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Four Step Negotiation

The Management Pocketbooks Pocket Correspondence Course

Pocketblog has gone back to basics. This is part of an extended management course.


We all have to negotiate; whether formally, arranging rotas, or informally, looking for a little extra help. In some cultures, it is more than a way of life, it is a ritual to be savoured. Everyone is familiar with its ploys and gambits, and is comfortable with the give and take, the spirited competition, and the feigned offence. Not negotiating is what gives real offence.

In other places, negotiation can feel alien: it feels more like an argument. Consequently, many managers feel uncomfortable with the idea of negotiating.

So, how can you negotiate well, and feel confident at the same time?

Negotiating is a learnable process. There are four basic steps, that you can practise and carry out, to get a result every time. It may not always be the result you hoped for at the outset: that’s not the goal of negotiating. There are, after all, two (or more) parties to please.

Negotiation is a process of searching for an agreement that satisfies all parties

So, let’s look at the process; it has four steps.

1. Preparation

The secret of success lies in going into the formal ‘let’s negotiate’ part fully prepared. This can give you an immediate edge but, realistically, will simply prevent you from being at a disadvantage from the start. Its real importance is two-fold: to boost your confidence and to equip you to recognise and secure the best outcome available… or to know when to walk away. Perhaps the simplest useful advice is in the words of Kenny Rogers:

You got to know when to hold ’em, know when to fold ’em,
Know when to walk away and know when to run.
You never count your money when you’re sittin’ at the table.
There’ll be time enough for countin’ when the dealin’s done.

So, what to prepare?

  1. Know what you want, and what your option would be if you failed to reach agreement. Known as your BATNA or ‘Best Alternative to a Negotiated Agreement’, this tells you when to walk away. It forms your bottom line.
  2. You need to inventory all the variables in your negotiation: what you can trade, offer, concede, request, and tweak, in terms of money, goods, services, or relationships. This will give you your manoeuvring space.
  3. Find out about the other party and do your best to anticipate what they need, want and don’t want and, as a result, some likely scenarios. Play them out.
  4. Assemble a file of every relevant fact or figure so you have them to hand. Ideally, learn it all – the impact of that on your counter-party can be stunning. If not, at least be familiar with it all, so you can quickly find what you need.

2. Opening

Your first priority is to make a positive first impression. Dress right, enter confidently, and get your papers out to reveal an orderly file, smart notebook and classy pen. Show you are confident and mean business.

A few minutes of rapport-building banter recognises that negotiation is a human activity. It’s harder to be hard with someone you have rapport with, so soften up the other side. Next, establish any ground rules – above all, does the person in the room have the authority to seal the deal? If not, you will never want to make your best offer to them.

3. Bargaining

Once the give and take of the negotiation is underway, the secret is to listen hard, never respond immediately, and not to be defensive. Always move one step towards where you think agreement lies, either accepting a concession, making one, requesting one, or spelling out the next step. Anything else shows you to be focused on the wrong thing. The right thing is the big picture: progress towards an agreement that satisfies all parties.

Let any raising of emotional temperature, defensive behaviour or outrage come from the other side of the table. You will look wiser, more confident and more powerful. This is why we prepare.

4. Closing

Eventually, you will either reach a point of agreement where both of you are happy, or you will reach a point where one of you recognises that no such agreement is possible and offers to walk away – or storms out; but don’t ever let that be you.

This is where inexperienced negotiators stumble. They fear that saying they are happy and checking that the other party is too, will break the magic spell. The opposite is true: failing to declare this point will mean the magic will wear off. So go for a close. The simplest and safest approach is a trial close:

“I think we are at a point where we can both agree? Is that how you see it?”

If you get the right signals, express your pleasure and move straight into the formalities of finalising the detail: handshakes, drafting, signatures and logistics. Never, ever re-visit any of the terms. You have a deal and there is no way it can get better, so the only thing that will happen is that it gets worse. Stop.

Can it be that simple?

Yes and no. Yes, this simple process works and is the basis of all negotiation. No, because every negotiation will be different and there is one fundamental characteristic of all negotiations that militates against simplicity: they are a human endeavour. But as such, if well prepared, you are in the same position as the other party. You are a human; so are they.

Further Reading

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Customer Journey: Mapping your Relationship

Customer Journey

Customer JourneyYou can’t understand someone until you’ve walked a mile in their shoes. That’s the principle behind mapping out your customer journey. It’s a way to get an insight into how it feels for your customers to deal with you at each step along the path.

And since understanding your customer is vital to making them feel good about buying and using your product, customer journey mapping is a valuable tool to support this Big Idea.

Continue reading Customer Journey: Mapping your Relationship

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Product Manager: Strategist, Advocate, Keystone

Product Manager - Product Management

Product Manager - Product ManagementMovie stars, celebrities, and sportspeople have managers to take care of their business affairs. So, why shouldn’t a superstar product? And if every product can aim to be a superstar, then they will all need their own Product Manager.

