze even more purchase value out of your money, right? For some reason everyone accepted this state of affairs, that such haggling in supermarkets or in the clothes shops is somehow so “not good” and that “it is not socially acceptable”. And in a sense, the seller who sets the price tag always wins.

Negotiations that end successfully are almost the same as forcing the shop assistant to our terms. It’s still partly true, and I can’t count how many times I’ve witnessed such hard, straightforward and rude people while working in the creative industry.

But you can be smart about this instead — How? Just knowing the negotiation techniques.

Negotiation should be seen as a partnership — why? Because nowadays the ecosystem of companies is more and more interconnected. What’s more, the relationship ecosystem, if we go down to the level of ordinary people, is also a system of extremely complex relationships. If we have forced someone to accept a humiliating offer, meeting that person at one of many business meetings or conferences will definitely get a negative recommendation. Even if we are the one in the driver’s seat, we will have at least one enemy. You can ask from the other side — how would you feel about this format of negotiation? Because the answer will be the first way of thinking about negotiation based on such the Warren Buffet formula.

10/10/10

Three tens represents Warren’s decision making process. This is asking yourself three questions. How will I feel about it in 10 minutes, 10 months and 10 years?

And it’s an honest case. Some negotiations from the past I still think about to this day so maybe the idea that in 10 Months time you will meet the person you are negotiating with will stop you from practicing dirty negotiating techniques.

Win-Win

The principle that both sides win is often criticized as very Utopian and inadequately representing reality.

But think about it — the point of view depends on this — buyers and sellers have their needs and expectations — if the transaction has managed to reach a compromise that reconciles the needs and expectations of both parties, why not. Win-Win is a concept that requires one thing — that both buyers and sellers want and understand that they are trading with a person and maybe they will come back to that person in 10 minutes, 10 months or 10 years. For example, when buying a car we can agree to a smaller discount than we expected provided the seller gives us an additional guarantee, either a longer service, or anything to compensate us for that amount. It may turn out that, thanks to good negotiations, a mechanic, once reducing the amount, will get two more customers from the customer. Something for something, but in the sense that both parties want to leave the transaction satisfied.

Weight-Based

That means everything is important in negotiations.

Imagine this relationship as putting more elements on the scales. For example, the buyer demands a substantial discount. Now, the seller has a perfectly legitimate right to demand something co-consuming. What will it be? I don’t know, but as a negotiator, you have to be prepared for it. Is the price below the market of a competitor? Maybe they had an exclusivity agreement with their supplier for e.g. one year, 100% prepayment, withdrawal from a complaint for reasons of reduced quality. But usually it is better to follow a simple example — if you are selling something — never accept a discount as such — you can fight with more complex techniques the basic concept is — always demand something in return. Sometimes when a customer expects a certain discount to be fully satisfied, I usually disagree, but for a symbolic 5% I will agree on one condition, for this 5% I get 100% prepayment. This kind of creative technique shouldn’t surprise anybody these days.

Conflict does not mean the end of negotiations.

I know there will be someone in the comments who will write on this. Yeah! Simple, go to court, send an enforceable in a month, maybe two you will receive the payment. It can be easy if, for example, such a freelancer can afford this kind of play, because then they lose a contractor. But it’s always a paradox and a huge dilemma. Because if such a service provider, who is somehow bypassed, can afford this type of task — the loss of a contractor and court execution, it may be more profitable to wait anyway. This is a paradox of choice, which is played out in the heads of many entrepreneurs I know.

Negotiate with yourself more often than with people.

Life is one big choice, more or less conscious.

Now let us return to the earlier example of the paradox of choice — whether to go to court or wait — someone can write — to go to court, because it is immoral and unethical and bypassing people and, as a rule, it must be done. And rightly so, only those who do not go will be right too. Why? Because they have negotiated within themselves comfort and peace of mind — they prefer to take care of the core of their business rather than burn themselves out in a barren conflict. Hence, this paradox takes the form of shades of grey rather than a uniform answer to what to do when someone uses their strength to push us. But this makes us realize to:

Be aware of your negotiating position

When you have no arguments, you have nothing to put on the scales and the conflict will only satisfy your ambitions for retaliation, maybe it’s better to just not negotiate?

When we enter into negotiations with a new supplier we meticulously analyze the conditions. Why? Because your negotiating position is very weak when you enter a new professional partnership for the first time there is always the seller on the other side. So not only do you have to start collecting arguments, but you also need to know where to look for them. Knowing this in advance, your bargaining position is better. The more time you give yourself, the better — of course the seller can limit your time, then serious clashes start, then you must know how to value your insufficient knowledge, within one word — Risk.

Learn to value the risk.

Risk and responsibility are the two most valued things on the market.

Companies and employers can pay a lot of money for minimizing risk and taking great responsibility. Be aware of this — with every bigger transaction there is risk, with every bigger job position there is more responsibility. Try to calculate it every time and relate it to the investment or salary you are negotiating. Make your counterpart aware of these facts, that you see such a risk, or feel that this responsibility is simply worth more. You can calculate it as your working hours for repairing potentially suspicious elements in the initial conditions, or hours invested additionally in a position.

I hope you will use these tools to your advantage and I invite you to leave us a comment and tell us what you think.