Improve Your Negotiations With The 5 Golden Rules.   LEARN THEM

“How can I negotiate with someone who doesn’t really understand how the negotiation process works? And so they say and do things that don’t make any sense, or are so reluctant to open up and explore possible mutual interests that we all may end up losing out on a potentially great deal.

“Yet I don’t want to educate them so well that I can’t achieve our best possible deal.”

This is a tough question. And it involves balancing several elements. Here are my recommendations.

First, make sure your counterpart is not faking ignorance. Some individuals act dumb as an information-gathering tactic. They figure you will, at least initially, underestimate them, let your guard down, and thus inadvertently share strategically important information.

I know a sophisticated business professional who often plays up his farm boy roots, figuring his counterparts will consequently underestimate him. And some do, to his benefit.

What should you do? Find out your counterpart’s reputation before you sit down at the table. Those who act dumb — but aren’t — quickly get reputations for doing so. Unearthing this tactic will empower you to see through their act. Then negotiate accordingly.

Second, determine if your negotiation context likely involves: 1) a future relationship between the parties, 2) a significant number of issues, and/or 3) more than just zero-sum issues (where more for one side is necessarily less for the other).

For example, a sales manager might be negotiating a renewal contract with a long-term customer’s new purchasing director. Assume the purchasing director is new to the industry.

In the negotiation, the purchasing director just refuses to share his company’s long-term goals and interests. As a result, the sales manager can’t even formulate his best offer.

In this or similar situations, consider openly educating your less-knowledgeable counterpart about the negotiation process in your particular environment. Help them understand that — in your industry — it’s almost certainly to both of your benefits to start the negotiation process with some mutual information sharing about goals and interests. Explain that you can’t offer them their best deal without fully understanding their needs.

Perhaps even share the potential downside for them if you both don’t do this.

Of course, your counterpart may initially distrust you simply because you sit across the table. If that is the case, don’t try to educate them yourself. Instead, suggest some independent parties in your industry who can help them understand the patterns and way that negotiation is typically done in your environment.

Alternatively, if the negotiation environment does not likely involve a future relationship between the parties, has relatively few issues on the table, and/or revolves around zero sum issues, then be wary of educating them too much.

In these contexts, you potentially can gain a competitive advantage because of their relative ignorance. So, be especially strategic about what you tell them. Don’t be dishonest, but don’t lay too many of your cards on the table.

For instance, if you’re selling your house and an unrepresented out-of-town home buyer has not picked up on the recent decline in the housing market in your area, don’t tell them.

Finally, don’t assume that just because you may be a successful negotiator in one context that your success will carry over into other negotiation environments. The lesson? Always educate yourself to the specific patterns and expectations inherent in new negotiation arenas.

And if necessary, hire an industry expert to educate and help you navigate the ins and outs critical to your success.

Bottom line — do your homework on how the negotiation process works in that environment. In that way, you will not only help achieve your goals, but you will lessen your counterpart’s frustration level.

That will be good for you — and for them.

Published February 2, 2007 The Business Journal

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