Podcast — The Art of Negotiation

Hey everybody, I want to talk to you about the art of negotiation. The art of

negotiation. Whether you're selling in a sales negotiation, in a marketing role or

a business owner, you will need to master the art of negotiation. And

negotiating is tough and I'm going to walk you through some of the things that

I've picked up about the art of negotiation. I declare credit here by

the way, these are some of the tips I've learned from Chris Voss who is an FBI, or

was, an FBI hostage negotiator. And Jim Camp who has been for a gazillion years, has

been a financial negotiator with big city deals, but also he's negotiated with

the infamous IRS. So these guys are pros at negotiating. So I'm going to walk you

through some of the things that I've picked up and I've found to work in

negotiations. And I've been in some big ones, but this can also apply to

literally a quote for a little job as well as a big deal. So number one, you've

got to get your emotions under control. Your need for the deal could undermine

your ability to get the deal. We go in there so desperate to want it that it

makes it very difficult for us to see clearly, it makes us difficult to think

clearly, and it makes it very difficult for us to hear what our customers are

saying. And that is important in a negotiation because if our customers are

saying things, they're giving us indications of what is stopping them

closing, what's stopping them agreeing, but also it's showing us why they

want to do the deal. Why is this negotiating happening? And these are

signals and tools we can use to help us move forward, but we have to have our

emotions in check. So that's really important that we have our emotions

under control. The next one is, and some of you might go, well negotiations about

creating win-win. It's not about creating a win-win, it's about neither side losing.

And that's a real difference. Now you lose by closing a deal at the wrong

price, closing a deal at the wrong terms, or you helping the client not reach the

deal with you. So you get that? Closing the deal at the wrong price, closing the

deal on the wrong terms, or helping the client not make the decision. So

they're the three things that you could fail and lose in that negotiation.

Losing the deal itself will not be a loss, and I'll show you why in a second.

But there's also, you've got to understand how the client loses. So if

you've got a product you can see the value it can bring to that client, you

have to understand what the client has to lose by not closing this deal. How do

they feel about the deal? You need to understand that. If you want to

not lose in this negotiation, you need to understand how the client feels. Then you

also need to understand another thing. If they can't go for the deal, if they

can't make a decision for the deal, what is your alternative? What is your

alternative? So it's not about win-win, it's about nobody losing. If you believe

in your product, if you believe in your service, a loss for the client is

them not taking the deal. So you have to understand what it is that they will

lose out on. Your losses are not getting the right price and not getting the

right terms. And of course if you do things that actually helps the

client decide, this is not a great decision. So coming to what is your

alternative deal? You're going in there to close this quote or this proposal

you've put together, but what happens if they want to unpick it, they

want to change it, they want to negotiate price. What's your

alternative deal? Not where are you prepared to go, because if you

know where you're prepared to go, you will go to it. What's the second deal

that you're prepared to offer? So not your bottom stop, what's the second

deal that you'd be happy with? What's the second deal you'd be happy with?

Because I assure you, closing a deal at the bottom is not a great outcome for

you. If you want to build a sustainable business, going to the bottom is not the

right frame of mind for your mind to be thinking in. It's not the great way of

thinking about the deal. What's your second deal? What's your alternative deal?

So you need to know what that is before you go in there, because that's your line.

That's where you go to, and you can work between those two parameters. So this is

the deal you want, and this is the deal that you're prepared to accept. Your

alternative deal, not your bottom deal, your alternative deal. Remember mindset

in negotiation is massive, so that's really important that you know those two

spaces so you can fluctuate between the two. Next one, empathy. Now this is Chris

