NEGOTIATION & NEGOTIATIONS

The Alternative Board

Making An Opening Statement for Negotiation

- 7 TIPS TO WIN ANY NEGOTIATION -

No matter how much you may hate to negotiate yourself into a deal—or even out of one—negotiating is a very legitimate business skill to acquire. 

It's even more crucial if you're a smaller business trying to get off the ground. You will have to make your arguments against much bigger, more powerful entities so it's essential that you know the science behind negotiation skills and how they affect the other party's psyche.

Based on psychological research, here are some negotiation tips that will help you to get what you want.

1. Focus on the first 5 minutes. 

In a study published in the Journal of Applied Sciences, the first 5 minutes of a negotiation can predict the negotiated outcome. 

In these minutes, the study says you need to focus on "conversational engagement, prosodic emphasis—which basically means you should copy the emotional state of the speaker—and vocal mirroring" to help the negotiations end well on your side. 

These first minutes are important because the other party is evaluating you most intensely during this time. They are "sizing you up" and trying to figure out if you actually mean what you say or if you're merely trying to get more than what you know you're worth. 

Either way, start out likable so that the other person doesn't shut down on you. If you are able to open him up during these first few minutes, he will listen to your arguments throughout the negotiation. If not, you're basically wasting your time. 

2. Start higher than what you'd feel satisfied with. 

In an article in Current Directions in Psychological Science, researchers say you should always start high in negotiations. These starting prices will eventually "form an anchor," which will come to affect every other number that follows it.  

This means that you need to start high because it will lead the individuals involved to "selectively focus on information consistent with, and make valuations similar to, the starting value. Thus, starting high will often lead to ending high in negotiations."

Even if you know the number is ridiculously more than what you would be satisfied with, you are the only person who knows this. The other party doesn't know; they can only assume it.

3. You should make your arguments first. 

According to this study published by the Harvard Business School, you should always consider going first during a negotiation. What are the benefits of making the first offer rather than waiting to hear what the other side is going to say?  

It all comes back to that "anchor" number we discussed earlier. If you are the first to go, you are able to set the anchor number, and every number that follows this number will be compared or related to it.

The study says that by "making the first offer, you will anchor the negotiation in your favor."

Making the first offer will also show the other party that you are a confident individual since it's very rare that someone who lacks confidence and power ever makes the first offer.

4. Show that you're passionate. 

If you're satisfied, show that you're happy by smiling. If you don't like what you're hearing, make sure the other party knows this by showing your emotions.

In a study published in the European Journal of Social Psychology, researchers say that "the social signal value of anger enhances the credibility of the complainant and hence leads to better compensation, but only when the complaint itself presents room for doubt." 

These emotional signs will signal to the other party that you care about what you're arguing about, that you have done your research on the topic and understand the numbers that you're arguing for. 

5. Drink coffee. 

The more caffeine you consume, the less likely you'll budge in an argument, according to a study published in the European Journal of Social Psychology. 

The study says that "attitudes formed after caffeine consumption resisted counter-persuasion and led to indirect attitude change."

The means that you won't budge much during your negotiation and this will probably lead to "greater agreement" during the interaction. 

6. Convince the other party that time is running out.  

The more you make it seem as though things will be unavailable after a certain amount of time, the more other people are going to want it. 

In an article published in ScienceDaily, researchers say that "sold-out products create a sense of immediacy for customers; they feel that if one product is gone, the next item could also sell out."

This is because people think that if a product is sold out or if there's a limited time offer to it, then it must mean that it's good. If they don't make the move now, someone else will.

7. Provide them with as much data as possible.  

If you want to influence someone, just provide them with as much information as possible. In this scenario, quantity is better than quality.

Gita Johar, a professor at Columbia Business School, says that when you "provide a lot of information, some of it is bound to stick."

This will make the other party "open to persuasion." When you provide people with as much information as possible, it enables them to "resolve ambivalent feelings" toward what they're hearing. 

There's a good chance the other party will be influenced by all this data without even realizing it.

