NEGOTIATION & NEGOTIATIONS

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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