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Thread: Negotiation skills

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    Diamond Member Blurock's Avatar
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    Negotiation skills

    Just remember the first rule of negotiation. "Never make a price/offer first" He who does that, lose! Get them to tell you what they think it is worth, keeping in mind they will always quote less. Then decide on a strategy.

    PS. The professional trainers on negotiation skills has a very nifty game they play with their students, demonstrating that he who quote first, lose. It involves selling a car. To the seller they give a set of info, basically coming down to it is an old car, not worth much to the owner and he just want to get rid of it asap. Some low pricing is given as expectation. The buyer on the other hand is given info that he is acting on behalf of a collector, who happens to know the car is worth a lot. Also, some guidelines on price is given. So you have two parties, miles apart. You can imagine what will happen when negotiations start. The party who quote first, will lose.
    Is this not one of the reasons (there are many) why South Africans make such poor negotiators in the world arena?

    When you negotiating, one should aim for a win-win situation and not try to screw the opponent. Negotiations are based on trust, not who wins. Once the other party feels cheated, they will never trust you in negotiations ever again.
    Excellence is not a skill; its an attitude...

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    tec0 (22-Jul-12)

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    Silver Member league_of_ordinary_men's Avatar
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    Quote Originally Posted by Blurock View Post
    Is this not one of the reasons (there are many) why South Africans make such poor negotiators in the world arena?

    When you negotiating, one should aim for a win-win situation and not try to screw the opponent. Negotiations are based on trust, not who wins. Once the other party feels cheated, they will never trust you in negotiations ever again.
    That is what I think as well,that both party's should aim for a win-win and have a policy of you don't screw us we don't screw you.

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    Gold Member IMHO's Avatar
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    Blurock, it seems you did not get the 'worse case' scenario, that I specified when saying both parties walk away. Worst case means that is the worst that can happen. Of coarse win, win is what is strived for. But very seldom 100% achieved.

    Take the car negotiation as example. The negotiator for the seller has a brief that R8000 is expected. The negotiator for the buyer has a budget of R100 000 and he can stretch it a little bit if necessary. What is win, win and how will it ever be achieved? Remember, the one is not aware of what the others brief is. Even the if the seller opens with a ridiculous offer of R20 000. The buyer is just going to say thank you very much and walk away with the deal of a lifetime. A week later the seller finds out the real worth of the car and feel cheated. So, is this win, win?

    I am not a negotiator and do not want to defend the morals of any strategy. I just shared what I was taught a very long time ago. I can not even remember the other tricks of the trade. Maybe someone can come refresh us on the latest methods, so we at least stand a chance to get close to win, win.

    This thread is the ideal place to do so!
    ~Expenses will eat you alive! - My first Boss~

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    Diamond Member Blurock's Avatar
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    Negotiation is often about compromise. Its like going on your first date and expecting a kiss, but having to settle for holding hands. There is however the prospect of a kiss on the next date.

    My experience is that the best prepared and best informed are more likely to come out tops in negotiations.

    In your example the seller does what is expected of sellers; he makes a ridiculous offer of R20,000. The buyer is prepared to pay the asking price and is happy with the deal. The seller has not done any research or tested the market. He therefore thinks that the buyer is mad to accept the deal and is happy to sell.

    Although there was no negotiation, both parties were happy with the deal. The seller received more than double what he aimed for and the buyer got the deal of a lifetime. So a win - win situation was achieved. Any regrets by the seller is due to his own incompetency and can not be blamed on the buyer.
    Excellence is not a skill; its an attitude...

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    Gold Member IMHO's Avatar
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    Quote Originally Posted by Blurock View Post
    Any regrets by the seller is due to his own incompetency and can not be blamed on the buyer.
    Correct, no argument there. One should always do your homework and know your field. That is of cardinal importance.

    But now one also need to hone your skills, to limit your losses in a case where you simply could not have known. That is why 'get the other guy to make an offer first' is so handy. It is of no use against a pro or someone better prepared than you, but at least a beginning. Use it if you can. But be warned, the guy better prepared than you, will be able to use it against you.

