Industry Crunch: Using Your Negotiation Skills To Negotiate For Security
One can sense a great deal of uncertainty in the world financial markets wherever you go - for the first time - regardless of geographical location.
Warren Buffet stated that it is only when the tide goes out that one can see who is wearing no swimsuit. In other words, it is easy to be prosperous when the markets are doing well; it is only in tough times that we can easily distinguish quality & commitment.
How can you use your negotiation skills, negotiation training or purchasing training to avoid losses in the present economic situation?
Use 'Loss Framing'
We are more interested by avoiding loss than by attaining the very same gain. Kahneman & Tversky's Prospect Theory work describes how people will become risk seeking in an attempt to avoid a loss whilst they are more likely to be risk averse when seeking benefits. In the way that we negotiate, we can make the other side aware of the items that they stand to lose if they don't move in our direction and otherwise gain if they do.
Create Alternatives
In times of difficulty it is vital to look at other options so as to support our negotiation position. The ability to create options is vital in the context of negotiation and the strength of options to concluding a transaction is the key driver of our negotiation power.
Usually we wait until we realise that we are not going to make a deal before we begin to think about alternatives. We risk entering into unfavourable transaction and if we have not studied all the options. Similarly, thinking about the options available to the other side in the negotiation will give you a clear view of their relative position of strength in the negotiation. If they have good options available then they will be more aggressive and if they don't, they will tend to be more accommodating.
Use Reciprocation
Reciprocation is a key principle of powerful persuasion skills, because we are prone to return to others the form of behaviour that they demonstrate towards us. In times of economic uncertainty it is key that we perform in the interests of our counterparties if we would like them to perform in our best interests. Use this principle to your benefit by acting first and using the principle of reciprocation. Be careful and ensure that you register the obligation with your counterparty.
Move from price to value
Divert the focus off price and home in on the Total Cost of Ownership. For any service, product or solution that we buy or sell, there is always an exchange between value & price. If we only focus on the price, the best that we will do is to haggle and it is only when we explore the total lifecycle of the service, product or solution that we buy or sell, that we begin to discover opportunities for negotiation. Before you mention price in negotiation, evaluate your counterparty's long term strategic fit, capabilities, switching costs should they wish to change a business partner, financial stability and possible risks or negative consequences that may occur when your counterparty doesn't reach an agreement with you.
Remember that the magic in negotiation is found in the quality of your planning. In times of economic uncertainty it is vital to dedicate enough time to preparing for your negotiations.