© sigma management development limited 2005 1 presented by: paul davis negotiation skills © sigma...
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1© Sigma Management Development Limited 2005
Presented By: PAUL DAVIS
Negotiation Skills
© Sigma Management Development Ltd 2004
2© Sigma Management Development Limited 2005
Negotiating Techniques• IF you give me a bit of what I want THEN I can give you
a bit of what you want
• Always trade values (£)
• Never trade a value without getting one in return
GIVEGIVETO YOUTO YOU TO THEMTO THEM
Low Value/ Cost (easy to give)
High Value (worth a lot)
GIVEGIVEHigh Value Low Value/Cost
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The Negotiation Framework
PROPOSE
BARGAIN
DISCUSS
PREPAREPREPAREPREPARE
DISCUSSDISCUSS
PROPOSEPROPOSE
BARGAINBARGAIN
COMMITCOMMIT
REQUIREMENTSREQUIREMENTS
RESEARCHRESEARCH“BUYER” “SELLER”
COUNTEROFFER
OFFER
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• Preparation and planning skills
• Knowledge of subject matter being negotiated
• Ability to think clearly and rapidly under pressure and uncertainty
• Listening skills
• Judgement and general intelligence
• Integrity
• Ability to persuade others
• Patience
Characteristics Of A Skilled Negotiator
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• Company, Competition, Likely Requirements• Decision makers & Influencers• The Politics & Barriers• The Personalities• People Behaviours• Buying Motives
ALWAYS BE PREPARED
Research
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VARIABLE MAX £ MIN £
EQUIPMENT
SERVICE
DELIVERY
TERMS
TOTAL PACKAGE £ MAX MIN
Prepare Variables
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Negotiation VariablesGrade your variables
High - Important to you to obtain- Potential “walk-aways”
Medium - More of these- Hope to achieve the top end
of your entry pointLow - Willing to trade near to your
exit points- Not a give away
NB: then view them from the other party’s perception
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100 120
130
Buyer’s negotiating range
Seller’s negotiating range
Settlement range
110
110
The Negotiators Exit Prices Overlap
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The Negotiators’ Exit Prices Meet
100 120 130
Buyer Seller
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Emotional Buying Motives
LOGICAL
UsageSpecificationFunctionality
ValueEfficiency
PerformanceSafety
FlexibilityQualityPrice
NEEDS
EMOTIONAL
PersonalityPrestige
FearNovelty
TraditionPrice
StatusPromotion
Good RapportBrand
WANTS
11© Sigma Management Development Limited 2005
The Negotiation Framework
PROPOSE
BARGAIN
DISCUSS
PREPAREPREPAREPREPARE
DISCUSSDISCUSS
PROPOSEPROPOSE
BARGAINBARGAIN
COMMITCOMMIT
REQUIREMENTSREQUIREMENTS
RESEARCHRESEARCH“BUYER” “SELLER”
COUNTEROFFER
OFFER
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Propose
AIMHIGH
Your proposal is your maximum opening stance
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IF…….
Discuss
THEN
OFFER….. COUNTER OFFER
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Components of a Proposal
Components of a proposal
Condition Offer
Non-specific
Specific
Non-specific
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Distinction Between Proposals and Bargains
Proposal Bargain
Condition Non-specific or specific
Always Specific
Offer Always non-specific
Always Specific
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Constructive Debate
• Statement• Assurance• Question• Summarise• Demonstrate Listening
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Examples Of Destructive Debate Styles
• Threat• Attack• Blame• Point Score• Interrupt/block• Assume• Irritate
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Signals• “It would be extremely difficult to meet that delivery date”
• “We would not normally extend our credit facility”
• “It is highly unlikely that my boss will agree to a free upgrade”
• “As things stand our prices must remain as listed”
• “I can’t give you a better discount on your current volumes”
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Signals
• “It would be extremely difficult to meet that delivery date”
• “We would not normally extend our credit facility”
• “It is highly unlikely that my boss will agree to a free upgrade”
• “As things stand our prices must remain as listed”
• “I can’t give you a better discount on your current volumes”
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ProposalsUse of Brevity
• It might be possible to do something
• We could perhaps look at that
Key Message
Verbage detracts from the message, and often gives your opponent the view you are in a a weak or uncomfortable position
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The Negotiation Framework
PROPOSE
BARGAIN
DISCUSS
PREPAREPREPAREPREPARE
DISCUSSDISCUSS
PROPOSEPROPOSE
BARGAINBARGAIN
COMMITCOMMIT
REQUIREMENTSREQUIREMENTS
RESEARCHRESEARCH“BUYER” “SELLER”
COUNTEROFFER
OFFER
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PROPOSE
BARGAIN
DISCUSS
PREPAREPREPAREPREPARE
DISCUSSDISCUSS
PROPOSEPROPOSE
BARGAINBARGAIN
COMMITCOMMIT
REQUIREMENTSREQUIREMENTS
RESEARCHRESEARCH“BUYER” “SELLER”
COUNTEROFFER
OFFER
The Negotiation Framework
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Structured Questions Ask open questions & listen
What
Who
When
Why
Where
How
To What Extent
To What Degree
How Important
Do
Can
Could
Would
May
Will
Shall
Should
Is
Does
Might
Did
Have
Has
OPENOPEN CLOSEDCLOSED
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QUALIFYASK 1ST OPEN QUESTION
LISTEN TO IMPLICATION IN ANSWER
BASE NEXT QUESTION ON ANSWER TO FIRST
