There is one central idea, one key concept that is critical to understand.
If you have this right, you will be compensated with profitable, enjoyable and long term relationships in which price is not the only element. If you fail to get this right, you will battle with sub optimal business relationships and you will most likely end up bartering about price in probably all of your negotiations.
The key element is understanding the interests of your counterpart in your negotiations; this is an important element taught in negotiation training.
Generally we have a good awareness of our own objectives, needs and desires. When we negotiate with others, we usually begin with trying to convince them of our opinion. We think to ourselves that because it makes sense to us, surely it must make sense to anyone that is reasonable. The problem with this method is that it completely disregards the objectives, needs and desires of our counterparts.
What good is it trying to persuade someone to do something that they don't believe would be in alignment with their objectives, beliefs and desires?
You will not under any circumstances persuade anybody to agree with you by disagreeing with them, quite the opposite will happen. Because you tell someone that they are incorrect and you are the one that is right, you will force them to defend their stance rather than listen to yours. Nobody likes to be wrong and if you tell someone that they are wrong it will become key for them to defend their stance because their personal credibility is on the line.
It is rare to achieve agreement with anyone after you have told them that they are wrong, you have also managed to paint yourself into a corner. If it was key for you to reach agreement and you do not manage to win the argument, then you will have to compromise your own credibility by departing from your 'correct' stance to accept the argument of the other side.
If you want to reach consensus the easy way rather than have your negotiations spiral into a positional argument, here's my suggestion:
Start by asking some questions, the best of which you can ask will be questions designed to show the interests behind the positions that your counterparts have assumed in the negotiation. Open questions are the best kind of questions to expose the interest or motivators that reinforce your counterpart's positions.
Here's a great question you can use and at the same time endorsing your negotiation skills: Why are you negotiating with me / my organisation?
This is quite possibly the best question to ask at the start of a negotiation. Follow this question by asking your counterpart to elaborate on and to prioritise the reasons offered in response to your questions. This will give you a prioritised list of their most important interests.
Sample Interests:
- Individual: Security, Acknowledgment and Control
- Organisation: Profit, Risk Avoidance and Strategic Fit (Some important factors you would have learned in purchasing training)
Once you have an understanding of your counterparts' key interests it is a good idea to reveal your own interests. Once all the parties to the negotiation have revealed their interests it will be much easier to identify the areas of common ground and then it is useful to present your case in the context of how it would meet their interests. This way, you will not have to convince your counterpart that your stance is correct; you will only have to show that your suggested course of action would satisfy their interests.