Ian Baxter, Chairman and founder of Baxter Freight, shares his insights on the power of persuasion
Negotiation is at the heart of life. It’s so important they should teach it in school. As well as in business, most days I have to negotiate with my wife, my children and even our dogs! They (the dogs that is) are much keener to come in from the garden if I use a treat to ease the deal.
Plenty of people have told me over the years they don’t feel confident enough to negotiate. However, in my view we all need to learn the basic skills set out below. I hope you will find them useful… and that you never use them to get the better of me.
- Have options: The best tool for getting the best deal occurs outside of the negotiation altogether. If you want the best deal then you have to be prepared to walk away. If you are selling a product, buying a house or arguing for a pay rise it’s so much easier if you are reconciled to the possibility of failure as well as being focused on success. Without a Plan B you’ll never come across as confident and relaxed enough to win.
- Be well informed: Doing your research is vital. The more information you have the better things will go. These days the internet has information on almost any subject so there is no excuse. If other companies pay better salaries or if the nicer house down the street sold for less three months ago you have to know this and use it to support your position.
- Develop a Plan: It’s no good entering a negotiation just contemplating what you would like to have – you have to anticipate the needs and desires of the other person and what their position will be. If you say X they will most likely say Y and so on. If they say Y how will you respond?
- Expect to haggle: Not everyone expects to negotiate about everything but if you buy a car, a house or take a new job there is often scope to get a better deal. As an employer myself I can tell you that I would never think badly of someone trying to negotiate with me. Whether they would succeed is another matter!
- Be friendly: Whilst some people may prefer to be formal I always think it’s better if people want to do a deal with me because they think (correctly) that I’m a nice guy.
- Ask questions: I always like to ask the questions many are too embarrassed to ask. If you have any chance to find out how much the other person wants to do the deal, do it. The more direct and open the questions and the more background you can find out the better. Be careful though not to push your counterparty to give you their bottom line because it may not really be their position yet they may feel bound to defend it. Remember to listen carefully to the answers and study the body language too.
- Let them go first: If possible get your counterpart to make the first move e.g: ‘I know this is the asking price but what reduction could you offer?’ Once they’ve made their first concession try to get them to make the next one as well.
- Be Bold: Don’t be afraid to ask for much more than you want or to offer much less than you are prepared to pay. You can always adjust your position later and you never know you might just get what you ask for.
- Take your time: The use of breaks from negotiation, time-out to seek advice from third parties or even putting talks on hold are all great ways to test the resolve of your counterparty. Silence also works spectacularly well. Say you’re disappointed with the offer and then shut up and see what happens next.
- Don’t be too greedy: As the US billionaire oil magnate and anglophile J Paul Getty said: “You must never try to make all the money that’s in a deal. Let the other fellow make some money too, because if you have a reputation for always making all the money, you won’t have many deals.”