Most people in business implicitly understand that nobody is going to give them something of value on a silver platter, but they still don't know how to get what they want or need in a business transaction. They don't understand the strategies and tactics involved in good negotiations and are afraid of making mistakes. In addition, many people approach negotiating without being prepared.

Regardless of job title, negotiating is one of the most common and practical functions in our lives. On a personal level, we negotiate with our spouses, children, and co-workers, and as consumers. On a professional level, meeting sponsors and suppliers negotiate daily. In short, we don?t have a choice whether we negotiate; we only have a choice as to how well we negotiate.

Negotiating is the No. 1 business skill. Experience shows that good negotiators make more money, get more of whatever they want, have more productive relationships, head off misunderstandings and settle conflicts between themselves and others, avoid being conned by others, and are more professional and effective in the way they deal with all types of people. Good negotiators reach agreements quicker and don?t waste time posturing or making demands or threats.

The good news is that everyone can improve their negotiating skills.

The first step is to recognize two precepts:

1 PEOPLE ARE DIFFERENT AND YOU HAVE TO UNDERSTAND THEIR DIFFERENCES

Good negotiators know that you have to develop "double vision" when you approach a negotiating opportunity. It is imperative to understand those you are negotiating with and try to see the negotiations from their side. In reality, negotiating is the process of working with others to satisfy the wants and needs of both parties by exchanging something of value. Negotiators who focus only on their own goals and immediate payoff will not be successful in the end.

2 NEGOTIATING IS A PROCESS, NOT A ONE-TIME EVENT

Negotiating is not a single event but a continuum of individual stages. Every negotiation has a beginning, middle, and end - and smart negotiators understand how they want the process to progress. They also understand that each stage of the process is important and should not be skipped.

• The beginning stage is clarifying objectives. Know what you want, where you can compromise and what you can give up, and your alternatives to making the deal. You must also seek to understand the other side?s position by knowing what they want, what is important to them, and knowing what options they possess. This is accomplished by doing research prior to the negotiation and by the middle stage.
• The middle stage is exchanging information. The most successful negotiators are those that come to the table fully prepared with information about what they have to offer the other side and they are prepared to ask questions and gather information. It is critical not to skip over this stage because the party with the most information about the other side?s wants and needs will always make the better deal. According to professional sales trainer and author Zig Ziglar, "You can get anything you want in life if you help enough other people get what they want."

Meeting planners should be prepared to give their sales counterparts the key information they need in order to evaluate their piece of business, i.e., total number of rooms per night, arrival/departure pattern, food and beverage requirements, meeting space needs, and meeting history regarding pick-up. Facility sales people should be prepared at a minimum to supply necessary information regarding the total number of sleeping rooms and meeting space in the facility, occupancy rate by season, average daily rate by season, and best value seasons. On a personal level, both sides should ask questions to determine whether their counterpart is a beginner or seasoned veteran, how long they have been in their current position, how they are evaluated in their job, and what their "hot buttons" are.

• The end stage is to reach a compromise and agreement. Having found out as much as possible about the other side?s wants and needs gives a smart negotiator the upper hand in striking compromises. This stage will be infinitely easier if the parties take the necessary time to navigate stages one and two. True compromise is the art of searching for favorable middle ground while helping the other side solve its "problems." For instance, meeting planners have the "problem" of finding a suitable meeting site with affordable prices and rates and with reasonable terms. Facility sales people have the "problem" of finding a suitable meeting sponsor who will accept the facility's prices, rates, and terms. The party who has done the most research about the other side will be in a better position to solve the other side's "problem" and make the deal.

NEGOTIATING STRATEGIES AND TACTICS

Understanding the various stages of a negotiation is essential if you want to improve your negotiating skills, but it?s not enough: You must have strategy and tactics. Strategies are pre-planned maneuvers to give the user an advantage. Tactics are the moves used to employ a particular strategy. Not every strategy is applicable to every negotiation and not every negotiator is comfortable with every strategy. Smart negotiators study the various strategies and tactics in order to recognize when they are being used on them.

