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How to Never Lose at Business Negotiations

Negotiation is part of business. Regardless of what we sell, there will always be negotiations with clients, vendors and even strategic partners. For many of us it can be overwhelming; how much information do we share and what do we hold onto when negotiating the best price, an upgrade or an earlier delivery date?

Leslie K. John just published How to Negotiate with a Liar  in the Harvard Business Review (HBR).  In her article she cites research that proves people lie “at least one or two times per day and that “judging from studies done in 1999 and 2005, roughly half of those making deals will lie when they have a motive and the opportunity to do so.” (HBR: How to Negotiate with a Liar, by Leslie K. John July-August 2016 Issue). business owners shaking hands

So if everyone is lying in negotiations – whether in business or in our personal lives – how do we detect those lies, protect ourselves and/or insure we’re getting the best outcome?

Leslie’s HBR article gives five methods for positioning ourselves better in negotiations. They are: “Encourage Reciprocity, Ask The Right Questions, Watch for Dodging, Don’t Dwell On Confidentiality, And Cultivate Leaks”.

The two methods that I found to be especially helpful in small business negotiations are:

  1. Don’t dwell on confidentiality. Leslie cites that dwelling on confidentiality actually results in distrust. She writes, “Research shows that when we work to assure others that we’ll maintain their privacy and confidentiality, we may actually raise their suspicions, causing them to clam up and share less.” The takeaway from this is, when you approach a negotiation with, “we never ever share your information -ever. Everything you say is confidential, I pinky-promise. And I’ll even sign an ironclad NDA” you could be subconsciously telling the other party they have something to worry about.
  2. Ask the right questions.   All of my sales and marketing training emphasized the right and the wrong way to ask questions in negotiations. And this point was an excellent reminder of how to get the truth by asking the right questions, the right way. Leslie suggests not being shy about asking direct questions. If you’re negotiating a contract with a potential client and are trying to get a feel for their budget, ask: “” So are you thinking of spending $10,000 on this project?” as opposed to “How much are you thinking of spending?”. I’ve used this strategy myself and you’d be amazed at how well it works. With the first question, they’ll almost always respond with, “no more like $5000”. One time I got, “No, I was thinking more like $20,000”!  As opposed to the second question in which I inevitably hear, “I’m not sure”. Leslie also recommends asking pessimistic (“You won’t be able to deliver on time, will you?) rather than optimistic questions (“You’ll be able to deliver on time, right?”) to get a more truthful answer.

The author cites research on lying and negotiation and gives in-depth strategies for positioning yourself to get closer to the truth in any negotiation. Read the entire article here.

 

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