Brush up your negotiating skills with these tips
Like many in the industry, when I first became a shop owner, I found myself having to negotiate on a daily basis. I was writing the estimates and interacting with customers and insurers. I was negotiating agreements with vendors. And certainly hiring and retaining employees involves ongoing negotiations.
I'm not one of those fortunate people for whom negotiating successfully comes naturally or easily. I've had to learn it both through classes and reading and also through experience. But I've also been able to build the business sufficiently to bring in those who are better-skilled to handle some of the day-to-day negotiating that I don't enjoy.
That said, no matter what position you hold at any size shop, you're likely often negotiating in some way with vendors, insurers, customers, employees (or employer) and co-workers.
Here are some tips to better negotiating that I've picked up from various sources over the years.
- Make sure you have the information you need. I'm lucky enough to have a pretty good memory. Having studied and remembered the estimating "procedure pages" over the years has always been helpful when "negotiating" with insurers. It's something those of us in the front office talk about — needing to understand the estimating systems (the one we have and the two we don't) as well as, and preferably better than, the appraisers we're working with. That's part of being prepared for any type of negotiation. You also need to know what you want and need and what you are willing to give up. You also need to know your limits so you know when to walk away.
- Body language speaks volumes. I remember an instructor at a negotiating workshop advising us to always uncross our arms and legs when negotiating, face the speaker and make eye contact. This is supposed to communicate an openness and a willingness to negotiate honestly.
- Listen. Don't let your preparations lead you to prejudge a situation and presume you know exactly what the other party wants. You hear it over and over again: Successful negotiators listen more than they talk. That's how they learn what the other side is looking for, which is what you need to create a win-win scenario. Like every shop, we occasionally have a customer who is unhappy about something. If it's not clear to us, we usually ask what they would like us to do to address the situation. Often they ask for less than we might have been willing to offer them.
- Start with a secondary matter. I remember reading somewhere that good negotiators often open the conversation with an issue they're not as concerned about. Say the lease on your building is about up. The property owner is proposing a five-year lease at a slightly higher rate. Your main concern is being able to get out of the lease in 18 months because you're planning to move once another building becomes available. Start the negotiations focusing on the increased rate. By eventually conceding that point, you'll have more leverage when you bring your main issue to the table.
- Know where you stand. Listening to vendors at various meetings over the years has helped me realize that they don't value every shop's business to the same degree and that they rarely hear anything other than pleas for extra discounts. And it's not always just a matter of your volume of business; vendors see some accounts as more valuable even if they are not as large as others because, for example, they require fewer deliveries, have fewer returns or pay more promptly. Help yourself by getting some idea of where you stand in terms of other shops a vendor serves so that you don't ask for too much or too little. Consider going into the negotiations ready to offer something to give the other side more incentive to offer what you want.
- Think long-term. Most of the people you negotiate with are people you will continue to interact with in the future. Part of negotiating successfully is building a relationship. You shouldn't accept a bad deal just for the sake of remaining "on good terms" with a person or company. But being overly aggressive or ruthless, or not bargaining in good faith, may bring short-term benefits that can destroy the long-term opportunities you have with those on the other side of an agreement.
- Don't take it personally. This is something I often struggle with. If you feel yourself getting emotional, ask to take a break or move on to a less difficult negotiating item and cool off before returning to the sticking point.
- Don't be overconfident. My favorite negotiating tip came from Norm Brodsky, a monthly columnist in Inc. magazine, who recommended always assuming other people are smarter than you. When you think you're going to be able to outsmart other people, you stop paying attention and listening for the information you need, Brodsky wrote. He said he has written the word "dummy" several times on a back page of the yellow pad he takes into negotiating sessions.
"Whenever I catch myself thinking how brilliant I am, I open the pad to that page, give myself a silent whack, and go back to listening," Brodsky wrote.
Negotiating is as much an art as a science. As with any art, performing it successfully requires lots of practice. Considering how often you use negotiating skills and the impact they have on your business, it's worth some effort to get better.
