How To Improve Your Negotiating Skill

Tips, guidelines, techniques and practices to help you improve your negotiating skills.

I learned how to negotiate the hard way.One day fifteen years ago, I was a Design Engineer whose project had come to an abrupt end.The next day (literally) our Purchasing Manager resigned and I was offered his position.I resisted, stating the obvious, "I am an Engineer not a Buyer." I was also young, recently married and broke. So when the company president offered me a 20% pay increase, I took the job.Okay then, I was a Buyer after all. The Purchasing Manager took me aside for what passed as training."Those are my files, and here is a list of our suppliers," he said as he bolted out the door.So much for the training.I scan the list of suppliers and began to call them to get acquainted. Before long I started to get the hang of the job.Yet, not only did I get the hang of it, I began to excel at it.Along the way I learned to become a fierce negotiator.The following are some of the most important things I've learned about the art of negotiating.

Home Field Advantage:

One thing that I learned right away was to negotiate on my home turf.When I took over as Purchasing Manager I inherited a spacious office and a lobby that served as a waiting room.The lobby provided a place for suppliers to wait and occasionally run into their competitors.This threat of immediate competition gave me a tremendous mental edge. As suppliers ran into one another in the lobby they became eager to drop down to their best offer.The large office gave me an air of importance and helped propel the notion that I was the ultimate decision maker in the process.The buck stopped there, so it was best to come prepared.

Do your Homework:

Though I was new to Purchasing, I had a technical background that I used to quickly gain knowledge of what I was buying.At times I would get one of the suppliers to educate me on their product and then used the information to ask specific questions on the products of another supplier. Aside from that, I did my homework on whatever sales person stepped before me.Once, while being introduced to a new Regional Sales Manager, I opened the conversation with a few facts that I had learned about him.He marveled at how I could possible know things about him so far in advance. For the rest of the negotiation his mind was elsewhere.I could see the wheels turning inside his head."If this guy knows this much about me, what else does he know?" is what I am sure he must have been thinking.

The Element of Surprise:

Along with doing my homework, I became rather good at surprising my suppliers in the mist of a negotiation.Whatever leverage I could gain by taking a supplier by complete surprise, yielded extremely useful information that I could use later on. Normally, when I surprise a supplier during a negotiation, I tend to get answers that are generally closer to the truth.During such moments, product defects are brought up along with their company's recent sale's strategies or biggest competitive fears.I found there is little substitute for the element of surprise.

Elements of a "Win-Win" Relationship:

Probably the most misused or misunderstood concept of a negotiation is the concept of achieving a "win-win" situation.By its very definition a negotiation is a contest to be won.Those who feel otherwise are lying to themselves.That does not mean you do not find ways for the other person to save face, feel good about the results, or help them succeed in other ways.For example, sometimes when I have pushed hard for, and received a major concession, I have gone out of my way to round up new areas of business for that particular supplier.There are other times when I make changes in my busy schedule to accommodate a visit from a particular sales person and one of his Regional Managers or Vice Presidents.So, what I am saying about achieving a "win-win" situation is, strive to win the negotiation, but try to achieve an overall "win-win" relationship.

It Never Hurts to Ask

Never be afraid to ask for concessions during a negotiation.Ask for the world! You might just get it. Don't ever assume that the other person won't concede a point in the negotiation.The concession might be an easy one to make on their behalf, but you will not know until you ask.I have a reputation of asking for the world.Most suppliers that deal with me know that I will ask for everything right off the bat.Will I get it all? No. But it's my starting point.Everything else from that point on is a concession on my part and I let them know it.That way, even if they win half the battles they will still be only as far as the half way mark.

Plan B:

I seldom let myself enter a negotiation where I do not have the option to walk away from the deal.I usually try to have as many options as possible in case the negotiation starts to become unfavorable.Without the ability to walk away from the table, you may be at the mercy of the person you are negotiating against. In the rare times that I can not find a suitable back up plan, I have been known to bluff as best as I can.I never, but ever let them know that I do not have another option.

Having said all that, it's wise to remember that all negotiations are different.Each negotiation will have different variables.Some of these variables might include budgets, time constraints, manpower requirements, personalities, and competition.While I generally try to follow my own guidelines, I am not above changing tactics when the need arises.Flexibility after all, is but another tool for your negotiation bag of tricks.

Trending Now

© Demand Media 2011