There is one central idea, one important concept that is very important to understand.
If you have this right, you will be compensated with profitable, gratifying and long term business relationships in which price is not the only element. If you don't have this right, you will struggle with sub optimal business relationships and you will likely end up haggling about price in probably all of your negotiations.
The key element is understanding the interests of the other side in your negotiations; this is an important element taught in negotiation training.
Generally we have a good awareness of our own objectives, needs and desires. When we negotiate with others, we typically begin with trying to convince them to see the world the way that we do. We think it makes sense to us, surely it must make sense to anyone that is reasonable. The problem with this approach is that it completely disregards the objectives, needs and desires of the other side.
What will it achieve trying to persuade someone to do something that they don't trust would be in alignment with their objectives, beliefs and wishes?
You will not under any circumstances persuade someone to agree with you by disagreeing with them, quite the reverse will happen. Because you tell someone that they are wrong and you are the one that is right, you will compel them to defend their position rather than agreeing with you. Nobody likes to be wrong and if you express to them that they are wrong it will become very important for them to defend their position because their personal credibility is at risk.
It is rare to achieve agreement with anyone after you have told them that they are incorrect, you have also managed to paint yourself into a corner. If it was key for you to reach agreement and you loose the argument, then you will have to sacrifice your own credibility by departing from your 'correct' stance to accept the argument of the other side.
If you want to reach agreement the easy way rather than have your negotiations escalate into a positional argument, here's my suggestion:
Start by making some enquiries, the best of which you can ask will be questions designed to expose the interests behind the positions that the other side have assumed in the negotiation. Open questions are the best kind of questions to expose the interest or motivators that support your counterpart's positions.
Here's a great question you can ask and at the same time endorsing your negotiation skills: Why are you negotiating with me / my organisation?
This is very probably the best question to ask at the start of a negotiation. Follow this question by asking your counterpart to expand on and to rank the reasons offered in response to your questions. This will give you a prioritised list of their most important interests.
Sample Interests:
- Individual: Security, Acknowledgment and Control
- Organisation: Profit, Risk Avoidance and Strategic Fit (Some important factors you would have learned in purchasing training)
Once you have an awareness of your counterparts' key interests it is a good idea to reveal your own interests. Once all the parties to the negotiation have disclosed their interests it will be much easier to recognise the areas of common ground and then it is useful to present your argument in the context of how it would serve their interests. This way, you will not have to persuade the other side that your argument is correct; you will only have to show that your suggested course of action would meet their interests.
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