Negotiation Skills
Presented By:
© Sigma Management Development Limited 2005
PAUL DAVIS
1
© Sigma Management Development Ltd 2004
Negotiating Techniques
• IF you give me a bit of what I want THEN I can give you
a bit of what you want
• Always trade values (£)
TO YOU
Low Value/
Cost (easy to
give)
High Value
GIVE
GIVE
TO THEM
High Value
(worth a lot)
Low Value/Cost
• Never trade a value without getting one in return
© Sigma Management Development Limited 2005
2
The Negotiation Framework
COMMIT
OFFER
BARGAIN
BARGAIN
PROPOSE
PROPOSE
DISCUSS
DISCUSS
COUNTER
OFFER
PREPARE
PREPARE
REQUIREMENTS
“BUYER”
© Sigma Management Development Limited 2005
“SELLER”
RESEARCH
3
Characteristics Of A
Skilled Negotiator
• Preparation and planning skills
• Knowledge of subject matter being negotiated
• Ability to think clearly and rapidly under pressure and
uncertainty
• Listening skills
• Judgement and general intelligence
• Integrity
• Ability to persuade others
• Patience
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Research
•
•
•
•
•
•
Company, Competition, Likely Requirements
Decision makers & Influencers
The Politics & Barriers
The Personalities
People Behaviours
Buying Motives
ALWAYS BE PREPARED
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Prepare Variables
VARIABLE
MAX £
MIN £
MAX
MIN
EQUIPMENT
SERVICE
DELIVERY
TERMS
TOTAL PACKAGE £
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Negotiation Variables
Grade your variables
High
Medium
Low
-
Important to you to obtain
Potential “walk-aways”
More of these
Hope to achieve the top end
of your entry point
Willing to trade near to your
exit points
Not a give away
NB: then view them from the other party’s
perception
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The Negotiators Exit Prices
Overlap
100
110
120
Buyer’s negotiating range
Settlement
range
110
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Seller’s negotiating
range
130
8
The Negotiators’ Exit Prices
Meet
Buyer
100
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Seller
120
130
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Emotional Buying Motives
LOGICAL
EMOTIONAL
Usage
Specification
Functionality
Value
Efficiency
Performance
Safety
Flexibility
Quality
Price
Personality
Prestige
Fear
Novelty
Tradition
Price
Status
Promotion
Good Rapport
Brand
NEEDS
WANTS
© Sigma Management Development Limited 2005
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The Negotiation Framework
COMMIT
OFFER
BARGAIN
BARGAIN
PROPOSE
PROPOSE
DISCUSS
DISCUSS
COUNTER
OFFER
PREPARE
PREPARE
REQUIREMENTS
“BUYER”
© Sigma Management Development Limited 2005
“SELLER”
RESEARCH
11
Propose
AIM
HIGH
Your proposal is your
maximum opening stance
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Discuss
IF…….
THEN
OFFER….. COUNTER OFFER
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Components of a Proposal
Components of a proposal
Condition
Nonspecific
Offer
Nonspecific
Specific
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Distinction Between
Proposals and Bargains
Proposal
Bargain
Condition
Non-specific or Always Specific
specific
Offer
Always nonspecific
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Always Specific
15
Constructive Debate
•
•
•
•
•
Statement
Assurance
Question
Summarise
Demonstrate Listening
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Examples Of Destructive
Debate Styles
•
•
•
•
•
•
•
Threat
Attack
Blame
Point Score
Interrupt/block
Assume
Irritate
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Signals
• “It would be extremely difficult to meet that delivery date”
• “We would not normally extend our credit facility”
• “It is highly unlikely that my boss will agree to a free
upgrade”
• “As things stand our prices must remain as listed”
• “I can’t give you a better discount on your current
volumes”
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Signals
• “It would be extremely difficult to meet that delivery date”
• “We would not normally extend our credit facility”
• “It is highly unlikely that my boss will agree to a free
upgrade”
• “As things stand our prices must remain as listed”
• “I can’t give you a better discount on your current
volumes”
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Proposals
Use of Brevity
• It might be possible to do something
• We could perhaps look at that
Key Message
Verbage detracts from the message, and
often gives your opponent the view you are
in a a weak or uncomfortable position
© Sigma Management Development Limited 2005
20
The Negotiation Framework
COMMIT
OFFER
BARGAIN
BARGAIN
PROPOSE
PROPOSE
DISCUSS
DISCUSS
COUNTER
OFFER
PREPARE
PREPARE
REQUIREMENTS
“BUYER”
© Sigma Management Development Limited 2005
“SELLER”
RESEARCH
21
The Negotiation Framework
COMMIT
OFFER
BARGAIN
BARGAIN
PROPOSE
PROPOSE
DISCUSS
DISCUSS
COUNTER
OFFER
PREPARE
PREPARE
REQUIREMENTS
“BUYER”
© Sigma Management Development Limited 2005
“SELLER”
RESEARCH
22
Structured Questions
Ask open questions & listen
OPEN
What
Who
When
Why
Where
How
To What Extent
To What Degree
How Important
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CLOSED
Do
Can
Could
Would
May
Will
Shall
Should
Is
Does
Might
Did
Have
Has
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QUALIFY
ASK 1ST OPEN QUESTION
LISTEN TO IMPLICATION IN ANSWER
BASE NEXT QUESTION ON ANSWER TO FIRST
LISTEN
REPEAT
HIT HOT SPOT
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UNTIL
NOT IMPORTANT
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The Art of Listening
• The person speaking is not necessarily the person in control
• Listening/talking is the bilateral process
• Listening includes watching
Impediments to Overcome
• Resistance to change
• Thinking one’s own thoughts instead of listening
• Wishful hearing
• Making unwarranted assumptions
• Habitual secretiveness
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TALKING
BIAS
ASSUMPTION
EMOTIONS
LISTEN
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ASSIMILATE
REHEARSE
REPLY
REPLY
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Summarising
• Summarise throughout (every
three minutes)
• Use their language not yours
• Seek agreement and clarification
• Test any assumption
© Sigma Management Development Limited 2005
27
The Negotiation Framework
COMMIT
OFFER
BARGAIN
BARGAIN
PROPOSE
PROPOSE
DISCUSS
DISCUSS
COUNTER
OFFER
PREPARE
PREPARE
REQUIREMENTS
“BUYER”
© Sigma Management Development Limited 2005
“SELLER”
RESEARCH
28
BEHAVIOURS
DOMINANT
FIGHTER
LEADER
HOSTILE
WARM
THINKER
HELPER
SUBMISSIVE
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ABOUT YOUR CUSTOMERS
FIGHTER
DOMINANT
Arrogant
Aggressive
Ruthless
Dictatorial
Opportunistic
Conceited
Impulsive
Doesn’t allow
mistakes
LEADER
Fair minded
Firm
Decisive
Motivational
Optimistic
Open
Sees others’ points of view
Allows 1 or 2 mistakes
HOSTILE
WARM
Negative
Pedantic
Bureaucratic
Cautious
Nit-picking
Cold
Defensive
Blocking
LOGICAL
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THINKER
SUBMISSIVE
Gullible
Deferential
Self-effacing
Passive
Submissive
Ineffective
Manipulative
Weak
HELPER
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PEOPLE BEHAVIOUR
and how to
deal with them
DOMINANT
Remain calm
Be assertive
Ask open
questions
Pace up
Be well prepared
Be well prepared
Mirror behaviour
HOSTILE
WARM
Pace down
Ask open questions
Involve
Be patient
Don’t “sell”
Be directive
Keep focused on the topic
Ask closed questions
Put agreements in writing
Check progress
Check reality of commitments
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© Sigma Management Development Limited 2005
SUBMISSIVE
Rapport Building
GET ON THEIR WAVELENGTH




