Browse Negotiating Skills

Purchasing and sales pros alike are fascinated by commercial law. We should be; it is part of our daily experience and we need to be masters of it. The purchase and sale of goods is a matter of contract law and a PO is a contract. Yet very few of us have any formal education or training in purchasing law. Let’s look at a basic question of buyer and seller authority, a frequent bone of contention. Most of the facts cited in this story can be found in the Purchasing Manager’s Desk Book of Purchasing Law (Prentice Hall).

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Ask any twelve buyers to define ‘Best Value’ and you will likely hear a dozen muddy descriptions. In today’s performance metrics, numbers driven environment, we need to speak the buyer’s language. The successful seller specifies ‘Best Value’ by expressing it in quantifiable terms favorable to its sales strategy. The purchasing definition of Best Value’ is the lowest Total Cost of Ownership (TCO). Simply stated, TCO is the sum of its four elements of Cost: Quality, Service, Delivery and Price (QSDP).

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In over two decasdes of conducting seminars and workshops for fellow purchasing pros, all have voiced one constant refrain. Everyone’s goal is “to become more comfortable, confident, and competent in negotiations.” Needs and solutions Businesses must constantly train buyers in negotiation, the core competency of the profession. When sales skyrocket, negotiation training controls costs. When sales collapse, negotiation provides much to all of the profitability. In today’s economic climate, the question of which training medium and associated costs is top of mind.

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Children are good negotiators. They know that 'no' means 'maybe', do not give up easily, and ask for more than they want. They do not take "No" for an answer Kids demand to know "Why". If they move past the parental "Because I said so", they may overcome the objection. The adult equivalent words in the sales negotiation context are, "Tell me about it." This phrase opens the door to frank communication and dislodges the 'No' answer. They are persistent and creative A rejection merely whets their creativity.

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Negotiation is the most important business skill we'll ever master, yet it is often among the missing in our profits tool box. We think of labor productivity, equipment, and techniques, as our stock in trade. Certainly, all these are mandatory resources to prosper in the business, but none have the single largest impact on profits, cash flow, and long term viability as negotiation does. Negotiation is a mixture of business arts and sciences that works best when viewed as a set of economic principles.

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The issue of supplier evaluation has caused some misunderstanding in purchasing circles. A coherent supplier management strategy requires this best practice so let’s clarify some of the major points that make an evaluation program a success. Is supplier evaluation the same as certification? Supplier certification or qualification is an initial screening process by which suppliers are approved to compete for business. It means that the supplier meets certain objective standards. For example, a hardware distributor can not qualify to provide catering services.

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Plan your concession behavior to enhance sales success and customer satisfaction. Good concessions are donations of perceived value, not demonstrations of gamesmanship. Perceived value means the importance the other side attaches to our concession. Gift certificates as an example Merchants love to sell these because they are priced at retail, they bring customers back, and they have a low redemption rate. As part of a settlement negotiation with an unhappy customer, gift certificates are a common concession.

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Win-Win ranks high on the list of overused buzzwords, but many of us have trouble understanding the counter intuitive notion that two sides can win when a product or service is bought and sold. Win-Win is not only obtainable, it is the ideal result. How then does it work? Negotiation strategy always has a profound impact on business. There are four strategies; they are: Win-Win, Win-Lose, Lose–Win, and Lose-Lose. Selecting the appropriate strategy depends upon how the parties value the Issue and the Relationship. A visual aid works well to explain this concept.

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How would you answer this question that a buyer might pose: “Why not just eliminate all the negotiation nonsense and just get right down to the best deal?” Well, you can, but only about as often as you get married. Skipping negotiation means trashing the communication and investigation process by which buyer and seller build a relationship. Without a time tested courtship history, we almost guarantee a poor outcome. Trust, like credit, must be earned. Only a fool would extend credit to a stranger.

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In the sales profession, not everyone you interact with will be an ethical negotiator. And a difference in standards can potentially cause serious problems in the negotiation process. Some people enter negotiations with no interest in forging mutually beneficial agreements. These types are only ...

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Every salesperson and businessperson has had the experience of being close to closing a deal with a cooperative prospect, when suddenly all progress grinds to a halt. Any number of factors for the roadblock may be to blame. Maybe discussions hit a snag due to a miscommunication or a lack of ...

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Everyone uses negotiation tactics to get what they want, whether they’re haggling over the price of an item in a garage sale or discussing potential salary with a future employer. Most of the time, when you enter a negotiating situation you can expect the other party to use certain maneuvers to ...

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'Split-It-Down-The-Middle' is a great tactic... but it's a lousy strategy. Everybody's Heard of It If there's one thing we all know about negotiation it's the "Split it down the middle" (SIDTM) technique. You're very close on the purchase of your first car (in my case, a 1956 Thunderbird in ...

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To negotiate effectively, you must be able to communicate effectively. Unfortunately, most salespeople and businesspeople don’t realize the importance of solid communication skills to the negotiation process. As a result, they lose sales or don’t get the best possible deal. However, as a ...