Like the three stages of negotiation, there are beginning strategies to get the negotiations started in the direction that the user wants; middle strategies to keep the negotiation going in a certain direction; and ending strategies that are used to guide the other side into reaching the position the user wants them to reach.

Let's look at some of the popular negotiating strategies and tactics used by professional negotiators:

BEGINNING STRATEGIES

Most beginning strategies are formulated and planned before stage three of the negotiation process (reaching for compromise and agreement) ever occurs. Beginning strategies primarily deal with the attitude presented by one party to the other in a negotiation. Following are some of the popular beginning strategies used by professional negotiators.

The Reluctant Buyer or Seller

The first strategy is to act the part of a reluctant seller or reluctant buyer. It's okay to approach the other side with sincere interest, but too much enthusiasm will create an uphill battle from the other side when it comes to getting concessions. Enthusiasm is an emotion and being too emotional is a terrible way to negotiate. A seller or buyer who encounters an overly enthusiastic counterpart will automatically stick to her/his price or terms and refuse to be flexible. On the other hand, being slightly interested but not overly enthusiastic will motivate the other side to sweeten the deal in order to get you more interested.

"Feel/Felt/Found"

Inevitably, there comes a point in many negotiations where the parties strongly disagree with the position the other side is taking or the merits of their offer. Inexperienced negotiators are tempted to tell the other side just how stupid or irrational their position or offer is. If you argue with the other side they will be forced to defend their point and prove themselves right. Professional negotiators use the Feel/Felt/Found technique to address conflict and diffuse anger. The goal of this strategy is to disagree without being disagreeable.

Take for example, a meeting planner who is attempting to book her/his meeting into a popular hotel and the sales person has just told the planner that her/his meeting really isn?t very good for this hotel. Instead of blowing up and telling the sales person what a short-sighted, no-brained idiot s/he is, the planner can diffuse the situation and turn it around to her/his advantage with the following response:

"I understand how you feel about this meeting. Other hotels have felt the same way about our requirements but when they took a closer look at the type of attendee we attract and the amount of spin-off business that our meeting creates (or some other relevant facts) they found that this meeting is really a major benefit to the hotel."

Using the Feel/Felt/Found technique allows you to actually agree with the other side by showing empathy with their feelings and stating that they are not alone. This diffuses the element of conflict. You then state that others who previously took the same position later changed their mind when they considered some other relevant facts or results that showed them the advantage gained by changing their position.

The Want-it-All-Approach

Professional negotiators will sometimes use this strategy to ask for everything they can think of to be included in the deal knowing that they probably won't get it all. For instance, a hotel sales person might include in her/his proposal terms top-dollar rates, a strict attrition clause for rooms and food and beverage, meeting room rental fees, a longer than average cut-off date, and full prepayment on the master account six months prior to the event. The astute planner on the other side gasps, "Our group has never paid a full deposit six months prior to the event. The most we are willing to do is pay a 75 percent deposit thirty days prior." The equally astute sales person says, "Fine, we have a deal." The sales person gets a definite booking and the meeting planner feels like a winner because s/he negotiated a more favorable deposit term.

There are two reasons to try the Want-it-All approach. First, you just might get what you ask for. The second reason is that by asking for more than you really want, you are setting the stage for compromise. By asking for it all, you can afford to give in on one or two points, which makes the other side feel good, and still come out with a good deal. Good negotiators aren?t afraid to ask for more than they expect to get because it leaves room for trade-offs and good feelings, which is the basis for a win-win negotiation.

First Offers

Because so many people hate to negotiate, they are tempted to jump at the first offer made by the other side. Professional negotiators know that this can be a serious mistake and can even kill the deal later.

