The Art of Business: Learn to Love Negotiating
Like a first date, negotiating is thrilling and frightening all at once. But if you have confidence in yourself, prepare well, and know what you want, things will turn out great. Here are a few tips:
Research, research, research. Information is power. Collect as much information as you can before you start any negotiation. Your best source of information is the client. Use casual conversations and listen like a kindergartner. Everything you glean will help you design a persuasive presentation based upon the client’s needs.
Be prepared. Before you negotiate, know exactly what you want and be ready to articulate your position; a negotiating meeting is no place to figure out the terms that are acceptable to you. You won’t get every deal point, but at least you’ll know in advance what are your parameters. In fact, it helps to break down your concerns into three categories: nice to have, like to have, and must have. Walk through several “what if” scenarios beforehand. Anticipate counter-proposals and compromises and think about how you will react to each.
Be vigilant. If the client has prepared a request for proposal or otherwise outlined the parameters of the project, look carefully for items left out, deliberately or not. If you want omitted points included, ask that they be added. Better yet, volunteer to write a proposal so you can make sure to cover all the ground you wish.
Be client-centered. Your client doesn’t really care that you haven’t had a decent gig in months or your mortgage payments are two months behind. In fact, the less the client knows the better. Your approach should always be client-centered, not self-centered. Your job as a negotiator is to describe your value in relation to the project and the client’s needs. The trick, of course, is to balance a strong customer orientation with a firm negotiating posture — be customer-oriented but not desperate.
Be cool. It’s amazing how much of negotiation is attitude. You can affect both positively or negatively the way you are perceived by the attitude you project. Project confidence, organize your thoughts. Choose your words carefully, speak or write clearly and positively. At the point of having the least leverage to win the job, you must demonstrate the most self-confidence.
Be inquisitive. Don’t be shy about asking questions. Skillful questions can transform a negotiation from an adversarial conflict into a partnership. By asking questions, you’ll also get your client to reveal more. Start with open-ended questions and move to narrower, more direct questions. Once you have asked a question, be quiet and listen carefully.
Open high. You can always drop your price, but you’ll never go higher than your opening bid. State your price without squirming or apologizing. If it makes you feel more comfortable, precede your bid with reasons why you’re the best candidate for the project.
Avoid significant early concessions. Never give too much away on the first date. Same goes for negotiating. If necessary, table items for later discussion, including compensation. At the very least, remain neutral to the customer’s initial demands until trade-off opportunities emerge or your gentle attempts at persuasion don’t work.
Be honest and fair. What a concept: Be open and honest about what you want. But remember to be careful about how much information you reveal. Think about what information you don’t necessarily want clients to have. Reaching common ground and setting the stage for mutual respect and cooperation may be more important than the few extra dollars you might be able to obtain otherwise.
Be prepared for disagreement. There will be disagreement and disappointment during any negotiation. But how you disagree will affect the outcome and ultimately affect your relationship with the client. When you disagree, look for the common ground or set the point aside until later. At the end of your discussions, you may find you have four or five points of disagreements. You can then exchange deal-point concessions until all points of contention are dealt with. When you must make a concession, do it graciously, not grudgingly.
Expect the unexpected. Always have a good idea in advance of how you’ll respond if things do not work out as you plan. When you’re blindsided by an unexpected demand, sidestep it by suggesting it be addressed in conjunction with other issues later on or simply ask for more time to mull it over. Above all, avoid rash decisions; they rarely look good in hindsight.
Let the client sell to you.The negotiating process starts with the client buying and you selling. But as you get further along in the process the balance begins to shift. Once a client has decided to opt in, they’re in a position of selling the terms to you. Let them. When it comes down to money, you should have two absolute figures in your head: the highest amount your services are worth before you’re ripping off the client, and the lowest amount you will accept.
Close like a pro.If the client is ambivalent, take a cue from the used car-salesman handbook and offer choices (the green Honda or the silver Mazda?). If you think it may help, back yourself up with a written budget or other documentation that details your costs. If it comes down to money and the client won’t budge, use an ultimatum as your final position, but make it soft, not hard: “I understand your position but I just cannot see how I can go any lower.” When you finally reach agreement, close it with a firm handshake or whatever the virtual equivalent may be.
Finalize all agreements. Don’t leave details hanging. It is often amazing how two people sitting in the same room can have different perspectives concerning what was agreed upon. To ensure that everyone is clear, summarize the agreement verbally or shortly afterward in a letter of agreement.
Stop selling. A negotiation is the last successful element of a sales pitch. Once you’ve reached an agreement, the pitch is over. Stop selling. It’s a hard transition to make because you’ve been in a selling mode for so long, but selling after the fact makes you look unsure of yourself and will lead the clients to question his decision. Instead, shift gears quickly and begin working on the project.
Negotiating is never easy, and no clear and fast rules apply because each negotiation is different. But that’s what makes negotiating so exciting.
This article was last modified on July 18, 2023
This article was first published on July 15, 2002
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