Educating yourself on the three most common types of negotiation is absolutely crucial in order to move deals forward and stop people from manipulating or taking advantage of you. There are three types of tactics that you will need to learn so that you’re prepared for any situation. They are: collaborative, neutral, and manipulative. If you ever hear or read the phrase, “3 types of negotiators,” it’s most likely referring to: collaborative, neutral, and manipulative tactics.
Collaborative tactics ensure that deals are mutually beneficial and that the business relationship is always valued. Manipulative tactics take advantage of the other business or prospect by tricking people into agreeing to the deal. A great example of this tactic would be a used car business that seeks to manipulate the customer into buying a car. Some salespeople that utilize manipulative tactics generally mean well and and still care about the other business’ well-being; however, some salespeople are totally ruthless and use their manipulative tactics aggressively without a care in them world for the other party. On the other hand, collaborative tactics are likely to maintain positive relationships and encourage repeat business. Manipulative tactics are generally utilized when the salesperson seeks a one time transaction and feels there’s no possibility for repeat business taking place. Where do neutral tactics fall into play? They are, well, neutral in that they combine elements of collaborative and manipulative tactics.
It’s important that you recognize the type of tactics that the opposite party is using. This will allow you to counter their measures, not matter what they may be. Next, let’s evaluate all three of these bargaining tactics.
Three main strategies are utilized in the collaborative form:
1) The Trade-Off: Options are exchanged that feature differing costs and levels of value.
-How to countermeasure: Emphasize the value needs to be balanced. Ask for more value for yourself so that the terms are equal.
2) The Trial Balloon: This occurs when someone provides a hypothetical situations to test the waters. “What if…” or “Suppose we…” are common phrases when this takes place.
-How to countermeasure: Stress your level of commitment and go over the details of the offer or proposal. Avoid overreacting (or under-reacting) until the implications have been fully evaluated.
3) Shared Interests: This is when one party reminds the other party of objectives and interests that they both have in common.
-How to countermeasure: Clearly specify both the interests and objectives you have in common and what is dissimilar. Balancing cost and value must be fully analyzed before a deal can be reached.
Three main strategies are utilized on neutral terms:
1) The Deadline: This is used to ensure that a deal takes place by a certain date or specify when an offer expires.
-How to countermeasure: Simply just question why the deadline exists or why it occurs on the date that the other party wants. Emphasize the value of the deal.
2) Higher Authority: This is when you allow a third party to make a final decision. It’s usually someone who hasn’t previously been a part of the negotiations.
-How to countermeasure: Make it very clear that you’re displeased that someone who hasn’t even been present is going to be the deciding factor.
3) Budget Constraints: This is when a party expresses that there are financial limitations impacting a potential deal.
-How to countermeasure: Figure out the root cause of the budget constraint. Then, find common ground in which budget limitations can be worked around to satisfy both parties.
Three main strategies are utilized with manipulative tactics:
1) The Future Promise: This is when a party stresses that the other party needs to make concessions but that those concessions will pay off over time.
-How to countermeasure: Ask for specific documentation about how your company will benefit in the future. Make sure the contract ensures that future benefits will take place.
2) Threats: This is when extreme ultimatums are given to a party.
-How to countermeasure: Stress that you want to stick with fair and balanced measures that benefit the interests of both parties.
3) Expose Competitive Information: This is when a party references the pricing or information of a competitor in order to sweeten the deal for themselves.
-How to countermeasure: Research your competitors to see what’s true and untrue. Then, adjust your proposal as you see fit and emphasize the benefits of your proposal.
Now that you have a firm understanding of common negotiation tactics, let’s evaluate the different types of negotiation skills that you and your team should be developing to ensure that you are ready for any situation that involves negotiation.
1) Ensuring the Bottom Line is Clearly Defined
The bottom line is the limit a company is willing to give in when it comes to a deal being made. The best way to prepare for any negotiation is to always have the bottom line defined as clearly as possible. This will prevent you and your team from caving in or being taken advantage of with the aforementioned manipulative tactics.
2) Only Negotiating with Decision Makers
If you’re not trying to make a deal with a decision maker, then you’re probably wasting your time. Train your team to always identify exactly who the decision maker is concentrate their efforts on influencing this person; otherwise, the other party will eventually give the proposal to the decision maker and your team will essentially have to begin the negotiation process all over again.
3) Thoroughly Preparing Before Negotiations Take Place
You’ve got to do your homework and your research before sitting down at the negotiation table. The more relevant information, facts, metrics, data, etc. that you have, the more leverage you can gain by utilizing all of it, as needed. This will ensure that you have the resources to counter any tactic that’s thrown at you.
4) Creating Value that Justifies Cost
It’s simple: the more value your product or service has, the higher priced it can be. Don’t ever sell features during a negotiation. Always sell value and tailor your proposals to what specific value the other party is in need of the most.
5) Providing Alternatives to Proposed Cash Discounts
A common negotiation tactic involves the opposite party doing everything they possibly can to lower the cost. Be prepared for this by coming up with alternatives in which the other party still benefits without you having to sacrifice much incoming cash. Again, offer value.
6) Receiving Something Back for Your Discounts
If you do agree to offer a cash discount, make sure that you’re getting something satisfactory in return. Have your team come up with a list of things you can get back. These can range from shorter payment terms to a larger order to additional services that benefit you.
7) Determining Alternative Solutions
Make sure that you and your team are aware of every possible solution that the opposite party may be seeking. This will ensure that you have flexibility to provide the party with what they need and prevent them from deciding to make a deal with a competitor.
8) Being Silent
Silence can be a powerful factor when it comes to negotiations. Staying silent forces the opposite party to tae the time to consider your offer instead of constant back-and-forth. Once you make a formal proposal or offer, try to stay silent for a little bit.
9) Remaining Patient
Negotiations can be a hair-pulling experience that can stress out even the most seasoned negotiator; however, you have to remain calm and not overreact, no matter how one-sided the other party’s offer or counteroffer is. Don’t ever allow yourself to agree to terms that you’re not truly satisfied with. You can always request a break to think things over.
10) Being Comfortable Walking Away
No matter how much you effectively counter the other party, sometimes a deal is simply just impossible to make. Don’t beat yourself up when this happens. As long as you and your team did all you could to find common ground that you thought was reasonable, then there’s no need to have regret. Stay strong and move on to another party that will be more reasonable.
Now that you’ve learned the three major negotiation tactics and the skills you need to develop in order to successfully implement those tactics, you have positioned yourself to be a great dealmaker that not only excels at proposing win-win deals but also excels at recognizing the tactics that other parties utilize. Now, get out there and make some deals that will take your business to new heights. Good luck.