A key element in effective negotiation involves learning what is “key” to negotiation. It’s not redundancy. Its truth.
The process to learn effective negotiation skills is like an attempt to climb a sheer rock wall. It can be done, it has been done, but the sooner one identifies solid places to put his foot or grab a ledge, the more quickly – and more safely – the wall is scaled. Similarly, the sooner the “key” concepts are learned, the quicker and safer the path to a successful negotiation.
Perceptions are one of the foundational, key issues in successful negotiation. Learn the way perceptions mold the process and you will learn how to use them to your advantage, every time.
Perceptions are present in a negotiation whether the parties want them to be or not. The fact is, whether a negotiation is happening over the telephone between two different parties on two different continents or whether it is happening in a crowded, dimly lit lounge, there will be perceptions of the opposing parties and those perceptions will influence the process and the outcome.
In a previous article, I talked about the attitudes and actions of negotiators that can help or hinder the reaching of a successful agreement. But there is more to negotiation skills than just the perception of the other party’s attitude. They include the perception of their perceptions.
What does the other party perceive you will do? What are they going to do if you surprise them? What are they going to do if you play it exactly as they would have planned? These are questions that will arise in the mind of the parties. The real issue here is whether you can influence the other party’s perceptions before they act on them.
The fact is, you can. You can do it honestly and legitimately and if you are good, the other party will have no idea it was planned.
There may be a limitless number of perceptions the other party will have of you, and here we will address a few. You will learn how to actively influence almost any perception that could surface in a typical negotiation.
1. Accepting the first opening offer – consider what will happen in a negotiation when the buyer makes an offer, and the seller immediately takes it. What is the feeling (perception) created in the buyer? Does the buyer think she just made a good deal, or does she become worried she just offered too much? In truth, the buyer will often react with fear when her offer is immediately accepted. She wonders if she was too aggressive. Too positive. Too hopeful. She wonders if maybe she really did not know the true value of the item for sale and that is why the seller had no hesitation to accept.
Learning successful negotiation skills will show you that accepting the opening offer is often a bad idea. This is because people expect to negotiate, even if it’s only a little. So if the seller accepts without complaint or condition, it creates fear and anxiety in the buyer’s mind that there is something he doesn’t know about, something that should have been researched. Otherwise, why no debate over the price? Once a buyer feels this way, the gloves come off. Then the parties are in a fight mode because the buyer has this gnawing feeling that he was just taken… and doesn’t even know why.
Become an astute seller by not accepting the opening offer, even if you want to. This is the time to get creative. It may be that you are going to come back requesting a small concession of the buyer, something like a shorter escrow or a larger deposit or a higher interest rate. Whatever it is, significant or insignificant, ask for a concession, even if you like the present agreement as it stands.
This methodology influences the other party’s perceptions (in this case, the buyer). It tells them (without actually telling them) you are still moving toward a deal, and that they don’t need to worry that they just fell for a trap you set.
Remember: negotiation is a process.
2. Making concessions – consider how the opposing party would feel if you made absolutely no concessions to your terms of the deal. How will that influence their perception of you? Will it make the other party defensive?
Concessions are necessary; the other side expects them. If you don’t make them, even several of them, they will sense you are not going to budge on anything. And that is NOT what you want them thinking, even if it’s true.
Have you ever known a seller to present something for sale, and after he got a good offer, he raised his price? The typical reaction of buyers in this situation is something between bewilderment and anger, and rightfully so. To take this position is simply insulting to the other party.
Well, making zero concessions isn’t much better. To work toward a successful deal, you have to have concessions built into your negotiation plan. In other words, you have to have concessions pre-planned, concessions that you will make as the process moves along.
Don’t overlook this point. It’s very important. The main reason to have concessions planned is simply this: you don’t get any credit for concessions you don’t bring up. If you make your offer and load everything you would possibly give in to within that offer… you have nothing to work with down the road. You can’t deplete your ammo at the first sight of the enemy or you’ll have nothing to shoot with later on.
So how to do this? Make a systematic plan on paper or in your mind of what you will give, what you can concede. Put in order of priority. Then, as the negotiation proceeds, pull out the smaller, less important concessions first. The other side will push again, asking for more. Proceed to the weightier ones, the ones that cost you more. But each time you give up something, you will make certain you are getting what is important to you in the deal, and you are getting closer and closer to a successful completion.
Putting the plan into action is what it’s all about. And there’s no way to put a plan into action if there isn’t a plan. So give yourself a huge advantage and before you get into any negotiation, large or small, plan how you will influence the other party’s perception of you and how you are going to negotiate those perceptions.
Try it; you’ll perceive the difference right away 🙂