10 TIPS OF
Honing the way you negotiate with suppliers
and customers can impact on your profits.
Patrick Forsyth shares his tips to help you
reach satisfactory agreements
Negotiation is part art, part science. It is
a dynamic, interactive process, and you need
to be well prepared, yet flexible, and to
recognize that the people element is the
most important and the least predictable. It
is complex – to negotiate successfully you
must see the process in the round, take a
broad view and have a good grasp of the
principles involved, so you can orchestrate
and fine-tune the process as you proceed.
Small adjustments along the way can make a
difference to the outcome.
Plan ahead. Negotiation goes further than
just selling. It is agreeing the basis on
which a deal can be made to the satisfaction
of both parties. This can involve many
variables that must be agreed. These might
include price, terms, timing, who does what.
Preparation is crucial: consider the person
(or people) with whom you will negotiate,
what you need to achieve and how the process
may go. Preparation is a map that will guide
you in advance, as well as help you deal
with the unexpected along the way.
Consider the ‘package’ of factors that you
need to deal with. What is most important?
Where can you be flexible? What can you
compromise about? Negotiation is a process
of give and take, to an extent. Your aim is
to reach a win-win agreement both parties
can live with. Many negotiations are part of
an ongoing relationship and you may have to
deal with people and secure their
co-operation in future. Set clear goals for
yourself to act as guidelines to help you
find your way throughout the process.
Make sure the person you are dealing with
has authority. If you have to deal with
several people, you’ll need to judge when to
move on, up and involve others who can make
a definitive decision. If several people are
involved (even in the background), find out
their relationships. Are you dealing with
someone who has been delegated the task?
Would it be useful – or insulting – to refer
to their boss during the meeting? Time spent
in reconnaissance is rarely wasted; ditto
confident negotiator may seem unshakeable,
but it may all be an act. Body language is
not quite a science, but watches the signs
that people give out. Are they making direct
eye-contact? And if so, are they doing it in
a friendly or challenging way? Positive body
language helps establish rapport, so if you
want to create a strong working relationship
think about adopting confident and open
positions; face people full on and don’t
cross your arms.
Be realistic. Your plan must be workable and
manageable. It should play to your strengths
– such as your knowledge or experience – and
avoid situations where any weaknesses are
exposed. Your authority is important. If
people do not believe that you have the
authority to negotiate they will dig in
their heels; saying you will have to check a
point with a third party risks undermining
your position. Most importantly, you must
appear to be confident, so that if you say
‘no’ it is believed.
Controlling the ebb and flow of the meeting
is crucial. The core of the process is
‘trading variables’, essentially a process
that is led by ‘what if’ questions, such as
‘What if I could agree early payment, could
you agree earlier delivery then?’ You seek
to get your priority points agreed by making
concessions on factors of less importance to
you. The trick is to maximize the apparent
value of what you offer and minimize what is
offered to you. Balance is key: your
reasonableness must drive matters forward as
Money is important, but much goes with it:
for example, price can involve terms,
discounts, premiums, and link to other
matters such as contracts, completion dates
and delivery. It is the package that is
negotiated that matters. You should decide
priorities beforehand: what variables you
must have, on what you must stick close to
your ideal and what are ‘loss leaders’ –
factors that can be used as concessions to
win more in other areas. Keep the full
picture in mind.
important not to get carried away in the
heat of negotiation. If you need to buy
yourself time to think, go on the offensive
and ask further questions or agree that an
area needs more consideration. Don’t be
forced into making a decision on the spot.
If there is a lull in negotiations take a
moment to review your objectives and don’t
be afraid to repeat the key concerns you
want to address. If there is silence don’t
rush to fill it, just wait for an answer or
rephrase your question.
GET IT IN
is important. Take notes as you go.
Summarize regularly and do not allow any
uncertainties to let points be scored off
you. For example, at the end of a drawn-out
meeting, when lots of figures have been
batted about, don’t find yourself having no
record of the discount that was agreed.
Similarly when matters are concluded it is
vital to get things in writing – there’s an
old saying that a verbal agreement isn’t
worth the paper it’s written on.
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Seminar please contact us.
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