Negotiation strategies that make money

If you want to be a respected negotiator build long term relationships and create value for both parties then you need to build trust first. Trust is earned and can be lost easily. Only when the other party trusts that you are genuine and don’t use dodgy means to come to the best deal then you will be taken seriously; and you will earn the trust of the other party. Trust is the foundation of a collaborative negotiation whereby both parties will feel that they got a good deal in the end. A trustworthy relationship is important to your reputation and it will allow for more negotiations and more deals with that party. We build trust trough ‘relatedness’ (David Rock). Once we find some similarities, we build rapport and feel ‘related’ to each other which builds trust. Robert Cialdini describes in his book ‘Influence’ that similarity builds rapport which results in trust. The law of liking and the law of similarity It is no surprise that we like to deal with people we...

There is a saying that goes “withstand the silence”, which means be silent to let the other party talk.  In a negotiation you want to gain as much information as possible from the other party as it gives you more power. By understanding the perspectives of both parties you have a better chance to analyse the issue more holistically and to plan your strategy in much greater detail. How cool, you can use that proverb to your advantage. Here is how it works. Enduring that moment were nothing is said can be pretty uncomfortable. To silence doesn’t mean you are not saying nothing. You are just not engaging in talking. If you are in desperate need of information or credit the other party with more power you should use two silence behaviour. At the start of a negotiation begin by asking an open question first. When listening repeat the last phrases as it heats up further commenting by the other party exposing more information that may be useful for you. Continue listening as the ot...

There is a school of thought that believes that certain types of negotiations are fixed pie or zero sum negotiations. Meaning that what I win you lose and the other way around. A fixed pie assumption leads us to believe that there is a finite resource and both parties are now competing for the bigger piece of it. This assumption is destructive, leads to unreasonable means and unpleasant behaviours.   In some instances this approach can lead to deadlocks and it damages relationships. Once a negotiator has abandoned the fixed pie assumption and starts to concentrate on the opportunities on how to create value and grow the pie for both parties the negotiation becomes more complex but also more rewarding for both parties. In order to create value the negotiation parties need to be interested in each other and understand each other’s interests, pain points and goal. The following steps will assist with achieving this: Find a common ground – build rapport Find somethin...

Interpersonal Orientation (IO) provides an insight into social interaction between two individuals. People with high levels of IO are interested in building relationships with others. People with low levels of IO are less interested are less interested in building relationships, but more interested in what advantages they can get out of it. The degree to which a negotiator operates interpersonal orientation depends also on the context of a negotiation. Whenever two negotiators with the same level of IO meet, there is less chance of the other being exploited. High levels result into high cooperative behavior and personal relations, whereas low levels result into self-oriented behavior and low trust between the parties. If your levels of IO are too high, meaning you are too friendly and want to be friends with everybody, you are in danger of making a bad deal. You will feel bad asking for more and you won’t be able to drive a tough negotiation. When meeting a low IO negotiator, it ...

As consumers we often find it hard and difficult to change banks, mobile phone providers or energy suppliers despite being able to get a better deal elsewhere that could save us money. We all know that changing a service provider requires effort. You need to do your research, compare prices and services and trust that the new provider offers you the same or better service for a better price. That can be daunting, and we tend to become complacent and procrastinate. Big business are aware of our switching inertia and this can be exploited. Think about the Royal Commission Inquiry into the banking sector in Australia in 2019; I know of many people who wanted to change from the Big 4 to another smaller bank that was not involved in the banking issues. Others wanted to use the circumstances to get better deals from their existing bank. A year later hardly anyone did what they said because it is just 'too hard'! There is also another factor that stops us from making th...

You finally found the perfect job and you really want it! But you are not the only one, there are many others who are thinking the same and want this job as much as you. This is always the case, when applying for a job there are so many competitors, so many other applicants. So you need to stand out of the crowd and apart from having the right skills and experiences there is the following strategy that you should use. To have a greater impact on the long term memory two effects come into play which you can use to your advantage. These are the primacy and the recency effects. The primacy effect suggests that information that is mentioned in the beginning of the process is better remembered than later down the track. The recency effect has the same application, only that information is mentioned at the end of the process. For a job applicant this means that you should always try to get the first or last interview in the process as this means that you are most likely to be reme...

Whether in business or in private life, we are all dealing with people, people are emotionally charged and don’t always look at issues and situations rationally. In business everyone will encounter issues, conflict and difficult situations at some point.   You really get to know someone in a difficult situation. How are they handling the situation and how are they conducting themselves? It is therefore so important to learn how to handle such situations as it is not only about future business and long-lasting relationships, it is also about reputation. Do people want to come and do business with you or are they afraid that if there is a problem you become emotional, angry and difficult to deal with? Here are a few lessons that can be learned from difficult conversations: Don’t procrastinate Having a difficult conversation is uncomfortable, but avoiding a conflict situation is just making it worse and the situation will become even more emotionally charged. Once a...