Most will agree that in these tough economic times—and even during more secure periods—we want to ensure that we get the most value for every dollar spent. For a business, that means generating maximum revenue while continuing to offer great value to clients or customers. As easy as it may be to forget this in the rush of trying to achieve your own objectives, the true art of negotiation lies in meeting the other person’s needs while achieving your goals.
As a professional, entrepreneur and business owner, I have had to negotiate my way through a number of sponsorship deals as well as client and supplier contracts. Overall, the three keys to negotiating are listening, being very aware of the other party’s needs and demonstrating value every step of the way. Here is a ten-step approach that I have developed.
- Maintain your big-picture perspective – Start by thinking about what you want to accomplish overall. What are the overarching goals of your company?
- Keep your eyes on the prize – focus on specific objectives. What exactly do you want out of this negotiation? What single outcome do you need for this to be a successful negotiation?
- Do your research – What options are out there? Perhaps what you’re looking for is right under your nose and you might not need to sacrifice much to get it. Who would be open to this type of negotiation? Research similar negotiations and see how they were resolved.
- Identify each party’s needs – What do you need that they have? What do they need that you have? The concept of trading is nothing new; my snacks for your snacks at recess, a discount for a customer referral at the shop, a sheep for a goat on the farm. What are you willing to give up in order to get what you need?
- Describe how you will fulfill their needs – These are not empty promises; you need to sell the other party on the fact that you are the right person (or yours is the right company) to settle this deal. Be sure you know exactly how you will fulfill their needs, and be ready to talk about the benefits of your solution.
- Give your worst offer – Suggest only one-quarter or one-half of everything you have to give. They may be intrigued with this offer and accept without trying to draw you out. If not, go to the next step.
- Add value – This is when you start increasing the value offered, little by little, paying close attention to their reactions and keeping in mind the needs of both parties. Give an appropriate amount of time to each offer and each argument. Some have a tendency to give away the farm, before the other party has even objected.
- Highlight key points – Remind them of the specific needs that you can fulfill for them; revisit prior offers if you need to. Whenever necessary, refresh your memory on the overarching goal you established in step one.
- Give your best offer – Go all in (this is where you offer the farm) and start talking about the full package and the extent of what you can offer. This will be your final offer . . . they can take it or leave it.
- Close the deal – Once your offer is accepted, always finish with a firm handshake and follow-up immediately with whatever deliverables you promised to them. Make it a point to check in on this deal regularly to make sure there is no remorse.
Remember to keep your ears open, keep their needs in mind, and keep reinforcing the value in what you are bringing to the table. Make sure your offer provides a strong win-win solution and always deliver on any promises made. Lastly, continue to build the relationship after the negotiating is done to pave the way for future deals.
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