I attended a workshop recently on Negotiating Skills hosted by the Greater Miami Chamber of Commerce. I was very interested in attending because I feel as if I negotiate something every single day and wanted to learn how I could be more effective. How to make sure I’m not leaving something (money) on the table.
I don’t know about your business and life in general but I would be willing to bet, you negotiate daily too. You may negotiate with your kids or your significant other, your employees, your vendors, your boss, your colleagues… the list seems endless.
One of the tidbits I found interesting was that even when both sides are in agreement the deal still falls through 45% of the time.
Why? Well, many times it is a lack of understanding of what the other side really wants to accomplish. The panel gave a number of examples of how deals weren’t made because of a lack of communication.
The reason “why” can make a huge difference in a negotiation. The panel discussed a recent real estate deal. The two parties; the building owner and a renter had been speaking for months trying to come to terms. They couldn’t and had to hire a mediator. The building owner had an opportunity to sell but the renter had a long-term lease. They just couldn’t seem to come to terms. Why? The renter finally explained that the seller kept insisting that they move out quickly when a deal was made. They just wanted to have 45 days to move. It wasn’t about price or buy-out or anything more than time consideration. They weren’t communicating. Each thought the other had a different agenda.
I recently worked on a custom product being produced overseas. I read the email from the factory incorrectly and sent them a very “questioning” email about their pricing and indicated that I was being charged too much. They came back with several reasons why that to me didn’t seem to add up to their increase. After a little give and take, they lowered the price. Now, yes, I could have made it work at the price they originally quoted, but in the end they not only made me happy on this order, I will be back again.
One of the best tips the panel provided was: “don’t get caught in a lie”. They indicated that is one of the worst mistakes you can make because then you lose the trust factor. Now, that’s not to say you have to give full disclosure from the beginning. Initially you may want to give an overview of what you are seeking and why it’s important to you and release more information as you get further into the deal. It’s not lying, it’s strategically disclosing!!
Another good point they made was that we all need to listen more than we talk. We need to exercise restraint and truly listen to what the other side may be seeking and ask open ended questions. If all you ask are yes and no questions the chance of gaining a full understanding of the deal in play is very limited. A good negotiation ends with both parties getting what they want.
However, in the end if you’ve reached your threshold and you still don’t have a deal that suits you, then you must be prepared to walk away. All you need to say is “I’m sorry, this doesn’t work for me”.