8. Always negotiate with the person with the highest authority. The more authority the person has, the more concessions they will make. Every sales person has the authority to say, "No, we can't do that." You need to find the person who can say "yes" to terms that aren't in the sales manager's script by asking the right questions up front. For instance, you might say to the sales person, "Do you have the authority to negotiate terms that differ from your standard contract or is there someone you have to go to for approval?" Let's say the sales person responds with, "I have certain parameters and if you ask for something outside of those parameters I have to go to my director of sales (or director of marketing, or general manager) to get him or her to agree to it." Your response should be, "Fine, please set up a conference (or conference call) with you and your director of sales so that we can get resolution on some of the items that may be sticking points." If you are already negotiating with the person with the highest authority in the sales department ask him or her the same question. If s/he says, "I have the authority to agree or disagree with any terms discussed," then you're set. S/he can't later say that someone else's approval is needed without it appearing that s/he lied to you.

People with authority don't want to appear to be weak or powerless in front of their customers or their subordinates. Here's another tip: Sales managers try hard to keep general managers out of the negotiation process because general managers make the most concessions of all.

9)Don't take free gifts: Ask for a trade-off. This tip is the secret of keeping negotiations balanced and keeps the playing field level for negotiators with a weak position.

Making trade-offs is what negotiations is all about. The concept is simple: Don't give a concession to the other side without asking for a concession in return. A concession made without a concession in return is called a "free gift." When the sales manager says that the best s/he can do on the rate for your group is $350, and you are looking for a rate substantially lower you should respond with something like, "If we agree to the rate of $350, will your hotel agree to a substantial discount off the catering menus, no meeting room rental, and better terms in the attrition and cancellation clauses?" Your response means that your agreement on their price has a price attached to it. The sales manager can either say "yes," "no," or counter with another concession s/he wants you to agree to.

Japanese negotiators have perfected this negotiating guideline even further by adding to it the rule that one should never say "no" in a negotiation. Instead, they respond to every proposal with a "yes, if" statement. They follow the guideline of never saying "no" so that the other side never loses face. This preserves the relationship and makes it easier for the parties to continue negotiating and/or continue doing business together. Here are some examples: "Yes, we will agree to X if we get Y in return." "Yes, we will agree to X, but then we won't be able to do ABC." "We will agree to (something other than X) if we get ABC in return." "We will agree to (something other than X) but then we won't be able to do Z."

As you can see, there are two alternatives on each side of the "give-get" equation. On the "give" side you can offer the other side: a) exactly what they asked for, or b) something other than what they asked for. On the "get" side, in exchange for whatever you're offering the other side, you can: a) require them to give you something in exchange, or b) take away something you had tentatively conceded earlier .

10)Start "high" by asking for more than you expect to get. Statistics show that there is a direct relationship between your opening offer or counteroffer and where you wind up. "Start high" means start with an assertive - not ridiculous - offer or counteroffer. If you're the buyer, it means start with the lowest price and/or best terms to which you are willing to agree. If you are the seller, it means start with a high price or strict terms. In some instances, you just might get it. However, if you always start with your "best offer," there is nowhere to go if the other side rejects it. The negotiations might deadlock - or worse, the other side might get resentful because you don't have any concessions to offer. If you ask for more (within reason), you will get more and keep the negotiations moving forward.

How high is too high depends on the circumstances, but usually it means just outside the current market conditions. Remember, at some point too-high offers are destructive. The other side looks at your offer as insulting, frivolous, or ignorant. If you think your opening offer or counteroffer will be viewed as ludicrous, then you should imply flexibility. If you present your ridiculous opening offer or counteroffer as "take it or leave it," the other side may tell you to take your deal somewhere else because there is nothing to talk about.

11)Follow a dramatic initial concession with sharply diminishing concessions. Concession management is the art of making the right concessions at the right time - knowing whether to give big concessions at the beginning or at the end. How you manage your concessions will greatly influence the outcome of the negotiation. The overriding concept behind concession management is that the other side will continue extracting concessions from you if they think you have more concessions to give. Successful negotiators diminish the other side's expectations of more concessions by sending a progressive signal that they are running out of concessions to give whether they are or not. The primary goal of concession management is to lead the negotiated price and term down a path that ends where you want it to - your target price and/or terms.

