Negotiation Skills Session 3 1 Positional Negotiation The

Negotiation Skills – Session 3 1

Positional Negotiation The more you clarify your position and defend it against attack, the more committed you become to it The more you try to convince the other side of the impossibility of changing your opening position, the more difficult it is to do so The result is frequently an agreement that is far less satisfactory to each side than what it could have been 2

Negotiation Style Activity Assertive Co-operative Competing √ * Accommodating * √ Avoiding * * Collaborating √ √ Compromising √ √ 3

Negotiation Tactics q q q No Deal Tactic Ø Force you to accept the worst deal Ø Can do better by walking away Ø Cherry Picking Anchoring Tactic Ø Customer makes an extreme offer Ø Compromise is higher than seller expects Ø Hard bargaining Concealing Information Ø Customers keep changing their stance 4

Negotiation Tactics Contd… q Making Last Minute Demands Ø q q Vulnerable to accept The Krunch Ø You’ve got to do better than that Ø Mostly used by buyers Boulwarism Ø Named after Lemuel Boulware Ø Ultimate offer with no revisions Ø Refers to “Take-it or Leave-it” 5

Negotiation Tactics q Preconditioning – Bothering customers with tele-calling q Monkey on the Back – Only Rs. 1000 in my pocket q Use of Higher Authority – Introducing an unseen third party q Nibbling – Vulnerable (kept secret till the last moment) q Good Cop Bad Cop – Walking away tactic q Maintain Low Key – Silent tactic ISMS © Stratecent Consulting 2005 6

Do’s while Negotiating q Analyzing the Issues q Specifying the goals q Ask open ended questions q Use closed ended questions to confirm q Focus on objectives q State the facts q Use right level of muscle 7

Don'ts while Negotiating q Don’t say things like “That’s not fair” or “It’s my turn” q Don’t raise minor issues that are irrelevant q Don’t get into an argument, it’s a discussion q Don’t be scared to ask q Don’t pressurize q Don’t take it personally q Don’t assume anything 8

Bargaining q Get the other side to commit first. q B: “I’m willing to reach some sort of deal, but I want a 10% discount. ” q S: “I’ll agree a 10% discount, but we have to look at a longer term agreement. ” q B: “Well, thanks for the 10% but the 1 year contract we have already agreed will have to stand. ” q S: “Okay, we may be able to look at our discount structure, but to do that we will need to agree a 2 year contract. ” q B: “Okay, 2 year may be possible. Can we get the full 10%? ” 9

Business Negotiations: Closing Signals Depends on the effort put at the earlier stages. q Closing signals include: Ø The difference in the position of the parties narrows significantly. Ø The objections have faded out. Ø Other side indicates that they would like to see a draft agreement. q Closing will only occur when both parties have a feeling of Win q Remember the Salesman’s Golden Rule, “Once you close…. Shut Up. ” 10

Americans Approach to Negotiation q q q Focusing on results vs. relationships Ø Getting results is topmost priority Ø Success is directly proportional to results Viewing negotiating as a competitive process Ø Tend to be self focused Ø Deal is a deal Wanting to get down to business quickly Ø Move quickly from issue to issue Ø Push for a quick closure 11

ABSURD Negotiating Behavior q Argue – Contrary view to every point q Block – Resist and block the progress q Sideline – Distracted conversations q Upset – Complaining q Ramble – Off beat q Dominate – Controlling 12

Removing the Emotional Element q Identify the points you have in common to establish an atmosphere of agreement q Identify the points you differ on, and re–evaluate your position in light of information obtained about your opponent's view q Work on resolving the differences without taking sides 13

The 4 Key Concepts q BATNA q Reservation Price q ZOPA q Value creation through trades 14

BATNA q Is the only standard which can protect you both from accepting terms that are too unfavorable and from rejecting terms it would be in your interest to accept. q In the simplest terms, if the proposed agreement is better than your BATNA, then you should accept it. If the agreement is not better than your BATNA, then you should reopen negotiations. 15

Thank You!!!