Negotiation is fundamental to business and is therefore a vital part of the sales’ skill set. It is also very definitely a game and successful negotiators recognise that and learn the rules.
There are probably thousands of books on the subject of negotiation but this post is simply a distillation of my personal thoughts on the topic and should not be taken as anything other than that. Any game has rules and some stand out ones in this case include:
- Identify the correct contact;
- Know your opponent’s hand;
- “Gives and Gets”;
- Role-play;
- The long game;
- Win-win; and
- Exit-strategy
It may seem obvious but many deals fall down because you are talking to the wrong contact within the potential account. If the person you are facing does not have decision making authority within the area of the business where you operate then it is a waste of time for both parties. Any approach must begin with a forensic analysis of the company concerned.
You must create an organogram of the organisation showing all departments and identifying all the management team. Departments are interrelated within any organisation and so often you will need to influence many people to ensure that your new initiative is fully supported.
You then need to understand the recent history of your target company including all the
latest product lines added to its portfolio. Is there a recognisable space for your
technology within the range or does it compete with existing products? If your target has manufacturing capability are you sure that it will not be able to create an own-brand version of your product/s? Companies will always favour own-brand because it is typically more profitable and certainly more controllable than third party alternatives.
Read more about negotiation:
- Negotiation tip: Sympathy makes people more willing to compromise
- How to become a first-class negotiator
- 5 reasons why you struggle with negotiation
All of the above research will enable you to better understand the hand of cards that your opposite number will be holding on the day. Good card players always have this ability because it changes what on the face of it is a game of chance to one that is much more controllable. This raises the concept of “Gives and Gets”. Each negotiator must arrive at the meeting with a list of “Gets” – i.e. items that he/she must obtain from the deal and “Gives” – items that can be traded. Good intelligence on your target allows for an accurate list of “Gives” that will put you in a strong position. However, the manner in which you reveal your “Gives” is important and that is where role-play comes in.
You should see yourself as an actor who must summon up reactions and emotions on demand to best “sell” your position. Many statements from your opposite number are
predictable (especially if you have done good research) and so you can anticipate your
reaction to best effect. If you are a calm person by nature then any raising of the voice in a discussion will have great impact and vice versa. Such “acting” can pay great dividends when done well and in the correct context. To go back to the “Gives” – the other guy must feel that he/she has won those concessions from you because such victories will potentially allow you to achieve one of your “Gets” from the list.
Negotiation is a win-win game after all and that must form the basis of your approach and be reflected in your pitch. Failure to remember that win-win is important normally means that even if you get this deal signed there will be difficulties down the road because the other party may resent the result. Most good business is built on partnership and the “long game” which inevitably means nobody wins 100 per cent of each single negotiation.
Perhaps the most important lesson in any game is to recognise when it’s best to walk away. Your preparation before the meeting will allow you to define clearly the point beyond which your side is not benefiting sufficiently to make a deal worthwhile – the red line. You are therefore prepared mentally to walk away or “exit” the meeting. Sometimes this is a strong statement that actually brings concessions from the other side to allow for a deal to be done after all. If not, you have protected your company from a mistaken collaboration that allows it to play another day.
Andrew Low, who has 26 years in the Agri-business sector, is managing director of JE Invest and the owner of DiscussingBusiness.com.
Image: Shutterstock
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