And that’s what we’ll look at in this article; the role of a Product Manager:

  • Why we need them
  • What they do
  • The breadth of their role

So, let’s dive into the world of Product Management.

Continue reading Product Manager: Strategist, Advocate, Keystone

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Colour Psychology: Creating a Feeling

Colour Psychology

Colour PsychologyWe associate colours with brands and brands with colours. Some colours and combinations immediately evoke a brand. And others instantly trigger a feeling. This is the role of colour psychology in marketing.

Much of what people think they know about colour psychology is little more than pseudo-science. Chromatic astrology, if you will. But there is also a growing body of research evidence to fall back on.

And what that underlines is that, for whatever reason, there is some firm basis for colour psychology.

Continue reading Colour Psychology: Creating a Feeling

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Upsell: Optimise Every Sales Opportunity

Upsell, Cross-sell, Down-sell: Optimise Every Sales Opportunity

Upsell, Cross-sell, Down-sell: Optimise Every Sales OpportunityYour customers may be few or many. But you never want to let one leave without making the best sale you can. So you need to learn the art of the upsell. And, for that matter, of the cross-sell and the down-sell.

All of them take place after your customer has made their first decision to buy. So, you have done the hard work. Now you can use upselling and cross-selling to increase your revenue. And, if your customer changes their mind, there’s always the down-sell.

If you want to optimise every sales opportunity, you need to know how to apply the ideas of the upsell, cross-sell, and down-sell.

Continue reading Upsell: Optimise Every Sales Opportunity

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April Fools’ Day – April Fish

April Fools' Day

April Fools' DayI don’t suppose we’ll ever find out the origin of April Fools’ Day. But it would make the basis for a great prank!

It does seem sad to me that, in most workplaces, the tradition of harmless jokes is dying out. Yes, I do understand the need to avoid giving offence or causing disruption. So, if we’re ever to see a bit of inoffensive leg-pulling, April Fools’ Day (tomorrow) is a good time for it.

Please don’t take this post as licence to disrupt or offend. But, if you can come up with something genuinely witty, why not? Make April Fools’ Day a source of fun for your colleagues!

Continue reading April Fools’ Day – April Fish

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A/B Testing: Finding the Optimum

A/B Testing

A/B TestingWhy is Amazon so successful? A big part of the answer is A/B Testing. Unknown to most users, we are subject to thousands of A/B tests every week. It tells Amazon how to layout a page, which products to offer you, and even the font size on the buy buttons.

A/B testing is ubiquitous on the internet and it powers millions of marketing decisions a day. Yet the idea is shockingly simple. What has changed is the technology that allows marketers to carry out their A/B tests on statistically significant samples quickly and easily. That’s what the internet and web technologies have given us.

So what is this age-old idea, and what can it do for you?

Continue reading A/B Testing: Finding the Optimum

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Multi-Level Marketing (MLM): Pyramid Schemes?

Multi-Level Marketing

Multi-Level MarketingI’m sure Multi-Level Marketing has been around since ancient days. Send out street urchins to sell stuff and take a big chunk of their income. Get them to recruit other homeless kids and let them have a share of what their protegé earns.

But Multi-Level Marketing (or MLM) is big business now, with one estimate* putting it at around the US$200 billion per annum mark, worldwide.

So, we have to ask:

  • What is Multi-Level Marketing?
  • How does it work?
  • Is it a good way to earn a living (here’s a spoiler: no)?
  • And how do you spot an MLM scheme if offered one?

Continue reading Multi-Level Marketing (MLM): Pyramid Schemes?

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The Long Tail: Infinite Consumer Choice

The Long Tail

The Long TailThe Long Tail is the other half of the same chart we saw in an earlier Big Ideas article: the Pareto Principle. Vilfredo Pareto took an interest in the head of the chart, where a small number of people accounted for a huge proportion of wealth. In 2006, Chris Anderson published a book that looked at the huge number of products that form the remainder, when you exclude the few that account for the majority of sales.

How many categories of item does Amazon list? I found the statistic from January 2018 that:

Amazon lists more than 3 billion products across 11 marketplaces worldwide.

But most of their sales and revenue come from the top few highest performing goods in each category. A small number of books may sell thousands a month. But there are millions of books that rarely sell any in a given month… or year.

Continue reading The Long Tail: Infinite Consumer Choice

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Tribes: From Shared Interest to Change

Tribes

TribesSeth Godin is a marketer and a communicator. His stream of valuable ideas about 21st century marketing is something we’ve written about before. And we’ve featured his idea of Permission Marketing in a previous Big Ideas article. But perhaps the most resonant of his ideas is that of Tribes. This is the idea that marketers need to lead change. And we do that by building a coalition of the willing: a tribe of like-minded people who share our vision.

What I like best about Godin’s idea of Tribes is that it works well on two totally different levels. And different managers in our readership will find greatest resonance in one or the other. The idea of tribes can be about:

  • leading change to build a better future
  • creating demand for a new product, idea, or service

So, Tribes is a big idea about change leadership or about marketing… or maybe about both.

Continue reading Tribes: From Shared Interest to Change

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