Chris Croft's Personal Blog

September 1, 2011

Negotiating – my top 20 tips

Filed under: My top 20s of all subjects, Negotiation Skills — chriscroft @ 6:06 pm

1. If you don’t ask you don’t get. Remember that by negotiating you are never going to cause yourself to lose the deal, providing you are nice and you are prepared to crumble.

2. Instead of saying no, why not offer a trade and see if they are prepared to make it worth your while? If they can’t, then it’s them that are saying no, not you.

3. Avoid fear and embarrassment by thinking of the negotiation process as a game. Observe the other person, and learn from both good and bad opponents.

4. Aim for a win/win outcome where tradeables can allow you both to gain. Prepare the things that you can easily offer them which they will find valuable, as well as the things that you want from them that they could easily give you. The more tradeables you can prepare, the better – try to have at least thirty.

5. Set your walk away point and NEVER go beyond it, even by a small amount. This is the source of all your strength. If you have to walk away then you’ll be stronger next time because you KNOW that you can walk away. Your walk away point is not determined by the market rate, it is determined by your personal situation.

6. Prepare their possible weaknesses to make yourself feel stronger. Put yourself in their situation. Think about their weaknesses rather than your own. Ask them questions to confirm the existence of these weaknesses. Don’t be intimidated by sole suppliers – they still have weaknesses, like fear of competitors that you don’t know about, individual sales targets to meet, etc

7. Always be nice, whatever the other person is doing. Nice, but steely and scientific underneath.

8. Ask questions and listen – the more you talk the more you give away. The more you find out the more you will gain.
9. Try to avoid opening first. Their opening offer might be good news, and whatever it is you will gain information and can modify your opening position accordingly.

10. Open wide. Your opening offer should be just beyond the best you could hope for, otherwise you’ll never get the best.

11. The Flinch – look for a reaction when you put your opening offer on the table (no reaction means you didn’t go far enough, so don’t move from there) and also, make sure YOU give a reaction when THEY open. Negotiating isn’t about hiding all reactions – if you don’t react they will think their opening offer wasn’t wide enough.

12. Don’t open with a round number. A more precise number sounds scientific, as if it’s already your limit, and from there you can more in small amounts.

13. Move in small steps. Large steps give more away, and imply that you’ve much more still to give, and also they make your opening position look dishonest.

14. Look out for, and use, The Vice, where you say “You’ll have to do better than that I’m afraid”. The Vice is usually a buyer’s tactic. The answer to it is “How much better exactly?” (In other words, get them to open).

15. Never concede unilaterally, giving things away to make them happy with you. This just makes you look weak and makes them ask for even more. Instead, trade using the format “If you… then I…”

16. Look out for The Salami – where they ask for lots of small concessions that all add up (a slice at a time). Fight back by saying “If you want that then you’ll have to give me X” or “If you want that then you can’t have the other slice that I agreed to just now”.

17. Never use the phrase “final offer”, either as a statement of as a question. If you ask them if it’s their final offer they will have to say yes, and then they can’t move – you have closed the door on any future progress. And if you use it then next time they will wait till you use it, so you have lost your ability to manoeuvre.

18. If they offer to split the difference it means that they have already given up, so the best answer is “No, I’m afraid this is as far as I can go”.

19. Watch out for the Nibble, which is when they introduce something extra after you have reached agreement. Be prepared to call off and restart the whole deal if they try this.

20. Review – did it go to plan? What did you learn?

There we are – and remember, “To know and not do is to not know…..”

June 14, 2010

Avoid the nibble

Filed under: Negotiation Skills — chriscroft @ 10:59 am

The nibble is where someone adds something else to the deal AFTER you have agreed it. Things like “… and it’s another £40 for the feet” (a real nibble I experienced at DFS sofas) or “…and of course delivery is extra” would be nibbles.

Nibbles can be done by both the buyer and the seller. For example, with a house the buyer could say “You will leave those shelves won’t you” while the seller might say “We’re taking the magnolia, it was a wedding present, you don’t mind do you?”.

The nibble is dishonest because they are waiting till after the deal is done, deliberately, because it’s then too late to change it. And it’s effective because the item seems small compared to the overall detail, you’d almost be petty to object to it. You’re so pleased to have got the deal that you don’t mind the occasional detail being changed.

But hang on! Those shelves, or that magnolia, are worth £50! Don’t just give them away! So a good answer might be “Well in fact we really like the magnolia, it was one of the things we liked about the house, and we’ll have to replace it if you take it, and that will cost about £50. Would you like to give us the cash for it now? (holding out your hand). Or shall we take it off the price of the house?”

(Sales note – this is a tea or coffee close, giving them a choice of A or B. The nibble is an assumptive close – “you don’t mind do you?” – making it hard to say “Well actually I do”)

But what about the nibble that comes up when it’s too late? For example, the sofa feet, when you’ve already signed the cheque? Well, basically you have to be prepared to say “No, that wasn’t my understanding of the deal, they have to be included or the whole thing is off”. You HAVE to be prepared to walk away from the deal completely rather than let nibblers get away with it.

The other thing you can do, and the main point of this article, is to head them off at the pass by asking the question “Are there any extras I need to know about?” earlier in the negotiation. This question completely takes away their ability to nibble you later. Whether you are buying or selling, always ask it!

February 3, 2010

If you don’t ask you don’t get

Filed under: Negotiation Skills — chriscroft @ 2:32 pm

It’s always worth giving it a try.  Sometimes what you want is easier for them to give you than you realise, in fact they may even WANT you to have it – for example, involvement in a new project, or that secondment to India.  Your boss was probably thinking “Who on earth can I get for this job?”.  Or if you’re the boss reading this, your team member was probably thinking “How on earth can I get some experience of India?”

And if they say “no” then you’ve got the moral high ground a little – you asked and were rejected, so in a small way they owe you a bit of leniency on the next negotiation.
And what’s the alternative?  You never ask – in which case that’s a DEFINITE no isn’t it?
As always this applies to shopping, suppliers, customers, bosses, (careful now!), colleagues, people who work for you, relatives, time as well as money, etc
Onwards and upwards
CC
PS – here’s a joke I was kindly sent by William which illustrates, in a slightly bizarre way, exactly my point:
There is a rumour in the forest that the bears have a hit list and everyone wants to know who’s on it.
Eventually the stag goes to the bears and asks “do you have a hit list?”, “yeah” answer the bears, “am I on it?”, “yeah” answer the bears.
The stag turns tail and runs, 2 days later he’s found dead in the forest!  Things get worse.
Next the boar goes to the bears and asks “do you have a hit list?”, “yeah” answer the bears, “am I on it?”, “yeah” answer the bears.
The boar turns tail and runs, 2 days later he’s found dead in the forest!
The smart hare can take no more and goes to see the bears.
“Do you have a hit list?”, “yeah” answer the bears, “am I on it?”, “yeah” answer the bears, “could you cross me off please?”, “yeah, no problem”.
Communication is everything!

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