Six Negotiation Tactics That Drive The Best Deals, Part 2
Negotiation skills are tested every day, whether you're negotiating for a higher salary, improved contract terms or better pricing with a client or vendor. Despite the perception, negotiation does not need to be negative or contentious. In fact, in effective negotiations both parties walk away feeling like they've achieved their primary goals.
Yesterday and today, Promotional Consultant Today is sharing six key negotiation techniques from the best-selling book, Give and Take by author Adam Grant. Leadership coach Kristi Hedges identified these key techniques from Grant's book in her recent Forbes article," Six Surprising Negotiation Tactics That Get You The Best Deal."
Yesterday's techniques included:
1. Share information.
2. Rank order your priorities.
3. Go in knowing your target price and your walkaway terms.
Today, we're sharing three more techniques.
4. Make the first offer. In negotiations, information is often equated with power. We believe it's best to extract as much as possible from the other person before tipping our own hand, so it's natural to wait for the opposing side to strike first.
Grant and coauthor Adam Galinsky have studied research that proves that people who make first offers get better terms that are closer to their target price. The reason is the psychological principle of anchoring. Whatever the first number is on the table, both parties begin to work around it. It sets the stage. The authors also point out that most people make first offers that aren't aggressive enough.
Higher prices make the buyer focus on the positives, while lower ones invite focus on the downsides. In other words, we find data that supports this anchor, so make a first offer that's just outside your partner's reservation price, but not so far that they have sticker shock.
5. Don't counter too low. If you can't make the first offer, then you need to also protect yourself against the anchoring effect. Your counter should be based on the same information you would have used if you'd made the first offer, Galinsky says. You may also want to consider re-anchoring. Let the other person know that their offer is way off and go back in with a new reset. It also may be helpful to call out what you're observing to redirect the conversation. For example, "You may be trying to test my thinking with that first offer, but here's more of what I had in mind."
6. Counter offers make both parties more satisfied. Every buyer wants to feel they got a good deal; every seller wants to feel as if they drove a hard bargain. Parties are most satisfied on both fronts if there was some back and forth. This may come as a surprise if you're someone who abhors negotiation.
The authors advise that you shouldn't take the first offer, even if it meets your needs. By going back and asking for concessions you can ensure that you got the best deal and increase your partner's satisfaction as well. Satisfied partners are more likely to work harder and be more committed to the end result, which is the ideal outcome from the start.
Put these skills to work when negotiating your next supplier or customer contract. A solid deal with back and forth concessions could actually strengthen the relationship.
Source: Kristi Hedges is a leadership coach, speaker and author of Power of Presence: Unlock Your Potential to Influence and Engage Others.