Almost every day of your life you are involved in at least one and often many negotiations. As a matter of fact, you are probably a master negotiator for the vast majority of those, without even consciously thinking about it. And yet, when it comes to big negotiations, people all too often don’t employ all the effective tactics that they see and use every day.
The key is to take what you learn from your smaller negotiations and apply those same techniques to your bigger ones.
For example, did you take a shower this week? Do you realize that your ability to take a shower was based on negotiating skills? It’s true. Unless you have your own water tower, then you and someone else must be in an ongoing
negotiation so that when you turn the faucets on in the shower, water comes out.
Did you drive a car today? If so, you were negotiating decisions during the entire drive. When you used your turn signal you were non-verbally negotiating with other drivers about where you wanted to drive, and when. At every stop you were part of a negotiation about who should go at a given time. If you purchased gasoline for the car, that was a negotiation.
The examples are almost endless. Even answering your phone is a negotiation. Someone is trying to get you to do something, and you are deciding whether to do what they want, or to do something else.
Within all these small negotiations, and the thousands of others just like them that you participate in every day, are three key steps. You see, and most likely intuitively follow, these steps all the time. Think now about applying them to your bigger negotiations.
Step #1 Know What You Want and Why You Want It
It is very hard to obtain what you want, if you don’t know what it is and why you want it. Knowing you want water in your house so you can shower each day, provides the focus for you to have a negotiated agreement with the water company and not a pool company or the cable company. And yet, many times people enter larger negotiations without knowing what they want and why.
One of the most common places this occurs is during salary negotiations. People walk into a discussion without having a very clear picture of how much they want, and what they plan on doing with the money.
This leads to a host of problems. The first one is that by negotiating on salary, the negotiation gets too focused. Potential solutions that would work for both parties are never addressed because they are out of the scope of “salary”. For example, suppose you are in the final phases of interviewing for a new job, or heading into an annual review, and you are at the point where you are discussing how much you will get paid. At a minimum, think of that negotiation not in terms of salary, but in terms of total possible compensation.
Your boss may not be able to give you a ten thousand dollar increase in your salary. However, he or she may be
able to give you a tuition credit, free access to company sponsored day care, or a company car. Perhaps you can get a travel allowance for your daily commute or free food service at the company food-court. If you were going to spend money on those items anyway, then receiving those benefits is just as good as getting the
Creating a list of your monthly expenses, and then negotiating for alternative ways your company can pay for those, is an excellent example of following step #1. By knowing what you want, and why you want it, you can find many ways to get the results you are looking for.
Step #2 Do Your Research and Have Multiple Options Ready
The best time to explore alternatives is not in a negotiation, it is before a negotiation. Think in terms of the compensation example from Step #1. If you had already done the research and identified that the company has a program in place for tuition reimbursement, then that option becomes instantly more viable than if it is an unknown possibility.
Justifying a purchase price for everything from a new car to a corporation becomes much easier if you can put specific examples in front of the person you are negotiating with. Do the research they don’t have time for, so that you can make their decision process as easy as possible. Provide them with information that justifies why the decision you want them to make, is the right one.
Most people are looking for someone else to bring them actionable solutions. It isn’t that they don’t want to give benefits, it’s that they don’t have time to figure out how to give the benefits. Do yourself a favor and do all the legwork for the other person. If all they have to do is sign on the appropriate documentation, which you have already obtained and filled out for them, you are much more likely to get that signature.
This step is applicable to all types of negotiations. Whether you are trying to purchase a 400 unit apartment building or a single family home, do your research ahead of time and have your options ready when you come to the negotiating table. A filled out home warranty or an umbrella liability policy is much more likely to be put in as part of a deal, if all the other person has to do is sign the paperwork.
We participate in these tactics all the time, although usually from the receiving end of the assistance. For example when you pull up to a gasoline station, you engage in a mini-negotiation. By enabling customers to pay quickly and easily at the pump, the gas companies are negotiating with you to purchase a full tank of gas instead of buying as much gas as you have cash on hand. They have even waived the signature requirement as a way of making it easier for you to decide. This is a classic illustration of both how effective it is to think before, not during a negotiation, and the benefits of having the right options available.
Step #3 Ask What the Other Party Needs and Wants
Knowing what both parties need and want out of a negotiation opens up a world of possible ways to make that happen. A good philosophy to remember is that successful negotiations are not “Us against them,” they are “Us and them.”
Put everyone’s needs and wants on the table and explore the best ways to solve all of them. People use a quick version of this method all the time on phone calls. Very early in most conversations someone will ask “What do you need?” or “What can I do for you?” Those questions quickly get all the needs and wants on the table. Then both people come to a quick consensus on what to do and when.
In larger negotiations this may take the form of a business owner who needs your product or service to grow their business, but can’t afford to pay a lump sum for it. Knowing that the lump sum payment is the obstacle, you can look for alternative ways to fund the deal so that they get the product or service, and you still make the sale.
If you know that a potential employer is unable to meet your compensation needs because he or she has to keep on budget for this year, but they will have a new and larger budget in four months, then that opens up all kinds of options for a deferred bonus, six month raise, four months of flex time, etc.
If that same potential employer has funds budgeted to hire a second person for a skill set that you also have, you could take on a mix of responsibilities and have some of those funds re-allocated to you.
Being a master negotiator requires taking the many skills that you hone and prac
tice every day, and applying them in different contexts. Take these three steps and as you use them during the week, think about how you can apply them elsewhere. Then the next time you head into a big negotiation, you’ll be ready to get exactly what you want.