Voss. Chris Voss has got some great books on this. He calls it tactical

empathy, and this is the principle of having a conversation with your customer

to draw out how they feel about this situation, and why they're

negotiating, why they want to negotiate, why they want the product or service

that you're offering, and what their objections are. And you're not there to

counter them, you're there to listen to them. Now in a negotiation, people will

be negotiating with, as we all do, we have what we really want, and what we're

prepared to say. Often people will start talking about things in a particular way

based on what they tell you that they want. In the empathy

process, you can start to see and draw out of them how they really feel,

what they really want, and also what matters to them about the deal. So

you can start to think about, as part of practicing this empathy, where their

motivations are, where their emotions are, where their feelings are about the

deal. And just like, you know, there's a price we want, and there's a price that

we would live with in the classic sense of negotiation, when you practice empathy,

people will start to drift off the set lines,

they'll start to drift away from their script, shall we say, of what

their counter proposal is, and they'll start to show you, you'll get little

inklings of where they're prepared to go, and where their space for

manoeuvre is. So empathy matters in negotiation, not to disagree, just to

listen, repeat back to them, so that you understand what they're saying. It

helps build rapport, but it helps you pull people away from where their

lines are, and their scripts are, so you can see where their real lines are. Just

remember also, it's important to notice that, and I can tell you about this with

one particular company, I know a particular company that even if they're

happy with the price, they will negotiate, and they will push on the price at least

three times, they will challenge the price three times, even if they're happy

with the price. So it's important that you understand that the negotiation

might just be a process, it may not mean there is actually an objection, there

might not be a roadblock to the deal, some people might just be challenging

you to see what's possible. So be aware that not all negotiations actually have

to happen, and you learn that by listening, practicing empathy, tactical

empathy as Chris Voss says, mirroring back to them what they say, and

encouraging them to draw themselves out. Next one, silence. Silence matters. If you

ask a question, or you make a comment, be quiet after you've done it, because you

will then create an awkwardness, a deliberate awkwardness, to encourage the

other party to respond to what you've said. So use silence as a tool to draw

the other party out, and explain their position in more detail, explain how they

feel about what you've just said. Not to challenge them or anything, but to get

them to reveal where they're actually at. Because when we go into a negotiation, we

go in with, you know, we're going to do battle, and we both got our sides, but

practicing empathy and using silence helps them draw away from their

entrenchment, shall we say, and they come out and share how they feel about the

deal. Again, you're not trying to create a loss, a win-win, you're trying to create

that nobody loses, and a deal that is lost for the client, if you believe in the

value you've got to offer, a loss for that client is not closing the deal.

Equally so, a loss for the client is buying at the wrong price. So if you

manipulate and use manipulative tactics in negotiation, you can get the price at

a place that you think is great, and fantastic, and over the world, but if you

do that, that deal will unravel very, very quickly. So it's about neither side

losing. Again, in the negotiation, you need to really understand why they

feel they need your product. If somebody's negotiating with you, it's

because they feel they have a need. So if you can understand where they feel they

have the need for your product, or service, or proposal, whatever it is, if

you can find out why they feel they have the need, yeah? Not why you think, why they

feel. Because this negotiation is about emotions, it is about human, there's egos

involved, there's a lot of kind of psychological elements involved, and yes

there's facts, but facts won't win a negotiation. So, and it shouldn't be a

confrontation. So you have to understand why they feel that this deal is worth

negotiating over, because once you know this, you can start to adjust. Firstly, the

position you take between your alternative deal and your main deal, but

also it may not be a question of price in that, in the sense that you're talking

about. It might be terms, it might be other things, so you need to understand

why they feel they need, why they feel they need your deal, and why they will

need to raise objections. What's the logic behind it? And that can be done

through empathy, but it can also be done through just listening, creating those

silence opportunities. But if you don't know why, why they're feeling the need to

negotiate, and why they feel they want to close this deal, you can't adapt in the

negotiation. You can just reiterate your position. Finally, just before I say that

as well, remember the objections. What are the objections they're saying, and as

part of that negotiation, your job is to understand why they have those objections.

Like if there is a pricing issue, what is the pricing issue? Is it about their

margin? Is it about their return on investment? And how are they expressing

that? Again, practicing empathy to draw that out really does matter. And finally,

you would expect me to say be prepared to walk away, but I'm not going to say

that in the same way. You need to reframe how you think about this deal. In that,

often we know the word negotiate means two parties compromising together to

reach an outcome. We know that, but often what we do is we approach...