The 4 Steps To Negotiating Winning Business Deals

| By Mike Michalowicz (Google+)


How To Negotiate A Win, Two Hands Shaking

If you don’t know how to negotiate the right way, you don’t know how to negotiate at all.

Are you the person who always gets their way, no matter what? You are a horrible negotiator.

Do you offer your best deal right off the bat, only to get cut down even further? You too, are a horrible negotiator.

Or are you one of the few who maximize your gains AND maximize the gains for the guy on the other side? Then you are a master negotiator, and you already know this (everyone else listen up):

 

Be In The Range of Reason

For every situation there is a reasonable range of parameters. For simplicity sake we are just going to talk about price in this example, nothing else.

Let’s say we are talking about a box of chocolate (yeah, you heard me Forrest Gump). For this example, the range of reason for price is $5 to $12. If you ask for $100 for the chocolates, you are (way) outside the range of reason and the talks are over. You’re done. If you come in below the range of reason, say $4, you have compromised yourself. Again, you’re done.

Step #1: For each parameter in consideration, know the high end and low end of the reasonable negotiation parameters. This is the range of reason.

 

Be The First To Put It On The Table

The natural response to a negotiation situation is to wait for the other guy to speak up first. We want to see if he offers us what we expected. Or if we are lucky, he offers even more. But this is the wrong approach.

The first person to speak up, as long as it is within the range of reason, sets the starting point for the entire negotiation. If you say to me first, that you will offer me the box of chocolates for $11… while I may have been hoping you would say $2, I will likely think that while $11 is “a little high”, I will see if I can get you down from $11. Notice that we are NOT negotiating from a starting point of $2. Instead, we are negotiating from your starting point, $11.

Step #2: Be the FIRST to state the price (or other negotiating point), just keep it within the high-end of the range of reason.

 

Retreat A Little

Once you have set the starting point of the negotiation, be ready to retreat a little. The other side needs to feel like they are winning too. Now don’t be a push over, but retreating a little will make the other side feel victorious. And when they feel they are winning, you are winning too.

Step #3: Once you started the negotiations at the high end of the range of reason, let the other side push you around a little. But just a little. This makes them feel they influenced the negotiation outcome to their advantage… and that is a good thing.

 

Make Sure Both Sides Are Winning

When the deal is at hand, confirm that the other side is comfortable with the deal. This cements their commitment to the deal, and when they say they feel a certain way they will actually start feeling that way on the inside (that’s a little behavioral psychology judo for you).

Say something like, “I think we have a very fair deal here. Do you feel the same way?” When they say “Yes, we have a fair deal.” Shake hands, grab a drink and celebrate together!

Step#4: Negotiations are all about emotions. If both sides feel good going into a deal, the odds are both sides will come out of feeling happy too.

Did the blog help you? Great! I have a deal for you. . .

. . . OK, not really. But if you are that fired up now, you can CLICK HERE or HERE, for that matter.  The choice is yours.


Posted in Entrepreneur Strategies,

2 Responses to “The 4 Steps To Negotiating Winning Business Deals”

  1. Have you ever heard of the Humble Bundle Mike?

    A few years back some game developers decided to do an experiment. What would happen if we offered a bundle of games for “Pay what you want”. It worked, they made a LOT of money and they have done it over and over again.

    https://www.humblebundle.com/

    Just curious if you’ve ever seen anything like this before in other kinds of businesses. It works pretty well for computer games because they have a very low delivery cost and there’s loads of customers willing to pay $5 for 7 games.

    This post made me think of it because they take a very different approach to negotiation on price.

  2. onlinebusiness says:

    Yes negotiation is a key to success

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