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Effective and Rewarding Negotiation

We negotiate every day of our lives. We may not realise it but we do. Whether it is negotiating to appease or persuade a difficult child, with friends or work colleagues we all negotiate in some way, shape or form.

Negotiation, or more aptly the ability to negotiate well, is a key factor in what makes a business successful. It is true to say that ‘everyone can negotiate if they chunk up enough’ and frankly this is a common mistake that many businesses we work with have made. They have ‘chunked up’ a lot, made their customer happy but left themselves well short in terms of what they get out of the deal – i.e. not a win/ win but a win/ lose and the loser is often them. This failure to negotiate effectively costs in gross margin which in turn puts pressure on providing other key differentials in service and superior products and can ultimately cause further pressure from the customer because the service / quality that they had ‘come to expect’ from you, has slipped – pressure is then applied then in a different direction.

So it’s definitely worth spending time getting your organisation up to speed with negotiating and the skills that make deals work for your business – AND your customers – the WIN/WIN you seek.

There are some basic steps that will help you get it right:-

  • Preparation – poor preparation precedes poor performance. By preparing well, knowing the facts and the history you give yourselves the best platform for success. You need to include all you want to cover in your preparation because it’s difficult to add in more elements later on. Consider the other side‘s position – put yourselves ‘in their shoes’ and ‘see the world as they might see it’ - you will then be ready for whatever is thrown at you.
  • Know the people involved – If it’s a cold negotiation this is more difficult but relationship building is important. It’s important to try to get to know their interests outside work so you can talk to them about these and not just the business. We are not talking of ‘friendship’ here but rather knowledge about an individual that allows you to personalise your approach more effectively.
  • Know your limits and be prepared to say ‘no’ – The purpose of any negotiation is to achieve an outcome which both parties find acceptable – within their negotiating boundaries. Some businesses find it difficult to say ‘no’ and because they have not established their limits before the negotiation offer too much as they don’t want to ‘offend’. There is no point coming out of a negotiation with a deal that doesn’t work for your business – you will suffer the consequences for some time afterwards. You owe it to yourself and your business to be strong. Explain why the limits are there. Customers will respect you for it.

There are a number of other key elements, aspects and errors that come into play beyond these three:

  • Listening skills
  • Knowing your ‘WALK AWAY’ position or ‘NEXT BEST ALTERNATIVE’
  • Exhibiting an ‘UNWILLINGNESS TO WALK AWAY’
  • Believing in non-negotiability
  • Always putting price first
  • Wanting to ‘WIN’
  • Giving ultimatums.

Some of the above are positive but some negative – but what elements fall into the positive category? Knowing this is so important in negotiating successfully. Being able to introduce sound and effective Negotiating Skills to you/ your team can add much in terms of additional margin. These skills are trainable and we can help if this is something you want to explore. For a no obligation/ free discussion or meeting to discuss how we might help, contact us on: 0116 232 5231 or at:ignite@tinderboxbusinessdevelopment.co.uk

David Turner

Managing Director

david.turner@tinderboxbd.com

07747 023610

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Who we have worked with

Who we have worked with: Hallmark Cards, Coca-Cola, Hasbro, Rolls Royce, Sunseeker, Mattel, MicroSoft, Argos, Auto Glym, P&G, Ferranti, FloGas, Lloyds TSB

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