In an ideal world when negotiating both parties would win. Not only would you get the deal that you wanted but also you would build better relationships.
In this article we consider the neuroscience of negotiation.
What goes wrong at negotiations ?
- They never get started
- There’s a lack of sincerity between the parties
- Emotions become a key component compared to Logic
- Emotion often accounts for 80% of the decision
- Facts and Information must be right or that’s an immediate deal breaker
Additional negotiation issues
- Previous bad history ( memory / habit)
- Not actively listening
- Time pressures
- Not understanding ( see point above not listening)
The Importance of Emotions
The brain works by expectation not actuality. So what are emotions for – in a very simplistic “cave person” scenario they are there to keep us safe
- 96% non conscious – survival / fast / actionable/ gut feel
- 4% conscious – thinking / slow analytical / Note these are very energy hungry to perform
The fundamental organising principle is to minimise danger and maximise reward
The Negotiation Funnel
- Under pressure the thinking brain shuts down so as in all cases proper preparation prevents p#@s poor performance
- Make sure you are clear in your objectives both short term and long term. Winning short term my have significant impacts in the future
- Discover the common ground
- Pre meeting has been shown to increase the chance of success by as much as 50%. Linked in or Facebook might provide these pre meet / virtual introductions
- Establish your tradeables ( whats of high value to you but lower value to them)
- What does the other party want? This is where active listening and questioning come into play
- Build rapport – reward versus threat
- Be very careful about what you promise. Sometimes in the “excitement” of negotiation we can over promise which may have significant implications post meeting
- Listen for signals and movement / changes in their stance
- Look for Win / Win situations and getting to an agreement. Roger Fisher & William Ury wrote a classic book in the early 1980’s Getting To Yes which is still a valid read
- Test the tradeables, try scenarios “if you could buy xxxxx then I could i consider offering yyyyyy”
- At this stage don’t disclose the numbers, that way you can retain flexibility and avoid any false expectations.
- Additionally at this stage don’t give firm commitments provide a range
- At this stage of the negotiations this is where you start to quantify discussions “If you could buy 300 units in one delivery then I could consider a 5% discount”
- This allows for counter offers – the approach “Dont Use Round Numbers” can help increase credibility of an offer
- The negotiation is the opportunity to squeeze all parameters – remember get something back for anything you give / concede
- There are lots of approaches to closing in negotiations. My one main observation is to be aware of “Nibbling”
- So you think you have concluded and agreed what is happening but there is still ” So you will include ..” taking place
For more Business Development articles click here to contact Andrew Goode click here
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