In Focus Commercial Credit
Ten commandments of negotiation
When negotiating with a customer, understanding your strengths and deploying them wisely are key to success
Neil Clothier Senior expert, Huthwaite International
Picture the scene. You are making the deal of a lifetime and your negotiation skills could make or break it. The stakes are high and knowing how to negotiate to the highest standards to achieve the best outcomes without compromising long-term relationships is essential. A difficult scenario, and one that most
seasoned business people will be familiar with. We have conducted a large body of directly observed research into live commercial and contract negotiations, which reveals that most people, in most places, negotiate badly, most of the time. Follow these top 10 commandments to
create a safe negotiating environment that will pave the way for a successful business deal.
Sell first and then negotiate, if you have to If you can sell your buyer an unchanged solution at the full, quoted price, why negotiate? However, in major business contracts, this is rare. Usually the buyer will signal the start of a negotiation by saying something like: “I would like to do business with you if…”. Average negotiators will have already given things away to achieve this position; the skilled will not.
Never concede, always trade Effective negotiation involves movement by both parties towards an outcome. Avoid ‘giving’ something without ‘getting’ something in return. When you need to move from any stated position, make a conditional offer such as: “I might be able to move on X, if you are prepared to move on
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www.CCRMagazine.com October 2019
Y.” This is particularly important towards the end. The seductive sight of a deal can tempt the unwary into unilateral concessions.
Win-win is not fifty-fifty We are all encouraged to aim for win-win, but what we actually want achieve is the
best possible deal that still allows a win for the other side.
If you feel weak, the reverse applies. If power is about perception and feelings, you can manage and control it
Power is in the head Many sellers feel that power in negotiation lies with the buyer. However, having worked with buyers, I can tell you that they often say the opposite. They need the service being sold and can seldom afford the deal to fall through either. Power is a perception. If you feel powerful, you are powerful, and you behave accordingly. If you feel weak, the reverse applies. If power is about perception and feelings, you can manage and control it. This explains how skilled negotiators generate and manage their feelings of power.
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