Bargaining and Making Concessions

- Why is it important to plan for concessions? -

The bargaining range in a negotiation is established by the parties' initial offer and response. The parties must first seek to narrow the bargaining range to within the zone of potential agreement (ZOPA). The concession is a tactical tool that brings the parties together. One or more of the parties must make concessions to bring the bargaining range withing the ZOPA. Generally, both parties will make some form of concession. Making concessions is a strong negotiation tactic. A skilled negotiator will manage the timing, frequency, and magnitude of concessions in an effort to influence the other party. For example, used effectively, concessions can create perceptions and help to reveal or uncover critical information about from the counterparty. This might include information about one's interests, resistance point, the costs associated with the negotiation, etc. The back and forth and progression of concessions between parties sets the tone of the negotiations and can evoke or alter perceptions and crate emotions. To further illustrate, making small, frequent concessions can indicate hard-ball tactics that cause a perception if procedural unfairness that alienates the other party. Large, infrequent concessions may frustrate or anger the other party with regard to the pace of the negotiations. The appropriate tactic with regard to concessions will vary based upon the ability of a party to invoke a desired response or elicit information from the other party. The most important thing to remember is that concessions are the only method of arriving at a mutually acceptable outcome. Unless the other party is willing to adjust her reservation point, one party must continue to make concessions until the negotiations point moves beyond the other party's reservation point. Making concessions is also sign of procedural fairness to the other party.

Note : There are also many tactics to avoid when making concessions. Most notably, a party should not make premature concessions. This normally involves making more than one concession in a row before the counter-party responds or counteroffers. Also, a party will have to determine the point in the negotiation to make a final offer or commit to a position without further negotiation.

source :

https://www.americanexpress.com/us/small-business/openforum/articles/7-tips-to-win-any-negotiation/ diakses pada 22/7/2018 jam 17:22 WIB

https://thebusinessprofessor.com/knowledge-base/concessions-in-a-negotiation/ diakses pada 22/7/2018 jam 17:38 WIB

NEGOTIATIONS

I Will Teach You To Be Rich

What is Negotiation?

Negotiation is a method by which people settle differences. It is a process by which compromise or agreement is reached while avoiding argument and dispute.

In any disagreement, individuals understandably aim to achieve the best possible outcome for their position (or perhaps an organisation they represent). However, the principles of fairness, seeking mutual benefit and maintaining a relationship are the keys to a successful outcome.

Types of Negotiation

* Distributive negotiation

Distributive negotiation is also sometimes called positional or hard-bargaining negotiation and attempts to distribute a "fixed pie" of benefits. Distributive negotiation operates under zero-sum conditions and implies that any gain one party makes is at the expense of the other and vice versa. For this reason, distributive negotiation is also sometimes called win-lose because of the assumption that one person's gain is another person's loss. Distributive negotiation examples include haggling prices on an open market, including the negotiation of the price of a car or a home.

* Integrative negotiation

Integrative negotiation is also called interest-based, merit-based, or principled negotiation. It is a set of techniques that attempts to improve the quality and likelihood of negotiated agreement by taking advantage of the fact that different parties often value various outcomes differently. While distributive negotiation assumes there is a fixed amount of value (a "fixed pie") to be divided between the parties, integrative negotiation attempts to create value in the course of the negotiation ("expand the pie") by either "compensating" loss of one item with gains from another ("trade-offs" or logrolling), or by constructing or re-framing the issues of the conflict in such a way that both parties benefit ("win-win" negotiation)

* Stages in the Negotiation Process

However, negotiators need not sacrifice effective negotiation in favor of a positive relationship between parties. Rather than conceding, each side can appreciate that the other has emotions and motivations of their own and use this to their advantage in discussing the issue. In fact, perspective-taking can help move parties toward a more integrative solution. Fisher et al. illustrate a few techniques that effectively improve perspective-taking in their book Getting to Yes, and through the following, negotiators can separate people from the problem itself.

• Put yourself in their shoes – People tend to search for information that confirms his or her own beliefs and often ignore information that contradicts prior beliefs. In order to negotiate effectively, it is important to empathize with the other party's point of view. One should be open to other views and attempt to approach an issue from the perspective of the other.

• Discuss each other's perceptions – A more direct approach to understanding the other party is to explicitly discuss each other's perceptions. Each individual should openly and honestly share his or her perceptions without assigning blame or judgement to the other.

