View This Issue - Panama City Beach Chamber of Commerce

“I’m the final
Decision Maker”
At the beginning of many negotiations,
someone will typically ask, “Who are the
key stakeholders on your side, and is everyone
needed to make the decision in the
room?” For most entrepreneurs, the answer,
of course, is yes. Who, besides you, is ever
needed to make a decision? Isn’t one of the
joys of being an entrepreneur that you get to
call the shots?
Yet in negotiations, particularly with larger
organizations, this can be a trap. You almost
always want to establish at the beginning of a
negotiation that there is some higher authority
with whom you must speak prior to saying
yes. In a business owner’s case, that could be
a key investor, a partner, or the members of
your advisory board. While you will almost
certainly be making the decision yourself,
you do not want the opposing negotiators to
know that you are the final decision maker,
just in case you get cornered as the conversation
develops. Particularly in a high-stakes
deal, you will probably benefit from taking
an extra 24 hours to think through the terms.
“I think we’re Close”
We’ve all experienced deal fatigue: The moment
when you want so badly to complete a
deal that you signal to the other side that you
are ready to settle on the details and move
forward. The problem with arriving at this
crossroads, and announcing you’re there, is
that you have just indicated that you value
simply reaching an agreement over getting
what you actually want. A skilled negotiator
on the other side may well use this moment
as an opportunity to stall, and thus to negotiate
further concessions. Unless you actually
face extreme time pressure, you shouldn’t be
the party to point out that the clock is loudly
ticking in the background.
Seven tips for
Masterful Negotiating
Whether you’re trying to close a major account
or get a better rate from a vendor, here are expert
pointers on how to win in negotiations.
1. Listen before you speak. There will
always be time to open your mouth later, but
tap your patience to find out what the other
side is thinking first. Then you have extra
leverage to tailor your points to fit both sides’
goals. When entering a negotiation, don’t
make any assumptions about what’s in the
other party’s mind – just enter the situation
with an open mind and plenty of questions.
2. Embrace your fear. Ninty-five percent
of the folks you’ll ever negotiate with
feel just as nervous and, yes, as scared as you
do. For that reason, kindness is a key competitive
advantage when it comes to negotiations.
Find the theory “nice guys finish first”
at the negotiating table; use a combination of
professionalism, ethics and manners.
3. Avoid Storytelling. In a negotiation,
the important thing is for you to be completely
truthful about your situation. This is especially
true when it comes to negotiating a loan or another
financial arrangement. You don’t want
to win a particular negotiation at the expense
of your credibility. The more forthright you
are with the other party, the more likely you
are to arrive at a satisfactory outcome.
4. Study Up. The more knowledge you
have of a situation before going to the negotiating
table, the better off you will be. The
“consistency principle” refers to a person’s intrinsic
need to appear reasonable. That means
your counterpart will likely abide by certain
standards and defer to your authority if you
are able to demonstrate that you absolutely
know what you are talking about.
5. Ditch the dog metaphors. Baring
teeth and barking the loudest doesn’t have
the power it might seem to when bargaining.
When deal making gets tense, no one
ever wants to back down. Instead of viewing
your counterpart as the adversary, focus
instead on the merits of the case and search
for ways to achieve reciprocity. The idea is
to attack the underlying issue rather than the
other negotiator.
6. When all seems lost, gain something
else. If a negotiation is going nowhere
and taking up too much of your time and energy,
you may want to walk away from it. Before
you do, stop and think, what else can I or
my company get out of this situation? Might
someone else give the negotiations a try? Or
perhaps you can use the bad situation as an opportunity
to train someone at your company
on how to deal with toxic clients.
7. Remember, you’re already a pro at
this. However much you think you negotiate,
you’re probably underestimating your
experience. All of us negotiate many times a
day. Your co-workers, children, spouse and
even fellow passengers on the train, help you
refine your skills day in and day out.
CHAMBER MEMBERS
WEIGH IN:
9 What is your
best negotiating tip?
Melissa Allegretto
General Manager & Vice President
Magic Broadcasting
It is important to remember the value of
the relationship / partnership more than
the outcome of a single negotiation. You
always want to maintain trust, and at
times during negotiations either side can
lose credibility quickly. If you don’t over
promise, you will always have an opportunity
to over deliver.
David Howard
Director of E-Commerce
Bay Automotive Group
Negotiating the deal begins with all parties
understanding each other’s wants, needs and
expectations. In today’s market the best deal
isn’t always predicated by price, but by the
overall experience. Ask 1) Was the negotiation
handled with respect? 2) Did we achieve
our goals? and 3) Would you return here to do
business again? Always remember to do your
homework, and the only stupid question when
negotiating a deal is the absence of questions.
THE CIRCUIT September/October 2012 67