For example, consider a meeting planner who decides s/he wants a particular hotel for a meeting over a fixed set of dates in peak season. The hotel s/he wants is a four-star property well known for its high rates and prices. The meeting planner gets up the nerve and calls the sales manager to ask for a low $75 flat rate, tax included, because that's the most the planner's group has ever paid. Imagine the planner's reaction when the hotel sales manager instantly says, "Yes, we'll gladly give you a $75 rate." When the planner recovers from the shock, s/he will probably wonder if s/he couldn?t have done better or if there is something wrong with the hotel or the dates.

In the above example, the planner might actually feel cheated because s/he didn't ask for a lower rate, or suspect that the sales person is holding something back - all because the other side accepted the first offer and the planner didn't have a chance to negotiate. If the sales person had counter-offered by saying, "We can"t possibly accept $75 but we can accept $85," the planner would feel good because s/he came so close to her/his target rate. The planner might still feel a little suspicious about why the hotel came down substantially from its normally high rates but can ask more questions and exercise some due diligence later to determine the hotel?s rationale.

Professional negotiators who are highly motivated to buy or sell rarely accept the other side?s first offer. They know the best strategy is to counteroffer with slightly more favorable terms for themselves or their organization in order to make the other side feel that they have negotiated a good deal. One corollary to the rule against accepting first offers is that good negotiators rarely make their best offer first. They always hold something back so that they have room to negotiate and make concessions.

Another corollary to the first-offer rule is that good negotiators never come to the table with just one issue to negotiate. If the other side rejects that one issue, the first negotiator has nowhere to go next.

The Vise Technique

The vise technique is a very effective way of putting the other side on the spot. This technique has just seven magic words and is used to squeeze the other side?s negotiating range up or down. The seven words used to cause this effect are: "You'll have to do better than that."

Imagine the scenario where a meeting planner and hotelier are negotiating. The hotelier says, "For your group we will extend the special rate of $300 per night." The planner responds, "You'll have to do better than that." The hotelier really wants this business and feels pressure to come up with a better offer. The hotelier responds, "Okay, how does $250 sound?" By using the seven magic words the planner was able to reduce the other side's price by $50 per night thereby saving the group and its attendees a lot of money.

A good negotiator knows that there is only one proper response to the vise technique. The proper response is, ?How much better do I have to do?? This turns the pressure back on the party who started the price squeeze and forcing them to reveal their price range first. In the above example, if the hotelier had used the proper response to the planner the planner might have responded with, "Our group will commit today if we can get a rate of $285." The hotelier would then know that the rate would have to come down only $15 instead of $50.

Negotiate the Easiest Issues First

Negotiating the easiest issues first accomplishes several objectives. It starts the negotiation off quickly and it builds momentum and strengthens the relationship between the parties. When negotiating a hotel agreement, if the planner and hotel salesperson can agree on the dates of the meeting and the function space first, they can spend most of their time and energy on the tougher topics of rates, and the terms of the attrition and cancellation clauses.

Negotiate the Most Difficult Issues First

The flip side to negotiating the easiest issues first is to put the most difficult issues up front. For instance, a meeting sponsor looking for a facility to book a large meeting might send out a request for proposal with a cover letter that says: "We are interested in considering your hotel for our meeting. If your hotel is interested in our business and can agree to accept our attrition and cancellation language (enclosed within), please complete and return the attached Request for Proposal by the end of this month." In sales parlance, this is called separating the contenders from the pretenders. For the meeting sponsor, the goal is to receive proposals only from hotels that are interested enough in the group's business to agree to a specific term up front. Of course, a hotel receiving such a request can either decline to return a proposal or make a counter-offer with terms in the attrition and cancellation clauses that they can accept.

For the planner or hotelier in this example to be successful, the offered terms must be reasonable to be taken seriously.