• Find opportunities to act inconsistently with his or her views – It is possible that the other party has prior perceptions and expectations about the other side. The other side can act in a way that directly contradicts those preconceptions, which can effectively send a message that the party is interested in an integrative negotiation.

• Face-saving – This approach refers to justifying a stance based on one's previously expressed principles and values in a negotiation. This approach to an issue is less arbitrary, and thus, it is more understandable from the opposing party's perspective.

Additionally, negotiators can use certain communication techniques to build a stronger relationship and develop more meaningful negotiation solution.

• Active listening – Listening is more than just hearing what the other side is saying. Active listening involves paying close attention to what is being said verbally and non-verbally. It involves periodically seeking further clarification from the person. By asking the person exactly what they mean, they may realize you are not simply walking through a routine, but rather take them seriously.

• Speak for a purpose – Too much information can be as harmful as too little. Before stating an important point, determine exactly what you wish you communicate to the other party. Determine the exact purpose that this shared information will serve.

* Integrated negotiation

Integrated negotiation is a strategic approach to influence that maximizes value in any single negotiation through the astute linking and sequencing of other negotiations and decisions related to one's operating activities.

This approach in complex settings is best executed by mapping out all potentially relevant negotiations, conflicts and operating decisions in order to integrate helpful connections among them, while minimizing any potentially harmful connections (see examples below).

Integrated negotiation is not to be confused with integrative negotiation, a different concept (as outlined above) related to a non-zero-sum approach to creating value in negotiations.

* Bad faith

When a party pretends to negotiate, but secretly has no intention of compromising, the party is considered negotiating in bad faith. Bad faith is a concept in negotiation theory whereby parties pretend to reason to reach settlement, but have no intention to do so, for example, one political party may pretend to negotiate, with no intention to compromise, for political effect.

Bad faith negotiations are often used in political science and political psychology to refer to negotiating strategies in which there is no real intention to reach compromise, or a model of information processing.

Preparation for negotiation

If you want to start negotiations in a winning position, then you need to prepare like a tiger. That means you must pay attention to 7 crucial areas.

1. Check whether you are in a negotiating situation

A negotiating situation exists when you are in any communication or problem-solving situation with others that can work out to your advantage. If there is no advantage to you, then don't negotiate; you'll only lose.

2. Clarify your aims

Your overriding aim in any negotiation is to achieve the objectives you and your constituents have set. There are other aims, such as getting a good deal and improving your relationship with the other side. But getting what you want is tops. Always keep this aim firmly in your sights and don't stop until you get it.

3. Gather information

Once you know you're in a negotiating situation, you need to gather information about the other side's offer and use it to refine your own. Many negotiations come unstuck simply because one side or the other doesn't listen, or check, or take the time to clarify exactly what the other side are offering, or indeed what they themselves are offering. This means that throughout a negotiation you should do tons of listening, clarifying and checking. And when it comes your turn to put over your case, you should use every skill you can muster to make sure they understand.

4. Negotiate with your own side

It is rare to go into a negotiation only representing yourself. Usually you negotiate as a representative of others, your constituents. Part of your preparation for negotiations has to be spent getting the best mandate from your constituents. Aim to get the support you need; the trust you need; the resources you need; the understanding you need; and the freedom you need.

5. Get a BATNA

A BATNA is your Best Alternative To a Negotiated Agreement and is the only certain way to be successful in negotiations. By preparing for negotiations with one party by sounding out an alternative deal with another party, you get walkaway power. It means that, even if the alternative isn't quite what you want, you are still prepared to go there, if need be.

6. Prepare the setting

There are five questions to ask yourself when preparing the setting for a negotiation. They are: Who? (i.e. who is to take part and do what?); Where? (i.e. our place or theirs?); When? (i.e. what is the time scale?); Why? (i.e. what are we negotiating about?); and How? (i.e. how are we to present our case?).

7. Prepare yourself mentally

The right attitude towards negotiations is the principal difference between successful and unsuccessful negotiators. Getting into the right frame of mind before you begin should be part of your preparation plan.

