Negotiation is a part of life and being able to handle it successfully can make a big difference to ones’ productivity. Here are some tips that have helped me as a purchaser.
Be willing to negotiate in the first place
Some people are too shy to talk about money. Others think it’s rude or demeaning. And in many cases they’re right. However, when it comes to doing a deal - and we all have to sometimes - being unwilling to engage in “money-talk” can be a very expensive business.
There are a lot of experienced negotiators out there. If, for instance, you are buying a house or a car, or taking a new job, you can be sure you will have to deal with such people. If realize that you are timid about the whole business, many will take advantage of that fact.
You also should not be shy about turning something that may not immediately appear to be a negotiation into one. If I am buying a few expensive things from the same store, I will often ask them to throw something in for free or reduce the price. Just because there is no sign saying you can do that, doesn’t mean you can not. Often, simply by asking for something extra I will get a better deal.
Do not get emotionally involved
One big mistake many amateur procurement negotiators make is to become too emotionally attached to winning. They shout, threaten and demand to get their way. This is all counter-productive.
Most deals are only possible if both people feel they are getting something out of it. If the person across the table feels attacked, or does not like you, they probably will not back down. Many people hate bullies, and will be more willing to walk away from a transaction if it involves one.
Keep calm, patient and friendly, even if the other person starts losing their cool. Make sure you leave any pride or ego at the door. You are much more likely to do well that way.
Do not get suckered by the “rules” trick
When someone sends me a contract to sign and there is something on there I don not like, I will cross it out. Am always free to add things that I want if I believe they should be. Sometimes, the other party will come back to me and say “You are not allowed to make changes to our contracts like that”.
Oh really? Do not be rude.
Since it is me who is signing the contract, then I should be in position to know what I deserve. If the other party is not happy with my changes, let me know so that we work it out.
This highlights a common tactic used by experienced procurement negotiators. They know many people are sticklers about following rules. So they will make up official sounding pronouncements and insist that “this is the way it is done” or “you are not allowed to do that”. If someone tries to box you by adding rules to the deal, ask them to provide proof that such rules really exist. You need to be knowledgeable of such rules to prove otherwise.
Never be the first person to name a figure
This is an expensive lesson to have to learn, but a good one. I do a lot of contract work, and one of the first questions I am usually asked is “What is your budget for this service?” This is a high pressure question, and some procurement professionals often find themselves blurting out a figure that was lower than what they really wanted or higher than the budget. By this, suppliers and or service providers get surprised to discover you are offering them a better deal than they thought.
Let them believe the final decision does not rest with you
Once a negotiation starts, most people want to get it over with as quickly as possible. Let their impatience beat them. One great way of doing this is to let them believe the person they are negotiating with is not actually you, but some other “authority figure”.
Say something like “Well, I will have to talk it over with my boss before I can give you a definite yes”.
A skilled negotiator will always want to talk to the person who has the final decision, but do not let them do it. Say the person with the authority over the deal wants you to sort things out but still needs to have the final say. Tell them you will discuss it and get back with an answer tomorrow. Ask them to make sure that is their best offer you can take to your “authority figure”. This is also a great strategy for preventing people rushing you.
Do not act too interested
Just giving the impression that you are willing to walk away can do wonders for getting a better deal. Always play the reluctant buyer.
Do not leave the other person feeling as if they have been cheated
Many people try to screw every last drop of blood from any negotiation. This is a mistake. If the other person feels they have been cheated, it could come back to haunt you. They may not fulfill their part of the deal, or refuse to deal with you in the future. And hardly can they fulfill their contractual obligations. A lot of excuses and delays will surface.
Most negotiations should leave both parties feeling satisfied with the outcome. Be willing to give up things that do not really matter to you in order to create a feeling of goodwill.
For example, if I am renegotiating on behalf of my institution, I often promise future opportunities ahead. That way, automatically hope for the future takes control (Mathew 15:28)
The author is Procurement Specialist