Principles of Negotiating

27 Principles of Negotiating

Feb 1, 2003 12:00 PM, RCM Staff Report

Basics to Keep in Mind

1. If you ask for something before a contract is signed, it's called “negotiating.” If you ask for something after a contract is signed, it's called “begging.” It's better to be a good negotiator than an expert beggar.

2. From negotiator Chester Karras: “You don't get what you deserve, you get what you negotiate.”

3. From motivational expert Zig Ziglar: “You can get anything in life, if you help enough other people get what they want.”

4. Everything is negotiable, but everything has a price.

5. Quoted prices are invitations to buy, but not statements of value.

Important Fundamentals

1. Terms are just as important as dollars. Many people focus on rates, dates, and space (the big three of meeting planning), but the other fine print — such as liability and attrition — can have just as much importance. These things will translate into dollars.

2. Negotiate at the proper authority level. Negotiate with the person who can say “yes.” Don't let your negotiation get lost in the translation. You don't want to have to negotiate it more than once. Ask to negotiate with someone who has the authority to go “off the script” or the rate card. Refuse to negotiate with someone who doesn't have that authority.

3. If you want something, ask for it. Good negotiators do not put their best terms on the table first.

4. Focus on the relationship. It's important that the relationship is still there once you're through with the negotiations. You don't want to get to the end of an agreement and never want to see each other again.

The Four Unwritten Rules

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In every negotiation, there are four unwritten variables. All exist in every negotiation, whether or not you know or understand that.

1. Power

   This is the ability to get the other side to do things in the way you see favorable. The top two power sources are competition and the printed word. If a hotel knows that four other hotels in town want your business, then that hotel likely will want your business, too. Hotels play that game, too. They try to get more than one group interested in the hotel. And remember: Always question the printed word. Printed rates are not final rates.

2. Time

   Ninety percent of the negotiating happens in the last 10 percent of the time allotted. Negotiating will go on forever unless one side imposes a deadline. The corollary is that time works against the person who doesn't have it. Never reveal your real deadline, and never negotiate when you're in a hurry.

3. Knowledge

   Knowledge is a combination of expertise and information-gathering regarding the wants and needs of the other side. How and when is the person you're dealing with evaluated? How experienced is the person? What's the hotel's average daily rate, its peak season, and does it have other customers who want the same dates?

4. Leverage

   Leverage is your ability to get the hotel to want your business and to give you favorable terms.

Negotiating Gambits

Beginning Gambits occur at the start of negotiations.

1. The Flinch

   Most religious meeting planners are born with this: the ability to express shock and dismay at what the other side is presenting. This technique forces the other side to adjust.

2. Feel/Felt/Found Technique

   This is a way of acknowledging another person's feelings without giving any ground. It's also a way to disagree without being disagreeable. Here's the script: “I understand how you feel. Others have felt the same way, but when they have found out more about us, they have come around.”

3. First Offers

   The general rule is to never accept the first offer.

4. The Vise

   The purpose of the vise is to squeeze the price range up or down in your favor. When someone names a price, you say: “You'll have to do better than that.” But be prepared for the response: “How much better do I have to do?”

Middle Gambits occur during the middle of negotiations, the point at which most negotiations begin to stall. Middle gambits are used to keep things going, assuming that you want to do business with this party. There are two basic techniques.

1. The Trade-Off

   Never give a concession without getting a concession. This is the secret to keeping a negotiation balanced. It keeps the other side from nibbling you to death. They know they'll have to give up something for everything they get.

2. The Set-Aside

   When you're deadlocked on an issue, set it aside and come back to it after you've reached agreement on the easier issues. Why leave the toughest issues for last? Because by the end of negotiations, the process has momentum and both sides will have the motivation to be flexible.

Ending Gambits are the end games.

1. BATNA

   When you reach the end and are asking yourself if you should go through with what you've negotiated, ask yourself: “What's my Best Alternative To a Negotiated Agreement?”

2. The Walk-Away

   Your ability to negotiate is tied to your ability to walk away from the deal. This is why you want to give yourself options.