• aim to be tough, business-like, alert and unyielding
• don't feel you owe them anything - don't be a bowl-beggar
• don't put yourself above or below them
• stay relaxed and unhurried
• don't reveal your feelings at any point.

There is no guarantee that good preparation will lead to success in negotiations. But the chances are that poor preparation will lead to failure. Don't take that risk. Pull out all the stops to get a head start and you won't regret it.

source :

- https://www.skillsyouneed.com/ips/negotiation.html diakses pada 21/7/2018 jam 16:19

- https://en.wikipedia.org/wiki/Negotiation#Types diakses pada 21/7/2018 jam 16:55 WIB

- https://www.businessknowhow.com/growth/negotiations.htm diakses pada 21/7/2018 jam 17:04 WIB

How to Attract Clients? PART 2

10 Reasons Why Customer Referrals Matter

The only way to grow your company and make more money is to increase your sales. It takes a lot of work to make a single sale. With all the work and money involved, you’re always looking for a way to maximize your effort and expense so that you can grow your bottom line. No matter how long you’ve been in sales, you already know that getting a sale through cold calls is tough. It’s always easier when a friend or client recommends your products or services to someone else. This is one of the reasons why customer referrals matter and should be an integral part of your sales and marketing plan. Here are some more reasons to consider.

> Closing Larger Sales

You want your sales staff to invest their time in making large sales versus a bunch of small sales. Each sale requires a minimum investment in time and energy spent pursuing it. Of course, the larger sales are the ones that are most difficult to close.

This happens when the person placing the order is distrustful of salespeople. This occurs often at the beginning of the relationship. When you start a sales call with a customer referral from someone the prospective customer respects, they will start out with a higher level of trust. This encourages them to place a larger order, which equates to a larger sale for your company.

> Creates an Expectation

When you ask a client to refer you to a friend, it creates an expectation that your company and your customer are working together. This helps your customer get excited about your company and doing business with you.

When your customer has a sense of excitement, it transfers to the person that they refer to your company. You want your prospective customers to come to you with a positive perception already in mind. This makes getting the sale much easier and increases your closing rate.

> Customer Referrals Breed More Referrals

In this case, customer referrals are a lot like a snowball rolling downhill gathering up more snow as it goes. When someone buys goods or services from your company based on a customer referral, then they’re more likely to tell others in the industry if they had a positive experience.

If each company tells five more companies, and then those companies tell other companies, then you see exponential sales growth. This is an effect that you want to have on sales for your company. In this way, you turn each person providing a referral for your company into an unofficial salesperson without that expensive salary.

> Reaffirms the Reasons Your Customers Do Business With Your Company

When a customer calls a friend of theirs or a counterpart at another company and refers them to buy your goods or use your service, it reminds them why they like to do business with you. The reason could be a customer service representative that they like to talk to on the phone or the number of colors you have available in a certain product.

No matter what the reason, when they tell others, it spurs them to place larger orders from your company themselves. It affirms that your company offers value, quality and a host of other benefits to them.

> Customer Referrals Cost Your Company Very Little

The cost to your company when one of your customers refers your goods or services is exactly nothing. You haven’t mailed out a catalog, made a long distance phone call or paid someone of your sales team to stop by the customer’s business. Word of mouth is a powerful driver of sales for any company that takes advantage of it.

Once you establish a way to harness customer referral business, it will keep building without expense to you unless you choose to establish some sort of rewards program for customers referring other clients.

> Appeals to Your Client’s Ego

There is nothing more flattering than for someone to think enough of you to ask a favor from you. When you ask a client to refer your company to someone else, you are paying them a compliment by implying that his opinion has weight in his social and business circle.

Conversely, when he offers up your company’s name as a referral, he shows that the person that he is referring values his opinion in your company. Your customer gets a double ego boost by providing a referral for your company. Hopefully, this means they’ll do it over and over again.

> Increased Closing Rate

How many leads and sales calls does it take your sales team to close a deal? According to the Huffington Post, companies see up to an 80 percent rate of closings when the sales call came from a strong customer referral and makes the company money.

This is in sharp comparison to the 1 percent of cold calls that end with a sale. The percentage of sales calls ending in a sale when the client calls the company is only between 15 percent and 30 percent. As a business owner, you know how important it is to have a high closing rate on sales calls of any kind and your effort should strive to make the most of those opportunities.

