Negotiation Skills

Negotiation Skills • Presented By: PAUL DAVIS © Sigma Management Development Ltd 2004

Negotiating Techniques • IF you give me a bit of what I want THEN I can give you a bit of what you want • Always trade values (£) • Never trade a value without getting one in return TO YOU TO THEM GIVE Low Value/ Cost (easy to give) High Value (worth a lot) GIVE Low Value/Cost High Value

The Negotiation Framework WIN-WIN COMMIT COUNTER OFFER OFFER BARGAIN BARGAIN PROPOSE PROPOSE DISCUSS DISCUSS PREPARE PREPARE REQUIREMENTS “SELLER” “BUYER” RESEARCH

Characteristics Of A Skilled Negotiator • Preparation and planning skills • Knowledge of subject matter being negotiated • Ability to think clearly and rapidly under pressure and uncertainty • Listening skills • Judgement and general intelligence • Integrity • Ability to persuade others • Patience

Research • Company, Competition, Likely Requirements • Decision makers & Influencers • The Politics & Barriers • The Personalities • People Behaviours • Buying Motives ALWAYS BE PREPARED

Prepare Variables • VARIABLEMAX £ MIN £ • EQUIPMENT • SERVICE • DELIVERY • TERMS • TOTAL PACKAGE £ MAX MIN

Negotiation Variables Grade your variables High - Important to you to obtain - Potential “walk-aways” Medium - More of these - Hope to achieve the top end of your entry point Low - Willing to trade near to your exit points - Not a give away NB: then view them from the other party’s perception

The Negotiators Exit Prices Overlap 100 110 120 Buyer’s negotiating range Settlement range Seller’s negotiating range 110 130

The Negotiators’ Exit Prices Meet Buyer Seller 100 120 130

Emotional Buying Motives EMOTIONAL LOGICAL Usage Specification Functionality Value Efficiency Performance Safety Flexibility Quality Price Personality Prestige Fear Novelty Tradition Price Status Promotion Good Rapport Brand NEEDS WANTS

Propose AIM HIGH Your proposal is your maximum opening stance

Discuss IF……. THEN OFFER….. COUNTER OFFER

Components of a Proposal Components of a proposal Condition Offer Non-specific Specific Non-specific

Distinction Between Proposals and Bargains

Constructive Debate • Statement • Assurance • Question • Summarise • Demonstrate Listening

Examples Of Destructive Debate Styles • Threat • Attack • Blame • Point Score • Interrupt/block • Assume • Irritate

Signals • “It would be extremely difficult to meet that delivery date” • “We would not normally extend our credit facility” • “It is highly unlikely that my boss will agree to a free upgrade” • “As things stand our prices must remain as listed” • “I can’t give you a better discount on your current volumes”

Proposals Use of Brevity • It might be possible to do something • We could perhaps look at that Key Message Verbage detracts from the message, and often gives your opponent the view you are in a a weak or uncomfortable position

Do Can Could Would May Will Shall Should Is Does Might Did Have Has Structured Questions Ask open questions & listen CLOSED OPEN ? ? What Who When Why Where How To What Extent To What Degree How Important

QUALIFY ASK 1ST OPEN QUESTION LISTEN TO IMPLICATION IN ANSWER BASE NEXT QUESTION ON ANSWER TO FIRST LISTEN REPEAT HIT HOT SPOT UNTIL NOT IMPORTANT

The Art of Listening • The person speaking is not necessarily the person in control • Listening/talking is the bilateral process • Listening includes watching Impediments to Overcome • Resistance to change • Thinking one’s own thoughts instead of listening • Wishful hearing • Making unwarranted assumptions • Habitual secretiveness

BIAS ASSUMPTION EMOTIONS LISTEN ASSIMILATE REHEARSE REPLY REPLY TALKING

Summarising • Summarise throughout (every three minutes) • Use their language not yours • Seek agreement and clarification • Test any assumption