Here are some guidelines:

a) Don't make concessions too early, but when you do, make your biggest concession first. Successful negotiators avoid making concessions early by negotiating the easy items first on which both parties readily agree. This sets the tone and builds momentum by getting the negotiations moving forward.

b) Each succeeding move should be smaller than the one before it. This sends the message that you still have some flexibility, but your ability to give in is diminishing. The corollary here is never make a concession that's larger than the one preceding it.

c) Use the "rule of halves" when making concessions. The rule says that each successive concession you make should move you roughly halfway from your present position to your target.

d) Your last concession should be your smallest, and made with some reluctance. As you get close to your target, your concessions become smaller and smaller. Hopefully, the other side has gotten the message that you have nothing else to give on the issue and you have reached rock bottom.

12)Use the set-aside technique when you reach an impasse.

Never stick to an issue that isn't working. Set it aside and move on to something else. When you come back to it later, you have a greater chance of success because momentum has been built and the other side will probably be more flexible in their concessions.

13)If the other side won't negotiate, take the lead.

Even skilled negotiators run into situations when the other side won't negotiate a particular point. If your previously loquacious sales person suddenly clams up and won't negotiate an issue important to you, it's time for you to sweeten the pot and negotiate for him or her. Consider this conversation: You: Is $350 per night your best offer? Sales Manager: Yes. You: What can we do to lower that number? Sales Manager: Not much. You: If you can lower the rate to $250, I might be able to book a second meeting with your hotel. Would that be of interest to you? [You might get some response here that keeps the negotiation going. If not, keep going.] You: OK, if we agree to a rate of $350, we need you to agree to more favorable attrition terms and a discount on catering items. Is that agreeable? If you still aren't making progress, then set this issue aside and come back to it later after building momentum in other areas. If the other side still won't budge, then you either have to agree to their terms or fall back on your BATNA (see next tip).

14)Develop your BATNA. BATNA stands for Best Alternative to a Negotiated Agreement. BATNAs are critical to negotiation because you can't make a wise decision about whether to accept a negotiated agreement unless you know what your alternatives are. If you don't have alternatives, then you will have to sign any agreement stuck in your face. The objective in any negotiation is to negotiate an agreement that is better than your BATNA.

Having a good BATNA is the only thing that can protect you from signing a bad agreement and from rejecting terms that would be in your best interest to accept. Having a good BATNA increases your negotiating power and negotiating effectiveness.

Although time constraints and adverse market conditions are a reality, meeting managers should always try to improve their BATNAs before starting a serious negotiation with any vendor. Many meeting managers are put in the fatal position of having to negotiate with one hotel in one city because someone above them in the organization said that's where the meeting has to be booked. Being in that position with no alternatives is like inviting your counterparts on the other side to steal from you. Being flexible enough to consider and negotiate with more than one vendor or vendors in more than one city is the key to developing a strong BATNA. If the proposed agreement is better than your BATNA, then sign it. If the agreement is not better than your BATNA, then you should reopen negotiations. If reopening the negotiations doesn't improve the proposed agreement, then walk away.

Finally, even the best negotiator can't repeal the law of supply and demand. If there is only one supplier in the market with the product or service your side needs, you will lose. The only question is, how badly. By using the tips discussed here, you may lose less. And remember, many times it's better not to sign any agreement than to sign a bad agreement.

° John Foster, Esq., CHME is an attorney and counsel whose firm Foster, Jensen and Gulley, LLC specializes in the legal aspects of meetings and conventions, trade shows and events, and association management. He is an associate counsel for more than 400 national and regional associations and companies. PCMA named him Author of the Year in 2003. The legal columnist for Convene, he is the author of Meeting & Facility Contracts, Meetings & Liability, Independent Meeting Planners & the Law, and What Every Hotelier Must Know About Legal Affairs Management.
DISCLAIMER: This article is not intended to take the place of advice given by an attorney familiar with the specific circumstances and needs of your meeting and the sponsoring organization.
© 2007 John S. Foster, Esq., CHME, Atlanta, Georgia, All rights reserved, John.Foster@FJGLaw.net.