> Can Tremendously Increase Your Overall Sales

When someone refers your company to someone that they know through business or social circles, they know that your company is a good fit for that person or business. This translates to higher overall sales for your company because the new customer is already looking to buy the products or services that you’re selling.

When they see your company’s product line, they immediately find the items or services that they wanted and purchase accordingly. However, this level of purchasing can wane over an extended period.

> Referred Customers Remain Loyal

A recent study showed that bank customers who opened an account from a customer referral were 18 percent more likely to stay with the bank than new customers who weren’t referred.

When these new customers with referrals arrived at the bank, they already knew that the bank’s hours, days of operation, and other key features were a fit to their needs. People who refer your company to other people provide the same types of information. Long-term customers help build a study revenue stream for your company.

> Shows Your Company Is Doing It Right

If your company is offering a great product or service at a good price point, then your customers will be more than willing to send referral business your way. In fact, 83 percent of customers who have a positive experience with your company are willing to offer your company as a referral to others.

When your sales team asks a client for a referral and gets one, this is an affirmation of the job your company is doing for that client. In addition, these types of customer referrals instill more trust in the prospective clients.

Customer referrals are important to your company for many reasons and almost always have a positive effect on your bottom line. It pays to encourage your sales staff to seek out referrals. In some cases, you might consider creating a customer referral program to reap the many benefits.

source :

- https://tallyfy.com/customer-referrals-matter/ ; diakses pada 21/7/2018 jam 16:15 WIB

How to Attract Clients? PART 1

Here are strategies to attract new customers and keep them

1. Fear. Small business owners run away from marketing because they don’t get it. They reason that they have no time with all the tactical daily actions they need to take everyday. They can’t pause long enough to actually understand it. 

The action to take: Stop on a monthly basis to plan your marketing strategy. Specifically, what actions is the company executing daily to attract new customers and keep the ones they have.

2. Not measuring marketing results. There is a perception that any money spent on marketing will yield poor results. In fact, the old saying is that the business owner knows that 50 percent of their marketing is working. They are just unsure of which 50 percent!

The action to take: Only invest in marketing that is traceable and trackable. Test initiatives and then measure the results. Stop doing what fails and scale up more of what succeeds. If nothing works, keep taking small actions until something is successful.

3. Too much dependence on referrals or word of mouth. Small business owners reason that if they offer a great product or service, new customers will automatically come or be referred to the company. This is very far from the truth.

The action to take: Instead, proactively get referrals by asking customers and encouraging them to share their experience on social media.

4. No storytelling. Most companies sell features and products. Unfortunately, prospects buy solutions to their problems and the best way to solve these are by telling a company story.

The action to take: Ask employees what the company’s story is. Craft a narrative that is both true and inspiring.

5. No systematic marketing. When things are slow, small business owners market their products. As soon as they land customers as a result, they get too busy doing the work to keep marketing. This keeps their business flat and makes the company almost invisible online. Remember, you can’t sell anything to anyone; you just need to be there when they are ready to buy.

The action to take: Monthly, assemble a systematic marketing plan which will be executed no matter how busy you get. This can include online paid marketing, email content marketing or social media.

source :

- https://smallbiztrends.com/2016/05/attract-new-customers.html ; diakses pada 21/7/2018 jam 16:05 WIB

WHAT MAKES A GOOD MEETING?

5 Steps to Great Meetings

meetings

Meeting formats do, of course, vary widely. Whether large or small, person-to-person, in a conference room or via web-based chat rooms, meetings can be efficient communication tools when thoughtfully conceived and well-managed. But successful meetings don't happen all by themselves. Here are 5 steps to great meetings:

1. Consider your desired outcome

Before you reserve a room and send out invitations, take a few moments to consider why you want to call your meeting in the first place. Who should be present? What outcomes do you expect as a result of the meeting? What impact do you hope to have? As with any tool, meetings yield desirable results only when their limitations are taken into consideration.

A timely email, picking up the phone, or a quick visit to someone in the lab might get you what you want much more quickly and efficiently than organizing a meeting. When mismanaged or poorly run, meetings can be counterproductive, distracting, and a waste of time and money.

