Marketing Advice for Small Companies: Counterintuitive Negotiation Tips that Level the Playing Field

It makes sense, right? The person that makes the first offer loses? Not always. In fact, the opposite can be true. Following are 5 things small companies need to know about negotiations that may create an edge.

1. It can be advantageous to make the opening offer.

Here’s what the experts say. First of all, most negotiations don’t start with an offer, they start with something far more important, which is each party’s position. There is some advantage to getting the other party to reveal his position first and that’s where you should be focusing your efforts. As far as the offer goes, if you’ve done your homework and you know the market and roughly what the other party is prepared to offer, then go ahead and throw a slightly inflated version of your top line out there. It gives you an edge by being the first to gauge the reaction of the other party.

2. You can negotiate successfully with friends.

By friends I mean work colleagues who are also friends. Professional athletes do this every day and so do attorneys. They battle it out on the court/in the courtroom with the opposing side and then go to dinner afterward. The key is to keep any confidences and personal remarks off the table; also leave your hardball tactics at home. This doesn’t mean that you can’t get what you want; it just means that you need approach the negotiations in the only way you should be doing it anyway—professionally.

3. You can walk away and still finish negotiations.

Everyone has left the bargaining table at least once in a huff, vowing never to return…then regretted it instantly. When this happens, you have 2 choices: never return or return in an even worse bargaining position. The remedy is simple. No matter how volatile negotiations become, always leave a foot in the door. Instead of saying; As far as I’m concerned, these negotiations are over or Things are a little heated and I need 24 hours to cool off; say something like I’m sorry, but I am unable to continue negotiations at this time. The genius is that you aren’t saying that you’re done, but you aren’t promising to return either.

4. Great skills are no substitute for preparation.

Time spent preparing is extremely well spent. Following are some preparations that negotiation expert G. Richard Shell advises:

Define the main issue that you want the negotiation to resolve.
Define your position.
Make a list of your specific goals (be sure they reflect high expectations).
Make a list of the other party’s interests.
Make a list of your shared interests.
Outline a few possible proposals.
Make a list of your points of leverage.
Make a list of the other party’s points of leverage.
Research and summarize credible standards and norms that are relevant to the negotiations, i.e. for a salary negotiation that would include the going rate.

The adage is that winners do more than losers are willing to do. But winners will tell you they don’t do that much more; they just do it consistently. The same applies to negotiations.

5. Even the negotiation averse can win.

Sometimes those who are highly competitive can be their own worst enemies in negotiations and those who are not naturally competitive can come out ahead. Following is some advice for the latter:

Create concrete goals that are based on high expectations.
Develop a fallback in case the negotiations fail (something other than giving in). This means always come to the table with a Plan B. For example, if you are negotiating for software rights, don’t start negotiating until you have an alternate path to success without those rights.
Take a break and bring in someone that is a little more competitive. This is especially valuable if the other party is highly competitive and doesn’t really get the whole cooperative thing.
When you are about to capitulate, but really don’t want to, use the phrase; You’ll have to do better than that because… This is the exact verbiage that Richard Shell advises. While some might argue because isn’t necessary, Shell points to research that shows any viable reason will do—the other party just wants to know that there is a reason.

The real takeaway here is that the win usually goes to those who prepare, listen, follow a strategy, and know when a compromise will get them exactly what they want.