The Real Art of Negotiating Part I: Negotiating for the Long Run
Negotiation is one of my most frequently requested presentation topics. This is not surprising, since most of us negotiate every day, though most people are so stressed out at the thought they will do almost anything to avoid it.
We make it harder than it has to be
Think about this: Carmax usually gets around 10-15% more for a comparable car than other used car dealerships and much more than private parties. Why? Mostly because they have a no-haggle policy. People are actually willing to pay more just to avoid the kind of pressure and aggressive sales tactics unleashed at most dealerships.
But is negotiating that hard? No. In fact, most of the time getting a better deal is just about asking. In college, I asked a woman why she went out with a guy in class who was widely known for having nothing going for him. Her answer: “He asked”. I never forgot that.
Negotiations start when you ask for something. Don’t think of it as haggling, bargaining or fighting; all you are doing is asking for what you want. That’s what you do every time you go to a restaurant. But if ordering dinner does make you nervous, you may want to work on that before you jump into serious negotiations.
Most deals are better when they reinforce relationships, not when they end them. So forget about waging total war where you only win if your opponent loses. People who negotiate like that end up losing in the long run and declaring bankruptcy a lot. The art and science of a deal is important, but the long-term outcome is more important.
Let’s take this in small bites
I have broken up this large subject into multiple sections spread out across a few blogs, so let’s start with the fundamentals. This article will deal specifically with preparing for negotiation. Don’t have time to prepare? No problem, just hand the other party your money and hope for the best. As my father would say, “If it is not important enough to be prepared for, it’s not important enough for me to waste my time helping you.” That may explain my ACT scores…
Decide what you want
Ever go grocery shopping when you are hungry? Chances are you end up with a bunch of garbage in your cart. The same is true when you are negotiating. If you are hungry for an outcome, or uncertain of what you want, you will make bad decisions. Knowing what you will and will not accept makes things go smoother for everyone. Here are my tips for prepping for a negotiation:
- What do you ultimately want out of this deal? Be realistic and honest; if you are applying for a job and are offered X dollars a year would you take it? While it may be nice to earn double that, realistically you may know that a given offer is fair.
- What is the minimum you would accept? If you don’t have a line in the sand, it’s hard to say when you cross it. As a friend constantly tells me, “See that line behind you? That’s my red line” (usually right before she hangs up). In a job salary scenario, know your minimum amount. If the offer is below that, you have nothing to lose by negotiating up, or walking away if they won’t budge.
- What else adds value to the deal? You may be focused on money, but are there other benefits you might take in lieu of the number you want, such as an office, more time off, a flexible schedule or perhaps a better title? If it has value to you, consider it. Successful deals are usually more about feeling satisfied in total than any one single item. But make sure it actually has value. There is the story about Wil Wheaton from Star Trek: The Next Generation going into Gene Roddenberry and asking for a raise so he could pay rent. Instead, Gene offered to promote him from an ensign to a lieutenant on the show. Since promotion in a fictitious service corps is not much of a value-add, Wil smartly refused the promotion and went for the money.
Done prepping? Great. Write down the appropriate numbers and terms and refer to them, because in the heat of the negotiation you will likely forget what is important to you, and what constitutes a deal-killer. Having a list makes it easier to be clear-headed. Avoid making a decision under stress; take a break, check your prep notes and make sure you are satisfied before getting to yes.
Look at both sides
Once you know what you want, flip the argument and play the role of your adversary. What do they want? What might be their red line and what may they be willing to give up? Showing empathy (not necessarily sympathy) for the other side isn’t a show of weakness, it’s a way to remove some of the stress that comes with making a deal.
Looking at life from the other person’s perspective also gives you an idea of their possible objections and allows you to plan for them. Sometimes you may find you have a more powerful position than you might otherwise have initially thought.
Picture your success
Ok, I know this sounds like “visualize healing the planet” kind of hippie stuff, but it actually works. Imagine in your head what a successful conclusion of the deal would look like, and then work backwards from there. What did you say or do to get there? It helps if you do this while drinking Kombucha, practicing yoga and listening to Kenny G. (I get the feeling I lost a lot of people with that last sentence). Moving on.
Picturing success makes it easier to see what is and isn’t important to you, and what items on your list you feel most confident about. If you can’t picture making a good deal in your own head on your own terms, you are not prepared to go against the person you want something from.
Put it all together
Let’s use the work example again, because not only is it a common scenario, it is often rated by both employees and employers as being extremely stressful. Employees say they feel they have little power when negotiating for money (with women saying this at a higher rate than men). Employers cite a fear of losing good talent because they can’t adequately communicate the total value of their company and offer.
What does it look like if you are an employee prepping to ask for more money? It may go like this:
- I need a $75k-a-year salary. Given the fact that I have a job now, along with my commute and commitments, I can’t do it for less than that. I would like $90k, but my minimum is $75k. The ability to go in earlier and leave earlier, or work longer and have every other Friday off is also appealing. It isn’t worth taking less than $75k a year, but it would be better than $80k and no flexibility in my schedule.
- I know they have been searching for a long time. It’s a new position and it’s a small company, so money is tight, but she mentioned multiple times this is part of their strategic direction for the year. They have other candidates, but I have gotten this far, so they see value in me. My background is a good fit for this company and I bring experience they don’t have. I am on solid ground, but have some obstacles.
- When I close my eyes and imagine speaking to my prospective employer, I see her stressing to reach the top end of my dollar request, but she doesn’t want to walk away either. She seems to be a person who is non-confrontational, so I try a more easygoing approach. I suggest either a review at 90 days tied to more money if they like my performance, or a more flexible schedule. She agrees.
Prepping for the negotiation makes it easier to see the merits of your position, understand the other person’s position and anticipate where the roadblocks are going to come. It also allows you to select your negotiation strategy, which we will cover in our next blog.
Want to know more? My latest book, Lessons from the Len Master, will be published soon by PostHill Publishing. It covers lessons I learned from my father on business, negotiations and leadership. Drop me an email or message and I’ll send you a free copy when it’s available. Or pre-order it now on Amazon by clicking here.