Most jobs require at least a little bit of negotiations skills.
Procurement personnel, however, live in the world of negotiation day in and day out. Many of the most impactful moments of their careers involve negotiation. To be able to do their jobs well, these skills must be utilized on a daily basis.
To help you do negotiation better, here’s 5 tips (based on real psychological research) to help you do it best and get what you want.
Focus On The First 5 Minutes
In a study published by the Journal of Applied Sciences, they found that the first 5 minutes of negotiation can be very telling on what the final outcome will be.
They found that people are “feeling each other out” in these first 5 minutes. The other party is trying to figure out if you mean what you say, or if you’re trying to overcompensate to get more than you may want in the end. This allows them to respond accordingly so that they can get most of what they want.
The best plan of action is to be as likable as possible within these first 5 minutes. That way, the other person doesn’t “shut down” and will continue to work with you to try to find a solution that will make both parties happy.
Begin High
In an article by Psychological Science, researchers say you should always start high in your negotiations. This high number will create an “anchor” or baseline, from which all other numbers discussed (and eventually agreed upon) will be based off of. As both parties begin to work back and forth to find what will make them happy, you will come down to something in between. Just make sure that you choose something high enough originally that will allow you to still be satisfied in the end.
In the commodities world, of course, this discussion may require a bit more flexibility. There are often times when the market is high and both parties would like prices to be lower, but the reality is that the actual price is completely out of your suppliers control (because prices are based on the Chicago Board of Trade).
Of course, there’s always a bit wiggle room to discuss. Based on your experience with the particular commodity, you can come to a realistic agreement that will keep both parties happy.
Go First
According to the Harvard Business School, you should always go first when you’re negotiating. This will allow you to set the “anchor number” — the offer mentioned above that all other numbers are based off of, and will allow you to tip the negotiation in your favor.
Also, going first shows the other party that you are confident and able to actively seek the ideal choice for yourself and your company.
Drink Coffee
A study in the European Journal of Social Psychology found that the more caffeine you consume, the more stubborn you’ll become.
Why is this ideal for negotiations? You’ll be less likely to budge on an argument which will probably lead to “greater agreement” during the entire interaction.
Create Urgency
Creating a sense of urgency has always been a great way to sell things. In an article published by ScienceDaily, researchers found that “sold-out products create a sense of immediacy for customers”. People think if something is sold out, then it is therefore popular and must be good. If they don’t make the move now, someone else will.
This sales approach can be applied to negotiation strategies as well. If the other party feels like they will loose your business if they do not bend a bit and work with you, this urgency causes them to try harder to find a solution that will make both parties happy.
However, this also means that if your urgency doesn’t work and you don’t feel satisfied at the end of the negotiation, you may have to be willing to walk away.
If you’re looking for a few more tips, you’ll also probably enjoy this infographic.
Topics: Purchasing & Procurement
