In negotiations there are two parties involved, the buyer and the seller. Objective of the negotiation is to get the best deal. We try to get what we consider is fair value for the product or service. First we need to negotiate to ascertain the price of the product and then we can negotiate for value additions. It must be kept in mind that negotiation is different from bargaining. Negotiation is about getting value for money and also about agreeing on other terms and conditions, like terms of payment, delivery, time frame and after sales. However, bargaining is about getting the product or service at a lower cost.
Let’s try to understand the psychology of negotiation with the process. First and foremost is the impression that we create when going for negotiations. Little things like power dressing, using a high end car for commuting, the venue, its environment and taking a few people along gives us confidence and a psychological advantage over the other party. This will help us influence the other party and tilt the balance a bit on our side. It is also imperative that the entrepreneur should look out for the non-verbal cues of the other person while negotiating. These subtle cues will tell us about the state of mind of the other person.
Patient listening to the other person will give us a good insight to their psychology and what they want out of the negotiation. Then we should wait for the offer that they have to make, this way we can think and decide if the offer is lucrative for us or not. Remember not to respond immediately, take your time to consider and evaluate the option. Leave the deal open in the first round of negotiation.
Some companies follow the wait and watch policy. During this period they wait if the other party comes down on their offer and also to check other options available. However, we should let the other party know that we are still interested in their offer. After careful consideration and deliberation we should make our final offer. Once all terms have been agreed upon close the deal as soon as possible, otherwise the negotiation will go on endlessly and of course, one must always be fully prepared to lose a great deal in order to make a great deal.