3 Golden Rules of Negotiating

January 21, 2013|
3 Golden Rules of Negotiating

The art of negotiating escapes most of us, even good
salespeople, because few take the time to correctly understand the word
and follow the golden rules of negotiating.

The first and biggest error is a misunderstanding of the word. When I
ask people at my Closers workshop what the word “negotiating” means, I
get answers like, “how good a deal can I get” and “how cheap can I buy.”
For many people, it’s a process of painful tactics of stall and
overcome or a give and take mostly involving the surrender of price and

“Negotiate” comes from the Latin negotiatus, which is the past participle of negotiari,
and means to carry on business. This original meaning is critical to
understand because the goal of negotiating is to continue doing business
by conferring with another to arrive at an agreement.

So, scrap the notion that negotiating means lowering the price to
reach an agreement. A lower price does not make for a better deal; it
only makes for less margin for you and your company. Your goal is to
come to an agreement about a proposal, and the way to do this is to
build value in your offer. The solution your product or service offers
is the focal point of negotiations, not the price.

Here are three of my 12 golden rules, which I won’t allow myself to violate in any negotiation, whether simple or complex:

1. Always Start the Negotiations. You must initiate the
process because whoever controls the start of the negotiations tends to
control where they end. If you let the other party start negotiations,
you will be constantly giving up control, often without even realizing
it. For instance, when you ask someone what his project budget is, you
are allowing him to start the negotiations. You will then spend your
time chasing his number rather than finding the best solution. When I
sit down to work out an agreement on the numbers involved in the
decision, I will even interrupt to prevent the other side from
controlling the starting point. Sounds bizarre, but that is how
important starting the transaction is. I once had a client who wanted to
offer his terms upfront. I politely said, “Excuse me, I appreciate your
willingness to tell me what you can do and would like just a moment to
share with you what I have put together for you. If it doesn’t work,
then please tell me.” This allowed me to control the starting point.

2. Always Negotiate in Writing. I see so many
professional salespeople make the mistake of discussing and working on
the terms of an agreement without ever committing their ideas to a
written agreement. But the purpose of negotiations is to arrive at a
formal written agreement, not tell a story or spend time talking. From
the first moment I make a proposal, I refer to a document that is being
created in front of the client. It includes all the points of agreement
and becomes real to the prospective customer. Negotiating first and then
having to create a document adds unnecessary time to a transaction. But
if you build your written agreement as you negotiate, you are prepared
to ask for a signature the moment the decision to buy is made.

3. Always Stay Cool. The negotiation table can be
loaded with agendas, egos and emotions. Great negotiators know how to
stay cool, providing leadership and solutions, while the rest of the
room becomes insanely invested in personal agendas and useless emotions.
Crying, getting angry, name calling and blowing off steam may make you
feel good, but such behavior will not benefit you while negotiating.
When the rest of the room gets emotional, stay cool like Spock and use
logic to negotiate and close.