Big Picture
Or Detailed
Lots of Options Or Follow Procedures
Informal
Or Formal
Free Wheeling Or Take Control
DON’T TREAD ON TOES OF BELIEFS



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Politics
View of the World
Behaviours
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Rapport Building
FIND THEIR HOT BUTTONS
What’s important to you?
 What do you want from…..?

SPEAK THEIR LANGUAGE




© Sigma Management Development Limited 2005
Speed
Volume
Inflection
Use their words
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BODY LANGUAGE IN
NEGOTIATIONS
•
Quotation from Sir John Collins, Dixons
Chairman:
“I would never have a serious discussion
or negotiation without seeing somebody
because the body language is every bit
as important as what you are saying to
me”
Times Interview September 2002.
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COMMUNICATIONS
7% Verbal
15% Dramatised Verbal
25%
Visual
45%
Verbal & Visual
Body Language
10%
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20%
30%
40%
Retention
50%
BODY LANGUAGE
• 50-70% OF OUR COMMUNICATION
IS NON-VERBAL
• READ IT…..USE IT!
• LOOK FOR CLUSTERS
• LOOK FOR CONGRUENCY OR NONCONGRUENCY
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ROOM LAYOUT
• DESKS?
• CHAIRS
• POSITIONS OF POWER?
• COMFORT ZONE/BODY SPACE
• LOCATION?
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Negotiation Tactics &
Styles
Key Message
A TACTIC RECOGNISED IS A
TACTIC DISARMED
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38
Styles of Negotiation
•
•
•
‘Tough-guy/Soft Guy’ duo who alternates between
aggression and kindness to tempt the negotiator into
dealing with the, ostensibly, softer guy.
Over-valuing a feature of the deal - it could be future
profits, for instance - and using this to claim a higher
price for themselves.
Setting pre-conditions for negotiation so as to gain
ground before the actual negotiations being managements, for instance, demand that a strike cease
before they will negotiate, governments demand a return
to the status quo before they will negotiate a disputed
event (seizure of territory etc).
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39
Styles of Negotiation
•
•
•
High initial demands to push the area of settlement
towards themselves and to shock the other negotiator
into reassessing his expectations.
Making threats (veiled or blunt) to coerce the other
negotiator into movement - sales people often warn that
unless the order is filled today they cannot guarantee
supply; union officials often tell management that they
must meet the union demands or face the prospect of a
long strike.
Setting pre-emptory deadlines that they know can
hardly be met in order to hustle the other negotiator into
quick decisions, or, sometimes ominously, to provoke
themselves into a preferred choice of action - ‘unless you
withdraw your forces by 11 a.m. today, a state of war will
exist between us’.
© Sigma Management Development Limited 2005
40
Negotiating Rules

Check your variables

Aim high

Give way slowly


Never give a concession without one
in return
Listen, don’t talk
© Sigma Management Development Limited 2005
41
Negotiating Rules

Use structured questions

Never trust your assumptions

Use power gently

Confirm the agreement

Achieve win-win
THERE IS ALWAYS ANOTHER DAY
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SPECIALISTS IN PARTNERING AND SUPPLY CHAIN RELATIONSHIPS
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