MIDDLE STRATEGIES

Now that you have used the beginning strategies to establish the other party's objectives and negotiating range, it?s now time to keep the negotiation going in the right direction. Following is an overview of several popular middle strategies used by professional negotiators:

A Higher Authority

Many business owners and organization leaders use agents to negotiate on the owner's or the organization's behalf. An agent in this context can be an employee, such as a sales manager or staff meeting planner, or an outside side agent such as an independent sales representative, an independent meeting planner or even an attorney. This is not only good time management, since business owners and organization leaders can't be everywhere to handle every deal, it is also a good negotiation strategy.

The strategy of using agents to negotiate for someone is simple. When the person who has the authority to make the final decision actually does the negotiating, the person negotiating on the other side only has one person to convince. If an agent is used then the party doing the buying or selling on the other side must work harder to convince her/his counterpart, the agent on the other side, that the deal is worth taking to their principal, i.e., final decision maker, for approval. Good agents know what their negotiating authority is and they know that when the pressure is on to accept a bad deal from the other side that all they have to say is, "I"ll have to get approval from (the final decision maker) before I can agree to that."

This not only delays the negotiation process but it may be merely a stall technique to give the agent the opportunity to think more carefully about the deal before presenting it to the final decision maker or before coming back with a high counter-offer. It also leaves the interpretation of the deal in the agent's hands and opens the door for the other side to have to explain the deal all over again to the final decision maker.

One of the first rules that professional negotiators try to follow is to negotiate at the proper authority level.

In other words, its quicker and more efficient to negotiate with the final decision maker who has the authority to say "yes" to the deal. Professional negotiators will always start by asking the other side what their authority level is and whether they have the authority to make the deal right away, if the terms are within range. The only way to deal with an agent who has no authority and has to get every term approved by someone else, is to insist from the outset that all persons who are required to approve the deal be present during the negotiations. You will not always be successful in dealing directly with the final decision maker but the times you are will be worth the effort in the end. I have postponed many negotiating sessions when I discovered that all of the parties in the decision-making process weren?t present.

Splitting the Difference

In many negotiations, there comes a point where all terms have been agreed to except the price. One side says their final offer on the price is $X and the other side says their final offer is for the price to be $Y. There is a great temptation on the party that wants the deal the most to suggest that the parties just split the difference and agree to a price midway between $X and $Y. Professional negotiators know it's better never to offer to split the difference. Instead, it is preferable to get the other side to offer to split the difference first. This gives the first party a measure of control and it allows the possibility of working out a split that is a little better for your side than the standard fifty-fifty. Further, agreeing to split the difference may not always be the best solution because it assumes that both parties have made "final offers" that are equally distant from their theoretical "best offer."

To get the other side to offer to split the difference first you should stress how close you are in price and how it's a shame that the two of you have invested so much time in trying to put this deal together. You should keep emphasizing the narrow price gap, the time you both have invested in the deal already, and how much your side wants to finalize the arrangements if the price was more favorable to you. After a while the other side will probably lose their resolve. They will realize that a lot of time and effort really has been spent negotiating and discussing the arrangement so far and it really would be a shame for the deal to fall apart when the two parties are so close in price. This is the point where the other side will suggest that the two of you just agree to split the difference in the price. At this point, the other side has three options if they sense that splitting the difference is not in their best interest because it is still too far from their concept of a fair price.

The first option is to call for an impartial evaluation or a neutral and reliable source for determining a fair price. In the meetings industry, this could be research from well-known firms that track occupancy and average rate for the city or region. It could also be rates quoted by other, comparable suppliers. The second option is to agree to split the difference if the other side will make concessions in other areas of the deal to make up for what your side is losing. The third option is to refuse to split the difference if the result is manifestly unfair to your side.

The Trade-Off

Smart negotiators use this technique to keep the negotiations balanced and to add value to the terms the other side keeps requesting. The essence of the trade-off technique is to never give a concession without asking for a con

cession in return. This is accomplished by simply asking, "If we do that for you, what will you do for us?" It is important to look for patterns in the types of concessions made by the other side and to the messages you are sending with your concessions. Here are some guidelines:

• If you are going to concede in the opening rounds, concede small. A small concession gives the impression that that party's bottom line is close.
• A big concession tells the other side that a lot more can be conceded before the bottom line is reached. Big or quick concessions undermine the credibility of that party's opening offer.
• All concessions telegraph the message that more concessions will be made.

