In the December 2011 issue of CPA Ireland’s Accountancy Plus, Stephen Boyle discusses the best tactics and approach to negotiation in business. Stephen is a negotiation trainer and consultant and lectures on negotiation at UCD Michael Smurfit Graduate Business School. Negotiation tactics have changed widely in Ireland in the past few years, with more emphasis on price and more ‘hardball tactics’ being used than ever before. Here, Stephen explains the best way to improve your negotiation tactics and how to achieve better outcomes.

Mindset

A positive attitude can make a huge difference to the outcomes of negotiations. Stephen highlights this saying, “many negotiators fail to realise that they are being held back by a lack of confidence or a defeatist attitude.” He also points out that those not naturally gifted in the area can improve their skills through research and practice.

Preparation

Being prepared can greatly improve your ability to make decisions during tough negotiations. These steps should include:

• Set Your Targets

It is important to set specific, challenging targets that you know you want. Stephen advises to “consider sharing your targets with a colleague; negotiators who share their targets with others work harder to reach them than those who keep their goals to themselves.”

• Research and Develop your Fallback Alternative

Having a back-up plan when you enter negotiations will “strengthen your ability to walk away if things unexpectedly go wrong.”  Failing to have an alternative plan could see you paying any price or making any kind of concessions just to close the deal.

• Set Your Limits

Once your targets and fall-back plans are established, ensure you have set limits. Stephen explains, “Stress-test the limits by asking if you would accept even less if the limit wasn’t quite reached – this will help you understand how low you really should go before you are better off walking away.”

• Plan your Trade-Offs

To avoid any concessions you may regret, Stephen recommends planning your trade-offs beforehand to ensure they are beneficial to you.

• Try to Anticipate the Other Side’s Plan

Drawing up a list of the opposition’s objectives and their potential fallback plan will help to better understand them and where to take the negotiations next. “The better you understand the other side’s plan, the easier that will be.”

Dealing with Hardball Tactics

‘Hardball tactics’ can often be encountered in negotiations. Here, Stephen explains the most commonly experienced tactic; price-only negotiation.

• Price-only Negotiation

In this situation, the opponent will only be concerned with price and ignores the value of the service that you can deliver. Stephen advises to “sell them the benefits of your offering before you negotiate the price. If your customer doesn’t understand what you offer, then it will be difficult to negotiate a satisfactory deal with them.” He recommends ‘unbundling’ your offer, by removing certain elements they may not need in return for a lower, more competitive price.

Creating Collaborative Negotiators

Dealing with hardball negotiators can be tiring on a day-to-day basis, so Stephen suggests turning these into working partnerships where you can “sit down with their customers and explore how they could work together on reducing costs or creating a more profitable deal for both sides.”

Read Stephen’s full article on negotiation tactics here.