How Not to
"Give Away the Store"
by Wendy Priesnitz
Q:
I think I got had by a new client. Well, maybe I
just didn't do a very good job of standing up for myself. A
company wanted me to supply them with some product at a really low
price. They promised me that they'd buy a huge amount over the
course of six months and although I was skeptical, I couldn't find
a way to turn them down. So I gave them a discount that is larger
than I've ever given. I even waived my usual credit procedures!
How can I deal with this sort of situation better in the future?
A: There are many techniques for effective
negotiating. The most important thing - as you've just learned -
is to stay in control of the situation. And you do that by being
prepared.
By preparing, I don't mean that you should outline a perfect
scenario, but that you should know your bottom line position. Study
the other party's interests, as well as the best possible
alternatives to your perfect scenario. You should also understand
the short and the long term consequences of the various scenarios.
And you accomplish this by doing your homework.
Fairness is also important. If people feel a
process is fair, they are more likely to make real commitments and
less likely to walk away or plot ways to get out of the agreement.
Communication is another aspect of effective negotiations. So
cultivate active listening skills. Focus on what the other party is
saying, both on their words and on their underlying meaning. This
will help you understand the interests upon which agreement can be
based. And it may make the other party more prepared to listen, not
to mention increase their level of respect for you.
Finally, know your bottom line. And don't be afraid to walk away
from the negotiation if the other party wont come half way. Be
conscious of the importance of the relationship. If you understand
the relative priority of the relationship, it can be easier to know
when giving on a particular point may yield short term costs but
long term gains.
