Effective Negotiation: Process, Traits, and Strategies
Understanding Meaning Negotiation
Meaning negotiation is a process of social interaction in which various parties with different interests try to reach an agreement that satisfies all parties.
Fundamental Negotiation Traits
Key traits to be established in any negotiation include:
- Any negotiation involves an interaction between various parties that aim to get something from others in exchange for giving up something.
- Any negotiation is intended to resolve any differences by agreement.
- In any negotiation, the parties have to be clear about their objectives.
- In any negotiation, there must be a correlation of forces as balanced as possible.
Essential Elements for the Negotiation Process
- Objective: What is to be achieved by all parties.
- Participants: People involved in the process (e.g., seller and buyer).
- Influence/Leverage: The authority or power one party has over the other; the capacity to alter conditions for both parties. The negotiation outcome will depend on their respective market positions and their economic, financial, and technological capabilities.
- Agreement: The outcome of trade negotiations should be balanced for both sides.
Preparing for Negotiation
Effective preparation involves several steps:
- Locate Customer: Knowing who the customer is and where they are located.
- Collect Customer Information: Understanding their most important features, such as purchasing capacity, purchase requirements, and purchasing methods.
- Approach Customer: The customer’s attitude towards the negotiation process will vary and must be considered.
- Set Targets: Define the objectives to be achieved. The general objective should be to build a customer relationship, not just secure a one-time sale.
- Determine Location, Style, and Strategy: The location, in most cases, will be the customer’s address, over which you may not have control. Choose an appropriate negotiating style and strategy.
Understanding Negotiating Styles
There are four primary negotiating styles, which are classifications of human behavior. These styles generally stem from two basic opposing positions: aggressive behavior and submissive behavior. In trade negotiations, there is no room for total submission or total aggression; rather, behavior should be less extreme. For this reason, a negotiator’s behavior typically falls within a range of styles.
Analytical / Cooperative Style
- Is concerned about details; has prepared their position very well and knows on what it is founded.
- Looks for a specific sequence of events.
- Is aware of the needs, aims, and desires of their own side.
- Delegates but closely monitors; analyzes the moods and needs of the counterparty and tries to address them.
- Is patient as long as progress is being made, but may not be willing to actively help the other party if it doesn’t align with their detailed plan.
Analytical / Aggressive Style
- Meticulously analyzes what their winning strategy could be.
- Worries about details; further requires a detailed and logical line of events and procedures.
- They know what they want to achieve and have specific, well-defined goals.
- Is attentive to the needs and mood of the counterpart, often to find weaknesses.
- Lacks patience, wants to finish quickly and get to the point; is apparently not worried about being sympathetic.
Flexible / Cooperative Style
- High preparation; they know their position and, usually, that of the counterpart.
- Does not worry excessively about details; does not rigidly establish the procedure, but rather expects or adapts to proposals.
- May not start with very clear goals, but these become defined during the negotiation.
- Delegates easily and often, including decision-making.
- Has immense patience; believes that a solution will be found sooner or later.
Flexible / Aggressive Style
- Their preparation is not very deep and may lack thoroughness.
- Does not take details into account.
- Is not interested in pursuing a specific sequence of events.
- Their goals may not be clear from the outset, but they are opportunistic in pursuing them.
- Delegates widely.
- Is open to considering new possibilities, though often with some reservations or for their own advantage.
- Is impatient.
- Views the negotiation as a personal challenge.
Key Negotiation Phases
1. Breaking the Ice and Establishing Communication
Methods include:
- References to previous contracts.
- Telephone calls and letter-writing.
- General questions about the market or activity.
- Arousing the customer’s curiosity.
2. Identifying Customer Needs
To identify customer needs, ask a series of questions with the following objectives:
- Differentiate evident needs from undefined needs. Evident needs are those that the client clearly feels and expresses.
- Highlight the consequences of decisions made to meet those needs.
- Propose the most useful solutions to meet the needs and solve the underlying problem.