NEGOTIATION SKILLS

Negotiation and Closing Skills Profile of a Negotiator The Win-win Strategy The importance of Knowledge Basic Tactics Strategies for Negotiating

John Muya
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Exam Question
It is often said that negotiation starts at the point where sales end. Describe the process of negotiation demonstrating its vital role in relationship building with the customers (20 Marks)

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What is Negotiation?
Negotiation can be described as discussion held with the aim of finding terms of agreement. When conflicts or unresolved issues exist between two or more individuals or organizations the parties agree to negotiate in order to resolve matters.

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Business Negotiation

In negotiated exchange the price and other terms are set through bargaining behaviour in which two or more parties negotiate long term binding agreements.

Other Negotiations Contract completion time Quality of goods & services Purchase volumes Responsibility of financing Product safety Credit terms Trade-in values Delivery times

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Negotiation Strategies
Separate the people from the problem: Whereas each party must understand the other sides viewpoint and level of emotions the focus should be on the parties interests not on their personal differences. Focus on interests not positions: Focusing on interests rather than positions, facilitates likelihood of a mutually agreeable means of achieving common interests. Invent options for mutual gain: Look for a larger pie to identify shared interests. Insist on objective criteria: independent of either sides position. Hence one side must not yield to the position of the other..
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Negotiation Process
Prepare: Know what you want. Understand them. Open : Put your case. Hear theirs. Argue : Support your case. Expose theirs. Explore : Seek understanding and possibility. Signal : Indicate your readiness to work together. Package : Assemble potential trades. Close : Reach final agreement. Sustain : Make sure what is agreed happens.

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When to negotiate
When many factors bear not only on price, but also on quality or service. When business risks cannot accurately be predetermined. Hence the need to reduce these risks. When a long period of time is required to produce the items required or purchased, (so that we do not keep on changing the order conditions now and then) When production is interrupted frequently because of numerous change orders. Conflict of interest
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Negotiation Skills
Preparation and planning skills Knowledge of the subject matter being negotiated Ability to think clearly and rapidly under pressure and uncertainty Ability to express thoughts verbally Listening skills Judgment and general intelligence Ability to persuade others PatienceAssertiveness- Taking care own interests while maintaining respect for the interests of others. . Unassuming-Never taking things at face value. Self reliant ( thinking for oneself) Evict emotional arguments without anger. Balanced strategist
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Characteristics of Negotiation
Mutual interest: Recognition by both parties of degree of mutual dependence to achieve objectives Time, Effort and Cost: Negotiation usually involves significant time, effort and cost for both parties. considerable planning and preparation is required. Conflicts : Negotiations between two or more parties suggests intention of successful conclusion of a deal. It also suggests, resistance of points of conflict or disagreement between them. Relationships: Negotiations take place against a background in which one or both parties regard an ongoing relationship with the other of being as important as the deal. Win-Lose bargaining: This is where one party to the arrangement gains and the other loses. Win-win situation: Both parties gain. This could happen between an organization and the suppliers.
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1. Listener.
Negotiators are detectives. They ask probing questions and then shut up. We are so busy making sure that people hear what we have to say that we forget to listen. Follow the. 70/30 Rule -- listen 70% of the time, and talk only 30% of the time. Encourage the other negotiator to talk by asking lots of open-ended questions -questions that can't be answered with a simple "yes" or "no."

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2. Knowledge
Gather as much pertinent information prior to the negotiation.

What are their needs? What pressures do they feel? What options do they have? Doing your homework is vital to successful negotiation.

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3. Aim high
People who aim higher do better. If you expect more, you'll get more. Successful negotiators are optimists. A proven strategy for achieving higher results is opening with an extreme position. Sellers should ask for more than they expect to receive, and buyers should offer less than they are prepared to pay.

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4. Be patient
Whoever is more flexible about time has the advantage.

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5 Satisfaction Focus
Help the other negotiator feel satisfied. Satisfaction means that their basic interests have been fulfilled

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7 Avoid Making first move

The best way to find out if the other negotiator's aspirations are low is to induce them to open first. They may ask for less than you think. If you open first, you may give away more than is necessary.

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8 Don't accept the first offer

If you do, the other negotiator will think they could have done better. (It was too easy.) They will be more satisfied if you reject the first offer -- because when you eventually say "yes," they will conclude that they have pushed you to your limit.

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9 Don't Make Unilateral Concessions.

Whenever you give something away, get something in return. Always tie a string: "I'll do this if you do that." Otherwise you are inviting the other negotiator to ask you for more.

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10 Always be willing to walk away!

Never negotiate without options. If you depend too much on the positive outcome of a negotiation, you lose your ability to say "no."

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Negotiation Tracts
Connecting : To establish a personal bond with the prospect Encouraging : To involve the prospect in the process Establish threshold positions

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Acting crazy: A good show by visibly demonstrating your emotional commitment to your position increases your credibility and may give the opponent a justification to settle on your terms. Big pot: Start with high demands to Leave yourself a lot of space for concessions, so as to end up with a larger pay-off than if you started low. The well is dry: Take a stand and tell the opponent you have no more concessions to make. Divide and conquer: When negotiating with the opponents team, sell one member of the team your proposals. splitting the difference: The person who first suggests this has the least to lose. Surprises: Keep the opponent off balance by a drastic, dramatic, sudden shift in your tactics. - Keep the opponent from anticipating your moves. Trial balloon: Release your possible/contemplated decision through a so-called reliable source before the decision is actually made. This enables you to test reactions to your decision.
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Classic bargaining techniques

The Ultimate Negotiation

Negotiation should not be:
Selling any new benefits An attempt to sell on price The process of discounting until we hit the right price A place to raise new issues and concerns

Negotiation should be:

The process of setting terms for desired service/product Achieving an agreement that is satisfactory towards both parties Conducted in a manner that leaves both parties wishing to do business together again
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Whatever the Outcome be courteous

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TO THE END

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