FIGHTER LEADER THINKER HELPER BEHAVIOURS • DOMINANT HOSTILE WARM SUBMISSIVE

ABOUT YOUR CUSTOMERS • DOMINANT HOSTILE WARM SUBMISSIVE Arrogant Aggressive Ruthless Dictatorial Opportunistic Conceited Impulsive Doesn’t allow mistakes LEADER FIGHTER Fair minded Firm Decisive Motivational Optimistic Open Sees others’ points of view Allows 1 or 2 mistakes Gullible Deferential Self-effacing Passive Submissive Ineffective Manipulative Weak Negative Pedantic Bureaucratic Cautious Nit-picking Cold Defensive Blocking HELPER LOGICAL THINKER

PEOPLE BEHAVIOUR and how to deal withthem • DOMINANT HOSTILE WARM SUBMISSIVE Remain calm Be assertive Ask open questions Pace up Be well prepared Be well prepared Mirror behaviour Be directive Keep focused on the topic Ask closed questions Put agreements in writing Check progress Check reality of commitments Pace down Ask open questions Involve Be patient Don’t “sell”

Rapport Building GET ON THEIR WAVELENGTH • Big Picture Or Detailed • Lots of Options Or Follow Procedures • Informal Or Formal • Free Wheeling Or Take Control DON’T TREAD ON TOES OF BELIEFS • Politics • View of the World • Behaviours

Rapport Building FIND THEIR HOT BUTTONS • What’s important to you? • What do you want from…..? SPEAK THEIR LANGUAGE • Speed • Volume • Inflection • Use their words

BODY LANGUAGE IN NEGOTIATIONS • Quotation from Sir John Collins, Dixons Chairman: “I would never have a serious discussion or negotiation without seeing somebody because the body language is every bit as important as what you are saying to me” Times Interview September 2002.

7% Verbal 15% Dramatised Verbal Visual 25% Verbal & Visual 45% Body Language COMMUNICATIONS 10% 20% 30% 40% 50% Retention

BODY LANGUAGE • 50-70% OF OUR COMMUNICATION IS NON-VERBAL • READ IT…..USE IT! • LOOK FOR CLUSTERS • LOOK FOR CONGRUENCY OR NON-CONGRUENCY

ROOM LAYOUT • DESKS? • CHAIRS • POSITIONS OF POWER? • COMFORT ZONE/BODY SPACE • LOCATION?

Negotiation Tactics & Styles Key Message A TACTIC RECOGNISED IS A TACTIC DISARMED

Styles of Negotiation • ‘Tough-guy/Soft Guy’ duo who alternates between aggression and kindness to tempt the negotiator into dealing with the, ostensibly, softer guy. • Over-valuing a feature of the deal - it could be future profits, for instance - and using this to claim a higher price for themselves. • Setting pre-conditions for negotiation so as to gain ground before the actual negotiations being - managements, for instance, demand that a strike cease before they will negotiate, governments demand a return to the status quo before they will negotiate a disputed event (seizure of territory etc).

Styles of Negotiation • High initial demands to push the area of settlement towards themselves and to shock the other negotiator into reassessing his expectations. • Making threats (veiled or blunt) to coerce the other negotiator into movement - sales people often warn that unless the order is filled today they cannot guarantee supply; union officials often tell management that they must meet the union demands or face the prospect of a long strike. • Setting pre-emptory deadlines that they know can hardly be met in order to hustle the other negotiator into quick decisions, or, sometimes ominously, to provoke themselves into a preferred choice of action - ‘unless you withdraw your forces by 11 a.m. today, a state of war will exist between us’.

Negotiating Rules • Check your variables • Aim high • Give way slowly • Never give a concession without one in return • Listen, don’t talk

Negotiating Rules • Use structured questions • Never trust your assumptions • Use power gently • Confirm the agreement • Achieve win-win THERE IS ALWAYS ANOTHER DAY

SPECIALISTS IN PARTNERING AND SUPPLY CHAIN RELATIONSHIPS

Negotiation Skills