06/ 19/ 2008
by Kelle Campbell
Negotiating can be one of the most nerve-wracking business tasks. However, practically everyone will have to do it at some point in their lives, whether it's discussing salaries, raises, contracts, etc. Being prepared in the following four areas will not only calm your nerves but also enhance your performance.
Be familiar with market conditions and your own situation
In order to know whether an offer or counteroffer is reasonable, you need to be familiar with the relevant market conditions. Research various sources and consult with associates in order to get the facts. For example, if you are getting ready to negotiate salaries and benefits, talk to people in similar businesses about the payments and perks provided.
However, it is not enough to know industry statistics since local factors or organization-specific issues may be significant influences. You need to understand the strengths and weaknesses of your particular circumstances.
In a salary negotiation, for example, before you offer a job applicant an employment package, you can visit online resources such as Salary.com to see what pay rates are being provided to people in similar positions within your specific geographical area. If you realize that your offer will be at the low end of the salary range or even slightly below, you now know enough to contact your human resources, finance and other relevant managers and discuss possible ways to sweeten your offer with perks like telecommuting, leased vehicles, increased paid time off and so on.
Another advantage is that you will be able to effectively analyze how offers and counter offers affect you. You also know what you will sacrifice if you have to walk away from the negotiation table, that is, your Best Alternative To a Negotiated Agreement (BATNA). Knowing your BATNA also helps you weigh your advantage, if any, in the upcoming negotiations.
Research your counterparts' priorities, resources, etc.
You should also make an effort to understand so that you can get a feel of what they want and what they stand to lose if the negotiation fails. While many think that a successful negotiation results in their winning and the "opponent" losing, the optimal outcome is a win-win situation. Otherwise, you may have to waste time fending off the loser's future attempts to even the score.
Take an interest in your counterparts and find out about their business, the scope of their position, their background, their reputation, issues their organization faces and their markets. You may be able to find out a lot from associates, Internet research, publications or agencies like the Better Business Bureau. Learn as much as you can about them including, if possible, their limitations and motivations. Sometimes people value an emotional payback more than they do monetary gains, and verbal validation may be the key to getting what you want.
Know your alternatives
Determining your own motivations is also a key to negotiating. Is your objective an actual monetary figure or do you seek some other type of advantage such as a certain reputation or a better work/life balance? What is really important to you and is there anything that you are willing to sacrifice?
If you have one set objective, it may be harder for your negotiations to reach a satisfactory conclusion. However, if you know what advantages you could concede, you have room to suggest alternative solutions should the need arise. Negotiations are essentially give-and-take interactions, and you will be in a better position to steer proceedings so that you only give up short-term benefits for long-term advantages.
Prepare a list of negotiation points
Another important preparation task is writing down the list of issues that should be discussed. Even if it is not feasible to take the list into the meeting, creating it will allow you to think about specific, non-negotiable points and any concessions you would be willing to make. In addition, creating and reviewing a list of negotiation points can help you spot any loose ends.
If you have a good sense of what is negotiable for you, you will be more able to think of feasible solutions if the negotiation comes to a sticking point. In addition, you'll be able to confidently make concessions on small points and appear reasonable and cooperative rather than adversarial. In fact, in his book Trump-Style Negotiation: Powerful Strategies and Tactics for Mastering Every Deal (John Wiley & Sons, 2006), George H. Ross, executive vice president and senior counsel for the Trump Organization, suggests putting the minor points at the top of your discussion lists so you can establish an impression of cooperation before you get to the major issues. If your counterparts balk at a concession that you request, you can then point to your past concessions as leverage.
Many people will not take the time to actually prepare for negotiations. Therefore, an extra advantage to your preparations is that you are not only in a position to ensure that things go smoothly, but also to gain a reputation as a smooth and savvy negotiator despite your initial trepidation.
