Winning a new client after hammering out an agreement is a special kind of high. It can put you on top of the world as a business owner… for a day or two. But have you ever stopped to look at what caused the negotiation to work or not? Among other reasons, a major factor for success was likely that the new client felt they were getting a good deal. She felt like she won too!
Sometimes this happens easily when the prospective client happens to be a perfect fit for the type of services you offer and is the type of client you want to serve. But that probably doesn’t happen most of the time.
Additionally, how many times have you been excited to take on a new client and then found after you start working together that he was less than ideal with far more work involved than you expected? Likely the friction that developed thereafter had its seeds in a flawed negotiation process.
Because negotiation can be challenging, and even frightening, for so many people, learning more about the types of negotiations, the process and the pitfalls is important. That's why I'll be digging even deeper into the negotiating mindset and skills we need in my live breakout session at this year's Scaling New Heights, June 19-22, in Orlando.
So, how can you "up" your negotiating game and tip the scales toward more success? It starts with identifying the different types of negotiation situations and avoiding the common mistakes nearly everyone makes.
4 Different kinds of negotiation situations
You will face various situations in your business (and life) that will require some level of negotiation. As you read through each of these, consider whether you’ve ever faced them before and how they worked out for you.
1. Price negotiations
Price negotiations occur when you are in a sales situation, and you are working with a prospect to provide a package of services at a price the potential client will accept. In these scenarios, it usually comes down to whether the prospect feels you are offering what they want at a fair price or not.
2. Responsibilities and authority
The question of who is responsible for what and how much decision-making authority is granted can show up when working out a sales agreement, as well as when delegating projects and roles to a team member.
3. Conflict resolution
Conflicts are inevitable sooner or later when you have two or more humans working together. Often the root of the conflict comes down to expectations that are not in alignment.
4. Asking for help
Similar in some ways to a sales situation, this scenario involves one party asking for the assistance of another. The onus is on the requester to make the ask worth the time, effort and/or money so that the requested investment will be accepted.
Once you’re clear on the type of negotiation you’re facing, it’s important to recognize how you typically approach these situations. Just by being aware of how you typically operate will almost immediately improve your odds of a successful outcome.
5 negotiation mistakes that lead to failure
Most of us get at least a little bit nervous when we know we’re entering a negotiation situation. You can frame it as excitement (especially in a sales situation), but the truth is, most of us typically make one or more fatal mistakes without even realizing it.
Have you ever been guilty of doing any of these? (I know I have.)
1. Not considering the expectations and/or values of the other person
We all go into negotiations with expectations and what we feel are the most important objectives. While you may know what you want, if you don’t consider what the other person’s expectations and values are, you could be blindsided and be hitting on exactly what the other person doesn’t care about. When that happens, the negotiation will fail.
2. Not focusing on outcomes, but on what needs to be done
Bookkeepers and accountants (as well as any other type of technical professionals) can easily fall into this trap. While we may be more concerned about the work involved in fulfilling any commitments, the other party is more likely focused on outcomes and how they will be affected. This mismatch can cause serious stumbling blocks to finding a successful mutual agreement.
3. Trying to rush the process
In a sales situation or even with conflict resolution, serious errors can be made if we just want to settle the negotiation without taking the time to understand the full scope of what’s involved or the feelings of the other party. Humans often make decisions emotionally, so when we rush over the other person’s point of view, the result is often less than ideal and can more easily fall apart.
4. Offering only one possible outcome
No one likes to feel as though they are being backed into a corner, especially if they’re at a perceived disadvantage in the negotiation. Brainstorming possible solutions and having at least two choices to pick from can transform a negotiation from a “yes-no” decision to a “which-one” success.
5. Believing that all negotiations are win-lose at some level
This misconception is an ingrained mindset in some people and is based on a scarcity viewpoint rather than one of abundance. It will become a self-fulfilling prophesy unless it is challenged. Being willing to challenge this belief can open the door to far more success than if just one party “wins” the negotiation.
Does any of this seem familiar?
Can you learn the art of negotiation?
If you’ve gotten tangled up in any of these common negotiating mistakes, you are certainly not alone! But success in all types of negotiating situations doesn’t need to be so difficult.
If fact, there is a framework for negotiating all types of situations you face in your business (and life) that assures that you can “win” every time! Really.
Sound too good to be true? It’s not. In fact, I’ve been using this framework in my own bookkeeping business for over 20 years now and I believe it’s bulletproof. If you’d like to learn how to use it in your own business, come join me for my session at Scaling New Heights in June this year. In my hands-on breakout session, you’ll learn not only the framework I use, but you’ll also get the chance to put it to work in real situations that affect your business. Join me, won't you?