The Set-Aside Technique

In most negotiations, there comes a point when the parties run into a deadlock on certain terms on which they cannot agree. Between planners and suppliers, the deadlock may be over price terms, deposits, cut-off dates, amount of comp meeting space or even terms of attrition or allocation of risk and liability.

Professional negotiators know that the best way to prevent a deadlock from turning into a fatal impasse is to set aside the sticky issues and come back to them later. Setting aside the sticky issues lets the negotiators focus on the easy issues first. Focusing on the easy issues builds momentum and makes both sides feel that a final deal really is possible. After both sides have invested time and energy in focusing on the terms on which they do agree they will have more resolve, motivation, and flexibility to find solutions to the tough issues.

ENDING STRATEGY

There are many ending strategies, but the most effective is:

Walk-Away Willpower

Sometimes a deadlock does turn into an impasse. When this happens, the disagreeing parties can resort to objective criteria and even outside help, such as arbitrators or mediators, to resolve their differences. Even professional negotiators sometime come to the conclusion that the deal on the table is bad for their side even though they have used all of the techniques and strategies at their disposal to make a deal that is fair and equitable to both sides.

Professional negotiators also know that the most effective ending strategy is having the willpower and the ability to walk away from the deal. It is dangerous to bluff this strategy because the other side may call your bluff and you won't have anywhere to go. Professional negotiators actually plan this ending strategy before they become involved in a serious negotiation. In the meetings industry, a meeting planner should never settle on just one hotel or convention facility with which to negotiate. Smart planners will send Requests for Proposals to multiple properties and/or facilities and will indeed negotiate with multiple properties and/or facilities so that they will have more than one option to choose from. On the other side, professional sales departments know that it is their job to stimulate interest in their facility so that they have a variety and choice of business to chose from. Creating competition for your business or product is a smart and powerful negotiating tool. If the other side realizes you have options, and smart negotiators make sure the other side realizes it, the value of the business or the product is increased in the eyes of the other side. The psychology here is simple: If someone else wants the same meeting or the same hotel as you want then you are likely to want it that much more.

The Harvard Negotiation Project calls this strategy "Developing Your BATNA (Best Alternative to a Negotiated Agreement)." Professional negotiators always approach a negotiation knowing what alternatives are available to their side if they can?t reach a satisfactory negotiated agreement. By knowing what their BATNA is they can evaluate the deal on the table and decide if it's better or worse than their alternative(s). Smart negotiators never let the other side know that they don't have a better alternative. To do this is like telling the other side to fill in the blanks in the contract for you to sign blindfolded. Meeting sponsors always have the alternative of postponing or not holding the meeting if the terms and the risk proposed by the other side are too harsh. Hoteliers always have the alternative of letting the rooms and space go empty if the terms proposed by the other side don?t allow them to make a profit on the business.

Most professional negotiators weren?t born that way. Negotiating is both an art and an acquired skill that can be learned and perfected with experience. Individuals who want to be looked upon as professionals by their peers and counterparts in the business world should constantly strive to learn the time-tested strategies discussed above, as well as additional strategies well documented by others. 

 2005, John Foster, Esq., All Rights Reserved John Foster, Esq., CHME, is an attorney and counsel whose firm specializes in the legal aspects of meetings and conventions, trade shows and events, and association management. He is the author of four books, Meeting & Facility Contracts, Meetings & Liability, Independent Meeting Planners & the Law, and What Every Hotelier Must Know About Legal Affairs Management. His practice is in Atlanta where he can be reached at (404) 873-5200 or John.Foster@FJGLaw.net.