2. Create an agenda

Once you clearly understand the reasons for your meeting and your intended outcomes, create an agenda. Clear agendas drive successful meetings. The agenda not only tells people what to expect, it outlines topics of discussion, sets the context and scope, lists key issues, and states desired objectives.

When sent out before the meeting, an agenda permits you and others to prepare. Avoid wasting valuable meeting time--distribute information beforehand. If appropriate, ask for input and have your most current agenda visible during the meeting. It helps keep the meeting focused and references the most current information.

3. Identify and invite key participants

Identify key people you need in the meeting. Include anyone you believe will help you get the information and results you need-;no more and no less. This list is easier to compose once you have an agenda completed. Avoid excluding knowledgeable people based on politics. Include any people, groups, or departments that you're certain will be affected by your meeting. Have a plan for distributing your results to those who were present--and also to anyone invited but unable to attend.

4. Present the issues and stay focused on the goal

Begin and end your meeting on time. Make sure you have any tools, data, and reports you need readily available before your meeting starts and put it in the meeting space in advance. Don't waste meeting time hooking up equipment, checking connections, or looking for files on your laptop if these tasks can be completed earlier.

5. Wrap-up the meeting

Once the agenda has been covered, or your allotted time is up, wrap up the meeting. Avoid the urge to continue by addressing any new issues that may come up. The wrap-up officially closes the meeting. It confirms, clarifies, and recaps what was discussed--and everyone's understanding of the situation or goals.

Confirm whether or not your meeting has fulfilled your objectives. If it turns out that your meeting has left you with additional questions, identify any new topics, suggest further action, escalate your concerns, or reschedule follow-up meetings as needed. After the meeting, distribute notes and minutes to those on your distribution lists in a timely fashion. As a final thought, solicit feedback from others.

source :

- https://www.inc.com/peter-economy/5-steps-to-great-meetings.html ; diakses pada 21/7/2018 jam 15:39 WIB

How to Establish a Meeting Agenda?

What is a Meeting?

A meeting is where a group of people come together to discuss issues, to improve communication, to promote coordination or to deal with any matters that are put on the agenda and to help get any jobs done. For any meeting to be successful it needs the support of the group involved, or the organisation behind it and it must have the intention of achieving some goal or objective.

People attend meetings for a wide variety of reasons, including work, personal interests and leisure activities.

Most people will have to participate in meetings at some point in their lives, and many people do so on a regular basis.

Meetings can take place at work, within an organisation, a sports group, a Parent Teachers Association, church group or one of a myriad of other committees.

Step to establish a meeting agenda:

1. Define the objective of the meeting to determine whether it is time-sensitive and really necessary. Examples of meeting objectives include reporting on project status, brainstorming new ideas and solutions of existing problems, managing damage control, introducing new policies, etc. Create an outline and give each topic a title followed by a short summary.

2. Identify by name the individuals who have something of substance to contribute to the agenda topics, so they will understand what is expected of them

3. Determine the amount of time needed to address each of the topics on your list. Status updates, for example, could require only 10 minutes for each participant, especially if your meetings occur on a weekly or monthly basis and everyone is already familiar with the basics of the various projects. Put your highest priority topics first on the agenda in the event that discussions run over your allocated time slots and the meeting has to be continued at a later time or date.

4. Decide whether supplemental materials for your meeting should be distributed and read prior to the meeting or handed out upon everyone's arrival. Reference these items in the agenda so participants will understand their relevance to the topics under discussion.

5. Set a date, time and location for your meeting, and place this information prominently at the top of the meeting agenda. Distribute your agenda far enough in advance that participants have time to prepare but not so far that they will set it aside and forget about it. If appropriate, send out reminders the day before.


Tip : Always ask yourself whether a meeting is the most effective way to communicate information and receive feedback.






















source :
- http://www.startrungrow.com/information/business/1,2383,1,purpose-of-meetings.htm ; diakses pada 21/7/2018 jam 15:17 WIB
- https://smallbusiness.chron.com/establish-meeting-agenda-17356.html ; diakses pada 21/7/2018 jam 15:30 WIB