    Do we have negotiation experts reading here? Care to give us a few pointers? Trade secrets, I suppose...

    Other things that I have learned over the years, is to know a good deal when you see one. With that I mean, do not try to wring blood from a stone. Know when to stop.

    Body language is also a great skill in negotiations. A professional negotiator will read you like a book and know if you try to roll the wool over his eyes. That is a completely different field, but goes very much hand in hand with negotiating.
    ~Expenses will eat you alive! - My first Boss~

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    Diamond Member Blurock's Avatar
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    I believe that every entrepreneur should do a course in negotiation skills. There are advanced courses available (at a cost), but one should do at least a basic course and then continue to hone your skills.

    We negotiate consciously or subconsciously every day. We negotiate leases, sales and purchases. We negotiate with staff, unions, utilities and even family members.

    In every day situations you may not have the time to prepare extensively. Try to first find common ground and then Trade and Compromise to reach an acceptable outcome. E.g We are both hungry, if I cook, will you do the dishes? Or, are you going to cook today and I will cook tomorrow?
    Excellence is not a skill; its an attitude...

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    tec0 (22-Jul-12)

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    Diamond Member tec0's Avatar
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    When I was still involved in big business some time ago I used to be ruthless. Sad part was, I was very good at my job. We always got the contracts always made the sales and hit max profit on each deal.

    Our suppliers had to come to the table with the best offers they could and even then I manage to get that little extra. Needless to say the game became all too easy. All you need is confidence and know the product inside and out. Impressing your customer is one thing but to give them the wow factor made them more willing to sign a contact.

    Fact is we were never the cheapest option on the table. All you need to do is to give your customer the confidence to pay more and feel good about it. Then give them that quality handshake and they will come back.

    Making an offer is not a sign of weakness it shows that you did your homework and you know the market.

    That said above all else know your limitations don’t show your limitations.
    peace is a state of mind
    Disclaimer: everything written by me can be considered as fictional.

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    Diamond Member Blurock's Avatar
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    Quote Originally Posted by IMHO View Post

    Body language is also a great skill in negotiations. A professional negotiator will read you like a book and know if you try to roll the wool over his eyes. That is a completely different field, but goes very much hand in hand with negotiating.
    Very true. Negotiation is also about interpersonal skills. Its a proven fact that "mirror actions" and positive vocal affirmation would make it easier to clinch a deal.
    Excellence is not a skill; its an attitude...

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    Diamond Member adrianh's Avatar
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    You need to play a lot of poker. Learn to read people, when to hold and when to fold. Each person negotiate for the best position for themselves, they sometimes, bluff, lie and cheat to do so, and we do too (come on, we all embellish a bit here and there). The trick is to know how far you can push it. Negotiating is not about win-win, it is about maximizing your position whilst convincing the other guy that he has maximised his position. When you buy a secondhand car you couldn't care less about the sellers position, you want to pay the lowest price. When you deal with an employee you hold out a carrot that is never as big is the income that that person would create, when you negotiate with a child you make the child believe that they want to do what you want them to do.

    We need to cut the crap, business is about making money. We all negotiate to win. We endevour to minimize our risk and give up as little as possible. If you have no risk of dealing with the other party ever again then you negotiate for maximum reward. If you risk working with the other person again then you make sure that they feel comfortable in their position.

    Mirror actions can be a lot of fun if you are aware of the trick. I have a friend who mirrors all my actions. We are good friends and I can say that we really enjoy each others company. I am acutely aware that he does it and I make strange gestures just to see whether he would follow. I haven't got him to simultaneously scratch his nuts yet but I am working on it.
    How easily someone is offended is directly proportional to how stupid they are.
    ~GS Elevator

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    Gold Member IMHO's Avatar
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    Quote Originally Posted by adrianh View Post
    I have a friend who mirrors all my actions. We are good friends and I can say that we really enjoy each others company. I am acutely aware that he does it and I make strange gestures just to see whether he would follow. I haven't got him to simultaneously scratch his nuts yet but I am working on it.
    hehe. Is he aware of it?
    ~Expenses will eat you alive! - My first Boss~

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