Introduction There are three parts to this article: This guide is a one-stop shop to understand the RFP scoring process … Continue reading How do Procurement Score RFPs, Why as a Vendor do you need an RFP Scorecard & How to Create OneREAD MORE
What Are Negotiation Tools?
Millions of us have jobs that require us to negotiate in some form every day. Yet, most of us don’t know how to negotiate effectively or how to use tools to aid the negotiation process.
Knowing how to negotiate, what it’s really all about, and what techniques to use will increase the quality and value of the outcome. So, read on to learn a little more about what negotiation tools are, and more importantly, how they can help you to succeed in any negotiation.
What Is Negotiation?
Negotiation is the ability to open up a dialogue between various parties, in an attempt to reach a mutually agreed resolution.
Whether you notice it or not, negotiating happens in nearly all aspects of life. For example, deciding which restaurant to meet a friend, or trying to get your kids into bed are both forms of negotiation.
Why Are Some People Better Negotiators Than Others?
Like everything in life, negotiating comes more naturally to some, but not all of us. There are however common traits that lead to a poor outcome. For example, being woefully underprepared. Failing to do your research, being too tactical, or just a basic lack of essential skills causes people to fall short.
Fortunately, many of these issues can be fixed easily. You can learn how to negotiate consistently better outcomes by discovering tips, techniques and tools to help you prepare. For example, follow these four simple steps for a better negotiation every time:
- Understand the context and define your objectives
- Define a timeline and key milestones
- Think through all the negotiation variables and your best/worst outcomes
- Keep track of issues as they come up and resolve them
You can find a Negotiation Workbook that will help you get it right every time here: https://higgle.piscari.com/
What Types of Negotiation tactics Might You Meet?
There are some tactics that crop up frequently when negotiating. Here are just four common ones.
- The Table Thumper: [preceded by a loud bang on the table] “This is outrageous and not what we’d agreed!” This bullying negotiator will use emotion and anger to overwhelm you. They want you to doubt your own memory of what was agreed and cave in.
- The Low-Baller: “Your services aren’t worth anywhere near $50,000, you’re deluded. The most we’re going to pay is $30,000. Take it or leave it, I’m busy.” This is a classic negotiation-anchoring technique, rather than what they’re ultimately prepared to pay.
- The Deadline Maker: “We close our supplier shortlist at 9.30am tomorrow, you’d better sharpen your pencils if you want to be in with a chance.” Deadlines can force you to make irrational choices. They may be artificial or real.
- The Last-Minute Chipper also known as the ‘Columbo Negotiator’: “Ooh, just before you leave, there’s just one more thing…” You think you’re close to the finish line, so you’ll accept anything to get it done.
Negotiation Tools and Techniques
Here are some techniques and tools that will make you a better negotiator every time.
3 Negotiation Techniques
- Do Your Homework on your counter-party – there’s nothing worse than a negotiator who has no clue about the business they’re selling to.
- Your Negotiation Style – decide whether your looking to collaborate or play hard-ball. All the research indicates that collaboration and give-and-take delivers consistently better outcomes.
- Improve the Quality and Value of the Outcome – Plan out your negotiation carefully. Think through all the negotiation variables. Work out where you can concede and where you can create more value.
3 Negotiation Tools
You don’t need to have every negotiation figured out on your own and there are plenty of optional planning tools available to help you along the way.
- ZOPA (Zone of Possible Agreement)
- MDO-LAO (Most Desirable Offer and Least Acceptable Offer) https://www.cips.org/supply-management/opinion/2021/april/how-to-get-what-you-want-in-a-negotiation/ )
- BATNA (Best Alternative to a Negotiated Agreement)
Learn More About Being A Better Negotiator
There are many insider secrets to negotiation that we’ve pulled together for you, along with everything you need to know about selling to procurement professionals and various other courses designed to help you strengthen your existing skills.
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