REPEATLISTEN
HIT HOT SPOT NOT IMPORTANTUNTIL
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The Art of Listening
• The person speaking is not necessarily the person in control
• Listening/talking is the bilateral process
• Listening includes watching
Impediments to Overcome
• Resistance to change
• Thinking one’s own thoughts instead of listening
• Wishful hearing
• Making unwarranted assumptions
• Habitual secretiveness
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TALKING
BIASASSUMPTIONEMOTIONS
LISTEN ASSIMILATE REHEARSE REPLY
REPLY
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Summarising
• Summarise throughout (every three minutes)
• Use their language not yours• Seek agreement and clarification• Test any assumption
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PROPOSE
BARGAIN
DISCUSS
PREPAREPREPAREPREPARE
DISCUSSDISCUSS
PROPOSEPROPOSE
BARGAINBARGAIN
COMMITCOMMIT
REQUIREMENTSREQUIREMENTS
RESEARCHRESEARCH“BUYER” “SELLER”
COUNTEROFFER
OFFER
The Negotiation Framework
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BEHAVIOURS DOMINANT
HOSTILE WARM
SUBMISSIVE
FIGHTER LEADER
HELPERTHINKER
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ABOUT YOUR CUSTOMERS DOMINANT
HOSTILE WARM
SUBMISSIVELOGICALTHINKER
FIGHTER
HELPER
ArrogantAggressiveRuthlessDictatorialOpportunisticConceitedImpulsiveDoesn’t allow mistakes
Fair mindedFirmDecisiveMotivationalOptimisticOpenSees others’ points of viewAllows 1 or 2 mistakes
NegativePedanticBureaucraticCautiousNit-pickingColdDefensiveBlocking
GullibleDeferentialSelf-effacingPassiveSubmissiveIneffectiveManipulativeWeak
LEADER
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DOMINANT
HOSTILE WARM
SUBMISSIVE
PEOPLE BEHAVIOUR and how to deal with them
Remain calmBe assertiveAsk open questionsPace upBe well prepared
Be well preparedMirror behaviour
Pace downAsk open questionsInvolveBe patientDon’t “sell”
Be directiveKeep focused on the topicAsk closed questionsPut agreements in writingCheck progressCheck reality of commitments
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Rapport BuildingGET ON THEIR WAVELENGTH
Big Picture Or Detailed Lots of OptionsOr Follow Procedures Informal Or Formal Free Wheeling Or Take Control
DON’T TREAD ON TOES OF BELIEFS Politics View of the World Behaviours
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Rapport BuildingFIND THEIR HOT BUTTONS
What’s important to you? What do you want from…..?
SPEAK THEIR LANGUAGE Speed Volume Inflection Use their words
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BODY LANGUAGE IN NEGOTIATIONS
• Quotation from Sir John Collins, Dixons Chairman:
““I would never have a serious discussion I would never have a serious discussion or negotiation without seeing somebody or negotiation without seeing somebody because the body language is every bit because the body language is every bit as important as what you are saying to as important as what you are saying to me”me”
Times Interview September 2002.
© Sigma Management Development Limited 2005
COMMUNICATIONS
10% 20% 30% 40% 50%
7% Verbal
Visual 25%
Verbal & Visual 45%
15% Dramatised Verbal
Body Language
Retention
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BODY LANGUAGE
• 50-70% OF OUR COMMUNICATION IS NON-VERBAL
• READ IT…..USE IT!• LOOK FOR CLUSTERS• LOOK FOR CONGRUENCY OR NON-
CONGRUENCY
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ROOM LAYOUT
• DESKS?• CHAIRS• POSITIONS OF POWER?• COMFORT ZONE/BODY SPACE• LOCATION?
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Negotiation Tactics & Styles
Key Message
A TACTIC RECOGNISED IS A TACTIC DISARMED
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Styles of Negotiation
• ‘Tough-guy/Soft Guy’ duo who alternates between aggression and kindness to tempt the negotiator into dealing with the, ostensibly, softer guy.
• Over-valuing a feature of the deal - it could be future profits, for instance - and using this to claim a higher price for themselves.
• Setting pre-conditions for negotiation so as to gain ground before the actual negotiations being - managements, for instance, demand that a strike cease before they will negotiate, governments demand a return to the status quo before they will negotiate a disputed event (seizure of territory etc).
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Styles of Negotiation • High initial demands to push the area of settlement
towards themselves and to shock the other negotiator into reassessing his expectations.
• Making threats (veiled or blunt) to coerce the other negotiator into movement - sales people often warn that unless the order is filled today they cannot guarantee supply; union officials often tell management that they must meet the union demands or face the prospect of a long strike.
• Setting pre-emptory deadlines that they know can hardly be met in order to hustle the other negotiator into quick decisions, or, sometimes ominously, to provoke themselves into a preferred choice of action - ‘unless you withdraw your forces by 11 a.m. today, a state of war will exist between us’.
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Check your variables
Aim high
Give way slowly
Never give a concession without one in return
Listen, don’t talk
Negotiating Rules
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Use structured questions
Never trust your assumptions
Use power gently
Confirm the agreement
Achieve win-win
THERE IS ALWAYS ANOTHER DAY
Negotiating Rules
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SPECIALISTS IN PARTNERING AND SUPPLY CHAIN RELATIONSHIPS