So you’ve finally landed that huge deal, dream job or client and it’s time to discuss the finer details of your agreement – what next? Contract negotiations or negotiating in general is one of the most important business skills an entrepreneur or job seeker can have, unfortunately, not too many people have it. And no, probably not the best idea to negotiate like Al Capone – yeah, Boardwalk Empire reference!
Some people go into negotiations and meetings with a “wing it” attitude – I am sometimes guilty of this. And you might have the best people skills of any of your friends and you might have the most witty comebacks and you might be really confident but entering any type of scenario unprepared where big money and big business is on the line is simply a mistake.
In this article, I will share with you 10 of the most effective negotiation strategies that will not only help you land your dream job or client, but will also provide you with a strong foundation to build long lasting professional relationships.
Know what they want, know what you want
It helps to be clear on what you want to accomplish. A good way to do this is to determine objectives of the negotiation. This will easily help you evaluate the contract. Some key objectives could be:
- Clearly expressed terms, conditions and prerequisites.
- Products or services of the business
- Compensation and financing terms
- Start/stop dates and renewal of contract
- Risks and liabilities
- Projected expectations.
With objectives already laid down in detail, it is easier to strike a common ground and form a win-win deal.
Put in a strong opening bid
Essentially…DON”T BE A WUSS! This not only gives you the upper hand in the negotiating process, but also communicates the fact that you are confident about your abilities and your products/services.
Another advantage of placing a strong opening bid is that it sets the stage for the bargaining range. Moreover, it allows you to know the ideal range your negotiators prefer to work within.
Heidi Grant wrote a great piece that was published on the Harvard Business Review on strong bidding. You can check out here.
Do your Research
When I say research, what do I mean? Yes, research their company, research their past deals and things like that. But also research them, their lives, what do they do for fun? Who do they go to lunch with and who do that talk to at the club? This might seem intense and immoral but if you can trigger emotional responses then you will most likely establish dominance and come out on top in the deal. And never think that the opposition isn’t doing the same – that’s just naive.
The person who prepares the best usually comes out on top when negotiating. Ask your prospect/client the right questions. This will help you know what is important to them while leading them into traps where you anticipate an objection and already have rebuttals/answers ready to fire.
A really really good salesman told me once that when you ask the questions, you are in control. I don’t know about you but I like being in control of situations like this.
In addition to asking the right questions, understanding the background information, culture and personal preferences of the party sitting across from you could be the difference between sealing the contract or losing it.
Be strong with your body language
Successful negotiators are people who don’t let emotions get in the way of the facts. In other words, they avoid letting an unpleasant personality ruin the negotiating process.
Your body language, tone and the kind of language you use are just as important on how successful you negotiate than the words that come out of your mouth. You can read more about body language and how it affects negotiating here.
Pay attention to detail
This is one aspect of the negotiating process that isn’t much fun. It’s not that intellectual mind game you initiated earlier – it’s the boring let’s read through this so that you don’t come back to me in two or three months and start complaining.
The need to be thorough cannot be over-emphasized. Don’t be a big picture person. Take the time to discuss the contract in detail going over every clause to make sure you understand what you are getting into. Where you are uncertain, ask for clarity.
Remember, it’s the details that always get you. A single unclear word can give an entirely different meaning and that could be the difference between success and failure.
Keep constant communication throughout the process
Sometimes, the negotiating process can last for week’s even months and it is always important to keep constant communication with the parties involved. Creating a sense of urgency around the entire process could help eliminate those anxiety filled nights spent wishing and hoping that your final pitch could be what seals the deal for you.
That said, this does not mean excessive emails and telephone calls on your part. Regular communication with your point of contact is encouraged. The key however is to remain courteous at all times.
Flinch if you can
I had to put this in here because I believe flinching is one of the most powerful underrated negotiating strategies in the market today. Flinching is the instinctive reaction to surprise, fear or pain. Yes, we’re back to playing mind games…aren’t these fun?!?!
For instance your client mentions something which you had anticipated but that doesn’t really sit well with you. You respond with “You are charging how much?” or “Excuse me?.” Following this with silence and make the other party speak up. You now have appeared as surprised or shocked at what they just said. What this does is cause the other party to respond either by offering an immediate concession or try to rationalize their price. It’s something worth trying.
Pro tip: The more they talk the more of a chance they’ll say something that you can use for ammo later.
Make it a win/win deal
It’s important to remember that the main purpose of negotiating is to form a partnership that will allow both of you to meet specific goals and objectives – also know as make more money – and to form a deal that is good for both sides.
Now you might think that this statement contradicts some of the things I mentioned earlier. Coming out a “winner” in any negotiations doesn’t mean the other party is coming out a “loser.” We want to make sure that what we get out of this deal makes sense from a business standpoint.
It is important to make the other party feel like an equal partner and avoid resentments which are usually the cause of contract terminations. Don’t be the kind of negotiator who thinks that for you to win, the other party must lose.
Always end negotiations positively
No matter what happens during this death trap we call negotiations, make sure you always end it positively. If the client/employer/prospect says no to what you are offering, remember they are not saying no to you as a person. Never take anything personally in business.
Don’t take it personal. Understand that this is part of the process. Not every negotiation will go your way. However, you can learn from rejected bids/proposals in preparation for your next deal.
Review it with your lawyer
Here is another boring necessary action. Before putting pen to paper and committing to the contract, make sure your lawyer reviews the document and goes over the changes made for any errors. These errors can prove to be costly especially if overlooked.
Neglecting any of these strategies can be fatal to the success of your negotiation. That said, successful negotiation skills is a quality that can be learned as long as you willing to put in the effort to understand the principles.