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Top 5 negotiation tips -- they will make you richer and less frustrated!

Some people think that negotiation cannot be learned. Good news: that's completely wrong. I have been trained to negotiate as part of my job and I negotiate BIG deals (the biggest involve 100 millions of USD). Here are the top 5 things you should know to improve your negotiation skills:

  1. Prepare, prepare, prepare.

    • A negotiation is not so much about what you demand. It's about how the other party will react. To forecast this, you need to understand their interests, what do they win / lose with the deal. You also need to listen more than you talk.
      Lee's Battle Plan
      Lee's Battle Plan (Photo credit: American College of History and Legal Studies)
    • Prepare scenarios: if they answer this way, I'll answer this way. The simplest form of scenario is to set limits: this is what I hope, this is what I'll demand, this is what I'll refuse.
    • Example -- if you buy a unique t-shirt : 
      • I hope to buy it for 15$. 
      • I'll ask it for 10$ first. If they answer with an offer below 20$ I'll buyt it. Otherwise, I'll say: OK, here I have only 19$ in my pockets and I have seen another nice t shirt from the competitor for 5$,  is it Ok ?
      • If it is not OK, I won't buy the t-shirt

  1. Understand the balance of power

      Specialist: Negotiator
    • You must have a clear idea of your power vs the one of your interlocutor. Imagine that you get caught by a cop because you did not respect a red traffic signal. You tell her, "what's your name ? Pay attention, if you give me a fine, you'll have to bear the consequences". What do you think will happen ? Most probably the cop will give you a bigger fine! This example illustrates the need to adapt your negotiation approach to the balance of power: use the power that you have but do not bluff. 
    •  You must seek to increase your negotiation power before and during the negotiation. Classical ways to gain powers are to:
      1. Create alternatives to an agreement
      2. Obtain internal support in particular from big bosses to use the argument of authority
      3. Bind other stakes to the negotiation

  1. Make the first offer

    • Many people say that in job interviews the candidate should not speak first for the salary negotiations. I disagree: you should state your position first to set the referential for further discussions. Open the negotiations with a reasonable figure that is as high as possible. 
    • Start

  • Example: if you currently earn 100k$, ask 135k$. That's a 35% increase which is very high for a job switch. But it is not ridiculously high.

    1. Do not self-censor when you state your position

      • You should accept that the other party could refuse your demand. And you should not self-censor about your demands. Everything is negotiable.
        • Smiley from the sMirC-series. shy
        • An example: you like a second hand bike, priced 200$, for your kid. But your also really think that it's not worth more than 40$ based on your knowledge of the market. In such situation, most people would think, without necessarily being aware of that, "I cannot propose such as low figure, even if it is what I want. Let's ask for 100$ instead.". The point is: if you start with an offer around 100$ you will never go below 100$. So, the negotiation does not make any sense, as it is cursed to end in a situation where you cannot have a satisfying agreement.
        • Of course, if your demand is tough, you must support it with good arguments to avoid the discussion to become emotional. In our example of a bike, you should 
          • point out the weaknesses of the product (it's rusty, my son will use it only for a few month and he will be to big),
          • point out the references for a fair price (have a look to these three classified: they all propose a similar product, in the 20-50$ range, walmart sells brand new bikes for 10^0$)

    If you master the four elements above, you are already a good negotiator. The fifth technique is more difficult: it's to adapt your speech to the personality and profile of the interlocutor.

    1. Identify the personality of the other party

      • Empathy works well with collaborative personalities and non trained negotiators. Playing on empathy involves explaining your personal constraints and why they lead you to make a low offer.
      • Empathy does no work well with trained negotiators and professional salesmen. They do not care about your problems. With them, you need to have an "exit strategy", meaning an alternative that they cannot prevent you to use and that they do not want you to use. 
        • FUCK
        • A real life example: I went to a pharmacy to buy medicine I needed for my son, for the duration of a 1-month family stay abroad. Even after I explained my situation, the pharmacist told me "No, I do not have the right to give you that amount of medicine". She did not care at all about my personal constraints. So I had to explain her what she would lose in the absence of a deal. I told her "OK, it's not a problem I will buy everything from another pharma
          cy in the neighborhood. As I have several prescriptions from the doctor for that medicine there won't be any problem". Then, she hurried up to tell me that Ok, she would provide the medicine...
    Finally, here is a quick list of the things you will learn when you start negotiating more on a day to day basis
    1. Do not get stuck arguing. State your position. If the opponent attacks you too much, just say "I will not spend more time explaining the reasons that led me to my position: it is my position and I expect an answer based on it". 
    2. Ensure that your proposal is cristal clear. Naive / beginner negotiators often try to hide the reality of their proposal. Do not take your interlocutor for an idiot: she will figure out! Save time and establish trust by showing the stakes and backing your demands with good arguments. If they do not understand what you want, there is no chance that they will grant it.
    3. Share information on a "need to know" basis. If they do not need to know something, do not share it. In particular, do not share excel documents with all your calculations. You can rather provide a presentation with the key conclusions.
    4. Always check twice any email you send. In outlook I deactivate the automatic sending of emails: when I click send, they stay in the send folder until I click on send all messages. This simple safety permits me to correct any mistake before the email is actually sent.
    5. Have time in mind!! Your strategy should plan for events at specific moments into account. Otherwise, the other party can play the clock and you will not reach an agreement!
      • Examples: 
        • 10' before the end of the meeting, I will propose 100 take it or leave it.
        • After 1 month, I will escalate
        • After 10 minutes, if they have not answered clearly, I will leave the room.
        • ... 
    6. If you ask for much, prepare the escalation in advance. The other party cannot accept a big demand without agreement from their boss. So, they will come with the big boss and if you are not prepared you will be confronted to the argument of authority and in a bad position. When you ask for much, you must put your boss in the loop and guarantee that he can attend the meetings when things will escalate. If your do not do that, as your boss is a busy person, she will not be able to attend the meetings and it will weaken your position.
    Enjoy American cash... (Credit: Wikipedia)


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