Effective negotiation is dependent on a number of key factors.
One of the least discussed, yet most essential, is mutual trust and
understanding. Without these, the probability of successful negotiations
is significantly minimized. Too often, negotiators enter into a
negotiation with an adversarial relationship, and many negotiators make
very little attempt to openly and adequately communicate with their
counterpart.
Over the past three plus decades, I have successfully negotiated numerous contracts and agreements in a variety of different industries. Without a doubt, negotiations go best when they begin casually, with the negotiators taking some time to get to know their counterpart. Most professional negotiators understand this reality, but sometimes a negotiator "postures" for either political or other reasons. When that happens, it often creates an aura of frustration, and negotiations often break down into personality conflicts.
The most effective negotiations always begin with negotiators communicating openly. While some negotiators like to "play hardball," it is almost never productive. Open communication requires that negotiations follow certain steps. These include:
(1) Both sides fully explain their needs and requirements. If there are budgetary issues, these should be explained upfront, so that there are no misunderstandings.
(2) Both sides need to be honest with each other. Being honest doesn't mean giving in to everything the other side wants, but understanding fully what is be requested, and why.
(3) If this is either a hotel or food and beverage negotiation, the facility must understand what is being asked for. Are there alternatives that will make it less expensive for the facility, thus permitting it to pass along that savings to the prospective client?
(4) In the hotel/ food and beverage scenario, if a hotel believes it cannot deliver what is being requested, at the quality level and price point requested, it should state that upfront.
(5) In Real Estate, how well one's agent negotiates is a major factor, in how well that real estate professional, will serve his client. It begins with being upfront with the client, so expectations are realistic. Homeowners are often tempted to initially list their homes at some, unrealistically high, pie - in - the - sky price. This is either because the homeowner, himself, is unrealistic, or emotionally attached. Or, often, has met with an agent, who proposes or suggests a higher than realistic Listing Price, in an attempt to obtain the listing. Since the reality is, houses generally get their best offers, with a few weeks of the initial listing, wouldn't it make sense to maximize one's chances? Also, when offers arrive, homeowners should way the Opportunity Cost of money, and that every month, a home goes unsold, mans more expenses, including taxes, maintenance, insurance, and utilities. If one wants the best price, in the shortest period, with the least hassle, carefully select a Realtor, who is a quality negotiator, and listen to him!
(5) If either side is negotiating with more than one party simultaneously, that should be fully disclosed. The negotiator should also explain why this is being done.
(6) When one side is unreasonable, negotiations usually fail. Often, the worst case scenario is that the two sides agree, and that the deal is so one-sided that the other side is unable to deliver when and what is needed and was promised.
(7) Negotiators should only promise what they can deliver.
(8) Negotiators should have sufficient authority to make the necessary agreements and frameworks of the deal. Too many levels of negotiation is generally catastrophic to a good end result.
(9) Negotiators should be direct and to the point.
(10) Specific needs and/or requirements must be disclosed upfront.
(11) Each side should submit their requests for concessions from the other.
(12) The best result of any negotiation is when it is "win-win."
(13) The best result of any negotiation, in the long term, results in a deal that is fair to both sides.
Most individuals are not good negotiators. Amateur negotiators often destroy doable deals! Parties to negotiations should both use professional negotiators, who understand what needs to be done to "hammer out a deal." Please read my Ezine Articles on various aspects of negotiating.
Over the past three plus decades, I have successfully negotiated numerous contracts and agreements in a variety of different industries. Without a doubt, negotiations go best when they begin casually, with the negotiators taking some time to get to know their counterpart. Most professional negotiators understand this reality, but sometimes a negotiator "postures" for either political or other reasons. When that happens, it often creates an aura of frustration, and negotiations often break down into personality conflicts.
The most effective negotiations always begin with negotiators communicating openly. While some negotiators like to "play hardball," it is almost never productive. Open communication requires that negotiations follow certain steps. These include:
(1) Both sides fully explain their needs and requirements. If there are budgetary issues, these should be explained upfront, so that there are no misunderstandings.
(2) Both sides need to be honest with each other. Being honest doesn't mean giving in to everything the other side wants, but understanding fully what is be requested, and why.
(3) If this is either a hotel or food and beverage negotiation, the facility must understand what is being asked for. Are there alternatives that will make it less expensive for the facility, thus permitting it to pass along that savings to the prospective client?
(4) In the hotel/ food and beverage scenario, if a hotel believes it cannot deliver what is being requested, at the quality level and price point requested, it should state that upfront.
(5) In Real Estate, how well one's agent negotiates is a major factor, in how well that real estate professional, will serve his client. It begins with being upfront with the client, so expectations are realistic. Homeowners are often tempted to initially list their homes at some, unrealistically high, pie - in - the - sky price. This is either because the homeowner, himself, is unrealistic, or emotionally attached. Or, often, has met with an agent, who proposes or suggests a higher than realistic Listing Price, in an attempt to obtain the listing. Since the reality is, houses generally get their best offers, with a few weeks of the initial listing, wouldn't it make sense to maximize one's chances? Also, when offers arrive, homeowners should way the Opportunity Cost of money, and that every month, a home goes unsold, mans more expenses, including taxes, maintenance, insurance, and utilities. If one wants the best price, in the shortest period, with the least hassle, carefully select a Realtor, who is a quality negotiator, and listen to him!
(5) If either side is negotiating with more than one party simultaneously, that should be fully disclosed. The negotiator should also explain why this is being done.
(6) When one side is unreasonable, negotiations usually fail. Often, the worst case scenario is that the two sides agree, and that the deal is so one-sided that the other side is unable to deliver when and what is needed and was promised.
(7) Negotiators should only promise what they can deliver.
(8) Negotiators should have sufficient authority to make the necessary agreements and frameworks of the deal. Too many levels of negotiation is generally catastrophic to a good end result.
(9) Negotiators should be direct and to the point.
(10) Specific needs and/or requirements must be disclosed upfront.
(11) Each side should submit their requests for concessions from the other.
(12) The best result of any negotiation is when it is "win-win."
(13) The best result of any negotiation, in the long term, results in a deal that is fair to both sides.
Most individuals are not good negotiators. Amateur negotiators often destroy doable deals! Parties to negotiations should both use professional negotiators, who understand what needs to be done to "hammer out a deal." Please read my Ezine Articles on various aspects of negotiating.
No comments:
Post a Comment