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Men and women have been talking to each other, past each other and at each other ever since Adam became separated from his rib and the first gender gap was opened. Our early ancestors settled on a division of labor, dictated largely by biological necessity: The women bore the children and ...

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Ever notice that when you get together with your Mother, you end up playing the same roles that you had in junior high? No matter how sophisticated and worldly we become, we revert to those same roles we had at sixteen. We all love our Mothers and appreciate what they have done for us by raising ...

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There are some stereotypes that women cannot negotiate as well as men: that women are not as aggressive, that they take things too personally, or that they are not taken seriously. As a woman negotiator myself, I believe that the same rules apply to men as woman. However I have listed five rules ...

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ThermaSys Heat Transfer used to sell engine radiators to the likes of General Motors, Caterpillar, and John Deere. Now, they provide “assemblies” that include the radiator, fan assembly, plastic shroud and even the mounting bolts. A few years ago, they partnered with their customers ...

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One of the cardinal rules of Power Negotiating is that you should ask the other side for more than you expect to get. Henry Kissinger went so far as to say, “Effectiveness at the conference table depends upon overstating one’s demands.” Think of some reasons why you should do this: • Why should ...

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Learning to improve your negotiating skills is the highest and best use of your time. Consider this: if you make $50,000 a year, that’s about $25 per hour. When you’re negotiating the purchase or sale of something, you’re not making $25 an hour—you’re making $25 a ...

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Please allow me to be very frank with you dear reader. The purpose of this article is to convince you that mediation, as oppose to litigation, is the Appropriate Dispute Resolution technique in the majority of civil disputes. First of all, what is mediation? Mediation is a method of alte ative ...

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Who are we actually doing this for? Let’s face it, the self gratification that we as mediators get after settling a case gives us a rush only morphine can sedate. The satisfaction of having two people agree on a mutual solution is a great feeling even if that feeling is not shared by the parties ...

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Personally, I believe there exists one skill in conflict management that can be categorized as the most important of all. This idea in itself sends jitters down my spine since handling of disputes-whether with the sole aim of managing them or resolving them permanently- most often involves a combination of several skills and as such one may tend to believe that there isn’t any such a skill as the ‘most important’. Consider this analogy; is there an ingredient in a cake that can be said to be the most important?

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Human intelligence ranks as one of the broadest terms. I.Q is one of the aspects that can test one’s intelligence much as various aspects of our lives also require intelligence. Over a decade ago, Daniel Goldman determined that there is emotional intelligence, physical intelligence, social intelligence and so on. For a kid to fulfill their potential, various abilities will have to come into play. For instance, a kid possessing high IQ but low frustration threshold might achieve lower results compared to a kid with low IQ but high frustration threshold.

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If you live in a society, then clearly once in a while you find yourself pondering over how to handle conflicts. The conflict might be affecting your personal life concerning a friend or a member of your family or in your professional life with a peer, an employee or a client. It’s true that wherever there are people, conflicts are bound to erupt. Why? Well, that’s a matter to a different column; let’s just say that basic human traits turn humans into ‘conflict prone’ creatures.

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When thinking about conflict resolution strategies, several options pop up into your mind. Yet each circumstance, due to their distinctive features such as goals to be achieved, how much leverage you do (or don't) have and/or constraints that tend to directly influence the action to be taken-have specific requirements, thus specific different approaches. It can

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"What turned in on will turn it off" – since the epistemic trap was created by self, it's in one's hands to unlock oneself. In other words, the door can only be opened from the inside. This point lays in the foundation of Phenomenology. Let's explain the term using an example: Think of a dog, any dog that comes to your mind. What feeling arise in you while watching, privately, the picture of the dog? Did you experience positive feelings like love, or negative ones, like anxiety?r

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We are trapped within the boundries of our knowledge. We are prisoners to an epistemic trap. The reason traps trap us is because there are made in an asymmetric way. We make an assumption that getting into a room will be as simple as getting out but once the door is closed behind us, we discover that opening the door from the outside is not as easiliy equivalent as opening it from the inside. We realize we've made the assumption only when we discover that we are wrong.

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Managing the 2nd Type of Conflict - Having the Difficult Conversationr The difficult conversation model is comprised of three stages: Preparation - Conversation - Conclusion. At each stage there are clear requirements without which there is no point in, and often no possibility of, moving on to the next stage. If I don't prepare myself properly the conversation will not be successful, and if I don't handle the conversation correctly there is nothing to conclude. Stage One - Preparationr The first stage in the difficult conversation model is also the most important.

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Introduction - What is a Difficult Conversation?

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In the former article: Flaws of Win-Win - part I, I’ve tried to show why the Win-Win model that advocates collaboration is not necessarily an Archimedean point in initiating collaboration. Hopefully I’ve left you with the question “o.k. so what do you offer instead?”r

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What if I'll tell you, that the Win-Win approach - the one that we all (including myself) - were raised upon, does not work out in the field! Most of the times I present this idea to a group of people, I get strange looks. It doesn't stop to surprise me, how deep the Win-Win perception is rooted in our mind. How the solution where everybody come out "happy" is a belief held by so many although most of the time it leads to compromises.r

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