Most people imagine negotiations as winner take all scenarios where the taker is the meanest wolf on Wall Street. While hard negotiators exist, the reality of the business world is that most negotiations are very far from what Hollywood would have us think. It starts with the basic fact that if you’ve made it as far as a negotiation with a potential client, you’ve found at least some common interests. And those common interests can be enough to produce win-win situations.
In part one of my Business Masterclass last Monday, we discussed pricing and how swappable items can be a useful tool for differentiated pricing (i.e. prices that are coherently aligned with the market, but higher). Next Monday, we’ll discuss Harvard’s principled negotiation method and how swappable items can be an excellent negotiation technique, especially when clients are trying to get us to drop our price or when we want to increase our fees with an existing client.
Facing the Facts
While negotiation is a skill everyone can acquire, there is no magical formula. Negotiation takes planning, practice and trial and error. However, there are few facts we must all face if we wish to become effective negotiators:
1) It might not be a negotiation. Imagine a large international translation agency that has hundreds or even thousands of language professionals working for them. When they ask a potential new language professional for “their best rate,” that’s not a negotiation. The agency has too much leverage. Way too many competitors will be happy to underbid you. If that’s the situation you’re in, you don’t just need to work on your negotiation skills, you also (and perhaps more urgently even) need to work on marketing your service to better-paying clients or “move upmarket.”
2) If you’re still selling during the negotiation phase, you’re not really negotiating. Selling and negotiating are two different parts of the puzzle. First, you sell your service at your desired price. Then you negotiate the terms of your service. If you’re still selling in the negotiation phase, there is simply too much at stake for you and you’re bound to make mistakes. That’s where techniques like swappable items come in handy because they allow you to center your negotiation around secondary services while anchoring the price of your core service. More on this Monday, if you still haven’t signed up, you’re still in time to do so here.
3) You will need to have a plan, no matter how tedious that sounds. Successful negotiations require a certain reasonable degree of planning. Once again, that’s where swappable items can come in handy, as they help you save face before a strict “no” from the other party.
4) There are no magical formulas. You can study every negotiation technique in the books, but there is no single one-size-fits-all formula that is guaranteed to lead to success. Instead, there are more or less effective strategies and techniques that you will need to work hard to adapt to your business and personality type.
5) Learning to negotiate effectively is hard work: Negotiation is a skill that pretty much anyone can acquire, but only those who are truly determined to become effective negotiators will master it.
If you can live with these five “harsh” realities, then chances are you’re ready to start your journey toward becoming a skilled negotiator. If that’s the case, I’d love to hear from you. So join us on Monday’s Masterclass. If you missed class one, you can still catch the recording and post questions. Remember every journey starts with the first step and The Biz Muses would love to help you take it!