I am so enjoying my Negotiation class! Today I had my first formal negotiation exercise. Basically the class is divided into two, each of which takes on one out of the two roles in a given context. Each of us is given some confidential instructions to prepare with. In class, we will then come together as pairs (a buyer and a seller) to negotiate. To put it simply, we were supposed to “verbal-fight” and agree on a price for our business contract.

I did not do as well as I had expected. I did the one single big mistake of a negotiator - that is softening up to your opponent. I made the first offer of $40 to exert some anchoring influence. She responded with $7, a price so extreme and unexpected that it threw me off balance. $30 was my next offer, a mistake in itself simply because I just revealed how flexible my bargaining power could be with that $10 concession. She exploited this and brought the price up to $10. After a couple of bargaining, her minute concessions convinced me that the maximum she was willing to paying was between $10 and $20. Her best move was when she told me even at $24, they will be making a loss. Hearing that, I put myself in her shoes and empathized with her. Strangely, I feel obliged to help her. We finally agreed on $20, an advantageous position for both of us, though I could have taken a bigger slice of the pie. It was later revealed by the teacher that the other party could accept a price of up to $35. Ugh!

Time and again, I have seen my positions and emotions easily swayed by circumstances and what people say. I need to learn how to remain firm and decisive, once my game plan is fixed. He who hangs in there the longest wins.

Negotiation is really a game of manipulation. There are so many tactics you can employ, even in a simple price-bargaining situation. From the way you speak, the types of concessions you make, right down to the amount of pause you use before making a counter-offer, you hold the key to changing the other party’s perception, and thus the result of the agreement. As much as the “on-stage” performance matters, prior preparation to leverage on any bargaining power means a huge part of the success too.

10 strategies I learnt to conducting a successful negotiation:

1. Know your next best alternative if you fail the negotiation
2. Research on the other party’s next best alternative
3. Aim high
4. Make the first offer if you are confident of the price range
5. Counteroffer immediately
6. Don’t state ranges
7. Make few and smaller concessions, one at a time
8. Use an objectivee-appearing rationale to back your offer
9. Appeal to norms of fairness
10. Do not fall for the “even split” ploy

I am really looking forward to selling my car.