Six Deal-Killing Negotiation Mistakes
Want to Kill a Deal? Make These Six Negotiation Mistakes
In today’s hyper-competitive environment, negotiation skills are an essential part of doing business. Increasingly the ability to negotiate effectively is more valued than ever. Negotiation is a process where two or more parties with different needs, pressures, and goals discuss a contention to find a mutually acceptable solution. Excellent negotiation skills can make a positive impact on an organization’s bottom line. Favorable negotiations leave each party ready to do business together again. To that end, we put together a list of common negotiation mistakes individuals make when they attempt to negotiate.
Mistake #1 – Talking Too Much
An old but still relevant sales adage says: “When the customer says ‘yes,’ stop selling.” For many negotiators, speaking is a way of being in control of the conversation. Yet, talking too much carries a lot of inherent pitfalls. One difficulty is that you could inadvertently give too much information to the other side. Another danger is that it is almost impossible to listen while you’re talking. Silence is a powerful way to gather information because of the discomfort most people feel when it gets quiet. Keeping silent almost compels the other party to talk, and when they start talking, you get valuable information, they may not mean to reveal.
Mistake #2 – Not Recognizing Tactics
A tactic is an action or strategy carefully planned to achieve a specific end. Tactics are used every day during negotiations. They’re an integral, expected part of the bargaining process. However, while it’s true that there are countermeasures for every tactic. Countermeasures are useless unless you can recognize and identify the specific tactics the opposition used on you. Learn the most common tactics first (and how to identify them), along with the corresponding countermeasures, and your negotiations will improve dramatically.
Mistake #3 – Splitting the Difference
Splitting the difference is probably the number one rookie mistake. While “let’s split the difference” may sound fair and reasonable, it isn’t. It’s much more often a signal that the other side is tired of negotiating and wants to finish. Realize that, when the other party offers to meet in the middle, they are essentially conceding half of the difference between you. No law says you have to make the equivalent concession. Try saying something like, “Wow, that sounds like a fair offer. But the problem is, I can’t afford (half). I might be able to afford… (a fraction of that half).”
Mistake #4 – Equating Win-Win with Satisfaction
When asked to define “Win-Win,” a majority of business professionals will respond with something like, “Both parties are satisfied.” While that may be partially true, it’s not the whole story. When two people make an agreement and shake hands, odds are both are satisfied. However, if that agreement was purely transactional, whatever one side gained, the other side had to lose. Win-Win gives satisfaction. More importantly, win-win converts a distributive, transactional negotiation into an integrative, value-sharing one. It’s “expanding the pie” so that both parties get more than when they started. Essentially satisfaction becomes more than just a warm, fuzzy handshake.
Mistake #5 – Focusing on Price
Most salespeople operate under the assumption that “price” is the most important thing to their buyer clients. That’s not surprising, because, in a survey of buyers, 80% reported that they told their suppliers that very thing. So it follows that sellers hear that all the time – “it’s the price, the price, the price!” However, when asked, “What is the most important thing to you in a negotiation?”, only 30% said “price.” A few respondents said, “personal relationships,” but the vast majority said that the most important thing to them was “value.” So, instead of focusing on price, focus on value.
Mistake #6 – Not Asking The Golden Question
One of the biggest “Aha!” moments in our Tactical and Competitive Negotiating Seminar comes after one of the practice negotiations. Our attendees learn that, while they had a whole list of problems and pressures weighing on them, their opponents were operating under their own set of issues and constraints. The point is that in every negotiation, be aware that there are always pressures… on the other side. Typically, we never consider the problems or pressures of others because we’re too busy focusing on our own. To counter, we suggest asking The Golden Question before (and during) every negotiation: “If I’ve got pressures on me, what are the pressures on the other side?” Considering that question help, you realize that, in virtually every negotiation, you’ve got more power than you think.
Ultimately negotiating requires give and take from both sides. Aim to create a constructive and polite interaction. Accordingly, your approach should cultivate goodwill regardless of differences in interests.