Whether it’s how much you’re paying for that used couch off craigslist, who pays on the first date, your affiliate partner revenue share model, your childhood curfew, or a much awaited salary raise, the bottom-line is that everything in life is negotiable.
Unbeatable negotiators not only succeed in business and life, but they have an incredible amount of fun in the process! Zach Garippa, Founder and CEO of Negotiatus, a B2B ecommerce platform, shares the eight key strategies his team uses to negotiate and help businesses save on average 20% of their supply and product costs.
#1 Realize that you’re not stuck with the status quo: Old habits are hard to break and new habits are hard to make, but that’s no reason to fear taking a step out of your comfort zone and starting a negotiation talk. There is power in the simplicity of asking.
#2 Always be prepared and have data: Do your homework beforehand to find out what the market generally values similar offerings. Know what your target outcome is and make an educated estimate of what your counterpart’s motivations are and their target outcome in the negotiation. The range between your target and their target is the range of possible outcomes. By identifying your own best alternative to a negotiated agreement, you can know when to compromise or when it’s time to walk away. Prepared with these three data points, you’ll know how to make a fair request―and identify an unfair counter-offer.
#3 Make the first offer and set the initial benchmark: As humans, we often fall victim to cognitive bias of relying too heavily on initial information we’re given. By anchoring the starting point of the negotiation, you can heavily influence a negotiation’s outcome in your favor. Although you may be anxious that a very low or high offer will offend, you’ll be surprised at how much room there really is for negotiation!
#4 Frequency is as good of a friend as volume is: A hit-and-run deal is one thing, but if you’re going to be creating a long-term relationship, such as making a purchase on a regular basis from the same supplier, leverage that.
#5 Be transparent: Sure, you can keep some things confidential, like the identities of other options you’re currently vetting, but acting too coy will be off-putting and can quickly lead to communication break-down. Instead, be simple, direct, and transparent. Often, when you give information, you will also receive valuable information in return that helps you better understand your counterpart’s motivations and underlying goals. When all else fails, a simple and genuine “Here’s where I stand. Here’s where I’m looking to be. I’d like for us to work together. How can we make this situation into a win for both of us?” can usually spur a mutually beneficial resolution.
#6 Know your worth: Understand the value you or your business brings to the table. You’re not asking for a favor. You’re negotiating a transaction where your exchanging value between parties. For example, when negotiating supply costs, you’re asking to be a regular source of demand for the supplier, and simply finding out what the supplier thinks that’s worth.
#7 Explain how both parties can win: Most negotiations in business are about finding a mutually beneficial arrangement. Think beyond the single-dimension of dollars. For example, if a salary raise is out of the question, could you negotiate more paid vacation days, a rotation in a department you’d like to build expertise in, or a title promotion?
#8 Don’t be hostile: Attitude, as they say, is everything. Save the drama for your Law & Order binge fest. Even if a coarse, let’s-get-down-to-brass-tacks approach wins you a good deal, there’s a decent chance it won’t win you a second deal. Remember that understanding all parties’ underlying motivations, and ensuring your counterpart wants to work with you in the future, is a big part of what’s at stake. Rather than sporting a stern poker face, you can increase your negotiating power by smiling, listening with an empathetic ear, and approaching concessions with grace and consideration. By keeping an open mind and expanding the range of possible outcomes, you can often agree upon a more beneficial outcome than you initially planned for.
This post was written and edited by SoGal Ventures team - Elizabeth Galbut and Pocket Sun.