As kids, the use of negotiation tactics for bargaining what you wanted was easy. With your parents or on the schoolyard, you just showed up and used your negotiation skills to the best of your ability. No pressure, nothing to lose and the next day if you failed, you just tried again. Until we tied ourselves in a suit and tie, taking ourselves seriously as an adult and forgotten to play the negotiation game naturally.
The problem is that along the path of our lives we start acting responsible with limited flexibility to overcome headwind. Our identities were created to survive our environment we grew up in. So when the pressure of a business negotiation heats up, our solutions are hard coded in our DNA. We fall back on resources that worked in the past, but are perhaps not useful in contract negotiations. The default option was set in mode and can fail us miserably.
Personality types in business negotiations
Just picture the following three types of personalities entering a negotiation:
- An avoidant personality
If you suffer from conflict avoidance, in negotiations you probably simply ignore the problems in front of you. This way, you don’t have to deal with any negative outcomes. In many situations this is an ineffective approach. If you avoid conflict you won’t achieve results, nor address your relationships. For example, your business partners, whom you worked for years on, state to you that they want to continue the business without you. Despite all the energy you put into the venture, they want to buy you out. How would you react? Normally you avoid risks, but in this particular case does it help you postponing a deal?
- Mr. Nice personality
If you favor friendship and you because everybody likes you, in negotiations you are likely to give away more value than you should. “Is it worth it?” is the question you should ask yourself. It is good to cherish relations, but they are worth the costs of handling contract negotiations. Using a compromising negotiation strategy you try to find a solution that will satisfy everyone. This is impossible. Compromise is useful when the cost of conflict is higher than the cost of losing ground. Compromising sometimes means sacrificing important needs. It is not unusual for both people to walk away unsatisfied from a compromise.
- A confronting personality
If you have a confronting personality, in negotiations you are likely to use a competitive style and take a firm stand. You know what you want and are out there to get it on your terms. By pursuing your own goals, you don’t care about the other person’s expense. You usually operate from a position or power to put your will on your opponent. This negotiating style can be useful when decisions need to be made quickly and lasting relationships don’t matter. However, it can leave people feeling unsatisfied and resentful. The next time you come around, will they award you with what you want? How about inserting some tactical empathy into your negotiation strategies?
Now how can the personality types described above use and guard themselves to the following negotiation tactics:
- Extreme demands
For all personality types making extreme demands is only useful if the information about the value of the business is limited for all parties. If the market information is available, send out extreme demands you will only make a fool out of yourself. The confronting personality is more likely to enter into this strategy. But even this can be countered by the avoidance personality by knowing your alternatives relative to the proposal. Next to that, you can always refuse to negotiate on extreme demands requesting a serious proposal before showing your hand. Focus on your own objectives. The aim is not about making this deal work. The goal is realizing with or without this deal your set objectives.
- Negotiating concessions
Making your concessions during ‘give and take’ part of the negotiations narrower and narrower sends out a clear message. There is not much out there they get from you. Every time you make a counteroffer you diminish the concession and give your opponent less time to respond. In doing so you construct clear deadlines for their counteroffer and give the impression that soon the negotiation will be at the end of the line. This can be a difficult task for the avoidant and Mr. Nice personalities. Keep in mind that the benefits of this negotiation strategy will only work if your opponent has no better alternatives.
- Commitment and authority
If your opponent says he doesn’t have the authority to commit to a deal, you are talking to the wrong person. Have the courage to ask the other person to describe his authority. Always negotiate with a person with the highest authority and know upfront how long it takes to get an approval cleared. From your perspective be vague about your authority. Do not state your authority during negotiations unless pressed to. This gives you room to maneuver to a higher authority before making counteroffers.
- Take-it-or-leave-it negotiation strategy
First of all, recognize the ‘take-it-or-leave-it’ negotiation strategy is a clear threat. Therefore, be skeptical about these claims and investigate them closely. If your opponent has no real alternatives all he is doing is bluffing to get you sign a deal. Even Mr. Nice personality type can take countermeasures to resolve this situation. Just ignore the threat and focus on the value that meets both parties’ needs. You could just walk out and protest to the higher authority management or your opponent.
- Splitting the difference
Fair play dictates our culture, that is if both sides give equally, then it’s fair. But the only thing fairness means depend on the opening negotiation positions that each side took. Splitting the difference can be a habit you can change easy. The confronting personality has some tactical empathy to show. Never come up with it yourself. But if your opponent reaches this negotiation tactic, just answer a little dumb: “What are you telling me is that you meet me in the middle, right?”Now you have shifted the negotiating range to the midpoint and your upper limit. You already avoided his earlier given lower limit proposal. You can play the higher authority game and count him next time you meet that your bosses won’t allow you to lower the deal to the midpoint. If he blinks maybe he proposes to split the difference again. If not, you give him the deal for the midpoint price suggesting you compromise. That way your opponent feels like a winner.
Strategic skilled negotiator session
Understanding your personality type and improving your negotiation skills get you better deals. A skilled negotiator can help you setting up negotiation tactics, so you are vigorously prepared to have enough ammunition when it matters. Negotiation strategies always differ case by case and should be personalized to your needs to be effective.
If I can help you in any way with your thought process, please book my strategic negotiator service. In my experience the difference in negotiation results can be huge. With the right approach to your chances or a positive outcome alter tremendously, that benefits your life positively.Book now Business Negotiations session