Top five biggest negotiation mistakes
Have you ever walked out of a meeting wondering why you agreed to something? Or wondered how you lost a deal that seemed so promising? If you’ve ever had one of those “What just happened there?” moments, read on for the top five mistakes negotiators make.
- Not asking for what you need. The time to learn that the other side can’t meet your needs is not after you’ve signed all the papers. Sure, predicting the future is hard, but an uneducated negotiator won’t even know what to ask for. Too many buyers think that the seller knows exactly what they want when the reality is that the seller is more familiar with their company and their products than your company and your needs. Good negotiators plan ahead. They do research. Get the proper stakeholders involved. Ask questions. Don’t make assumptions. Communicate their needs and listen to the other side. Mind reading is a parlor trick, not a negotiation skill.
- Not having another option. Persistence may be a virtue, but when you can’t come to an agreement on a key issue, you need to be able to move on. The worst negotiating position to have is with someone who knows you won’t walk away. Account managers experience this situation all the time and can end up negotiating against themselves to keep a customer happy. But those in new relationships should try not to get themselves into lock-in situations. Unfortunately I’ve seen senior managers do this to the negotiating team all too often. If they tell their counterpart on the other side that they’ve “won the business” and that X doesn’t matter, they’ve cut off their negotiating team at the knees.
- Setting arbitrary deadlines. If everything was like buying bananas at the grocery store, you could leave the negotiations time period off of your project plan. In my experience, negotiations periods are rarely considered. The timeline jumps immediately from “choose a vendor” to “kick off meeting.” Project managers listen up. Just like telling the other side the deal is already theirs, telling them you need to make the deal today means you aren’t going to get the best price, terms or all the pieces you need. The seller knows you won’t walk away because starting all over with another company will take even a longer time. Similarly, sellers who offer special discounts for end of quarter deals may lose the sale if they don’t address other aspects of the transaction before the deadline. And it’s so hard to retract that better price when the deadline passes.
- Ignoring the other side’s needs. Insisting that the other side do unnatural things to make a deal is rarely a recipe for long term success. If you are trying to build a relationship, you need to understand who you are dealing with and what they need from you. Make an effort to understand their business drivers and actual capabilities. If you’re the 80,000 pound gorilla, it may be easy to force the other side to your terms, but it may not turn out to be a deal that lasts very long.
- Taking it too personally. Being friendly is nice, but getting “personal” when you don’t like what you’re hearing has no place in the business world. No one responds well to bullying. Profanity, name calling and worse can turn you into an accidental You Tube sensation (someone will pull out their camera phone and tape it). When discussions get heated, it’s a good idea to remind everyone that this is just a business meeting and to propose a break to let everyone cool off.
Getting too personal can also mean giving preferential treatment because of a personal connection. Trust is important, but don’t let it blind you to reality.
There are times when you should excuse yourself from the negotiations table or ask for someone else to be removed. Those situations might involve unprofessional behavior or the realization that someone else would be able to work through the issues with less emotion and more objectivity.
Negotiations involve skills and preparation. Working through the issues to find a result that works for both sides will be worth the effort down the road. Do it right, and they can even be fun.