Negotiating with suppliers can be tricky. You want to create win-win outcomes because making the other side feel like a “loser” is Old School. It’s outdated and it destroys, not builds, value long-term. But how do you create win-win outcomes when you are at the negotiating table?
In this blog post I share some negotiation tips that have worked wonders for me over the past 20 years.
Negotiation tip 1: See the world through their eyes
Instinctively we focus on ourselves and what we want. But good negotiators are more inclined to focus on what the potential deal, or problem to be solved, looks like from the other side of the negotiating table. By doing so, they collect very valuable intelligence. That intelligence is then used later in the negotiation process, as illustrated by the remaining 4 negotiation tips below.
The way to collect this intelligence is by asking probing and open-ended questions. This encourages the other party to talk. And when they do, your job is to listen.
In fact, you should aim to talk approximately one-third of the time and listen for the other two-thirds of the time. By seeing the situation from the other party’s point of view, you may uncover:
- what their basic interest are;
- what they value;
- the underlying reasons for any objectionable attitudes and behaviours; and
- what time pressures and other pressures they may be under.
Negotiation tip 2: Understand the other party’s basic interests
It’s important to understand what absolutely needs to happen for the deal to work for the other party. That’s because if your side cannot accommodate those basic interests in some way, there’s no basis for a win-win outcome. So, further negotiation would be a waste of time.
If, on the other hand, you do assess that both parties are likely be able to accommodate each other’s basic interests, you can work collaboratively to develop options for meeting those basic needs. That creates the framework within which an agreement can be made.
Negotiation tip 3: Know what the other party values
Through asking probing open-ended questions, you’ll likely discover that there are certain things you can offer which is of value to the other side, but which costs you very little to give, if anything at all. These points are worth taking note of, as you will then be able to trade those “high value / low cost” items for something you really value.
For example, in my negotiations with smaller suppliers, I have often found that offering better payment terms is of real value to them, as it improves cash flow. For a large company, improving payment terms is a relatively low-cost concession to give in exchange for something of value.
Negotiation tip 4: Stay focused on solving the problem
It’s easy to get caught up in emotions, but when negotiating it really pays to keep those emotions in check. When you lose your composure and engage in finger-pointing, you also lose control. You’re reacting, not responding.
A better approach is to understand where objectionable attitudes and behaviours are coming from. You may have some idea if you followed my first tip above. If you’re able to not take these attitudes and behaviours personally, but instead focus on solving the problem, you’ll be able to move the negotiation forward in a constructive way.
Negotiation tip 5: Be patient
Patience is a secret super power. It may sound boring and run contrary to your personality, but it works very well in a negotiation.
That’s because the party in a negotiation that is under the most time pressure is at a disadvantage. People under time pressure make rushed and poor decisions, such as offering significant concessions to quickly close the deal. There may also be other pressures at play here too.
Knowing that the other party is under pressure gives you an advantage at the negotiation table. And, having time on your side makes you less “error-prone”.
Bonus negotiation tip
Following the above five tips will get you better win-win results at the negotiation table. Though, I would like to leave you with one additional negotiation tip, which I have found very useful. It’s simply “consider all options”. You can read more about that tip in the blog post, How to Unlock a Deadlocked Negotiation.
