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Negotiating Tips

soj

Founder
When I was on SmartCompany this morning, I saw this great article by Sue Barrett of Barrett.com.au

Top 10 tips when negotiating

The key points:

1. Develop “negotiation consciousness”

Successful negotiators are assertive and challenge everything. They know that everything is negotiable.

2. Become a good listener

Negotiators are detectives. They ask probing questions and then remain silent. The other negotiator will tell you everything you need to know – all you have to do is listen.

3. Be prepared

The boy (and girl) scouts were right. Gather as much pertinent information prior to the negotiation. What are their needs? What pressures do they feel? What options do they have? Doing your homework is vital to successful negotiation.

4. Aim high

People who aim higher do better. If you expect more, you’ll get more. Successful negotiators are optimists.

A proven strategy for achieving higher results is opening with an extreme position. Sellers should ask for more than they expect to receive and buyers should offer less than they are prepared to pay.

5. Be patient

This is very difficult for some people. We want to get it over with. Whoever is more flexible about time has the advantage.

Your patience can be devastating to the other negotiator if they are in a hurry.

6. Focus on satisfaction

Help the other negotiator feel satisfied. Satisfaction means that their basic interests have been fulfilled.

Don’t confuse basic interests with positions. Their position is what they say they want. Their basic interest is what they really need to get.

7. Don’t make the first move

The best way to find out if the other negotiator’s aspirations are low is to induce them to open first.

They may ask for less than you think. If you open first, you may give away more than is necessary.

8. Don’t accept the first offer

If you do, the other negotiator will think they could have done better.

They will be more satisfied if you reject the first offer because when you eventually say “Yes”, they will conclude that they have pushed you to your limit.

9. Don’t make unilateral concessions

Whenever you give something away, get something in return. Always tie a string “I’ll do this if you do that”. Otherwise, you are inviting the other negotiator to ask you for more.

10. Always be willing to walk away

Never negotiate without options. If you depend too much on the positive outcome of a negotiation, you lose your ability to say “No”.

Remember, everybody lives by selling something.


I love number 5. I've got to work on that myself!
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DavidL

Top Contributor
It's a good list but I do disagree with #7 actually. For me, invariably when I do it this way I get a shocking lowball and from there on it's a battle to get anywhere reasonable.

Eg you think a domain is worth $500. So you'd be happy to sell it for anything more than $750 say. If you let the buyer make the first move and offer $100, it's a real battle to get anywhere near the $1750

However if you state you are looking for $1,500 say but stress strongly that you will always consider ANY OFFERS WHATSOEVER, you are unlikely to scare the buyer off and you can bet their opening offer will be more than $100.

Price anchoring - I've posted this before:

http://youarenotsosmart.com/2010/07/27/anchoring-effect/

The Misconception: You rationally analyze all factors before making a choice or determining value.

The Truth: Your first perception lingers in your mind, affecting later perceptions and decisions.
 

snoopy

Top Contributor
Definitely disagree with #7 also. Asking the other party to go first sets things up for the "extreme" positions that she talks about earlier. Trying to talk someone away from an extreme position is much harder than setting the benchmark yourself.

I used to get the buyer to go first, not once the did they make an offer higher than I would have asked for. 90% of the time it would be a lowball, the other 10% of the time it would be just low. Setting the benchmark yourself will result in more sales occurring at prices that are better for you.

I think also the extreme position stuff is dangerous advice for people buying/selling domains. If it is not on the reasonable side then a sale is very unlikely in my view, they'll find something else.
 

snoopy

Top Contributor
8. Don’t accept the first offer

If you do, the other negotiator will think they could have done better.

They will be more satisfied if you reject the first offer because when you eventually say “Yes”, they will conclude that they have pushed you to your limit.

//////////////


Think this is bad advice also. Sometimes it makes sense to accept the first offer. If you reject the first offer you risk missing out on the sale or the purchase. I think there is ways to accept a first offer whilst sounding like you're paying way more than you anticipated, thinking about it overnight and telling them it is alot higher than you budgeted, talking to your business partners etc.
 

GGroup

Regular Member
It's a good list but I do disagree with #7 actually.

I had the same reaction at first... but then I read it again (and again).

Now, I think # 7 actually reinforces the anchor effect theory. The way it is worded, in relation to all the other points, is just confusing.

I read it as advice just for the buying negotiator, due to the phrases "aspirations are low" and "may ask for less than you think".
These indicate, to me, it is only advising the buyer, in point # 7.
 

snoopy

Top Contributor
I had the same reaction at first... but then I read it again (and again).

Now, I think # 7 actually reinforces the anchor effect theory. The way it is worded, in relation to all the other points, is just confusing.

I read it as advice just for the buying negotiator, due to the phrases "aspirations are low" and "may ask for less than you think".
These indicate, to me, it is only advising the buyer, in point # 7.

I think it works both ways, if you are buying, offer first.
 

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