Simplify Negotiations with the Six Rules of Effective Communication

To negotiate effectively, you must be able to communicate effectively. Unfortunately, most salespeople and businesspeople don’t realize the importance of solid communication skills to the negotiation process. As a result, they lose sales or don’t get the best possible deal.

However, as a salesperson, you are not doomed to the mixed messages and meanings characteristic of poor communication skills. With a conscious effort, all business and sales professionals can overcome the communication barriers that block understanding in negotiation. With a little extra effort, you can improve the delivery of your message to your counterparts and work together toward a mutually beneficial agreement.

Use the following six rules for effective communication to connect with others at the negotiating table and in all forms of communication:

Rule 1: Organize Your Thoughts

Throughout the negotiation process, always allow yourself time to organize your thoughts to avoid conveying the wrong message or confusing the issues. Before you start the negotiation process, and even after it starts, take notes and plan what you’re going to say.

To help you express your thoughts clearly when the negotiations begin, outline in advance the main points you want to cover. Planning the gist of what you’re going to say is the most effective way to avoid sending mixed messages, but don’t stop with that. As the negotiations commence, continue to take notes and plan your responses as you go through the entire process. And remember, no law exists that says every statement must be met with a response within five seconds. Take your time. In fact, silence can be one of your most powerful negotiating tools.

Stop talking whenever you feel like you need to reorganize yourself and before you respond to anything that’s said. And make sure everything you say reflects the true meaning of your thoughts. This tactic not only helps you organize what you’re going to say, but it also helps you digest what your counterpart proposes.

Rule 2: Don’t Think About It; Think Through It

Thinking about something leads to confusion, but thinking through something leads to clarity. The difference between these two processes is a crucial distinction in communication. Many times, people approach negotiations with a mindset of, “Tell it like it is, then let the chips fall where they may.” But by processing an idea through to its logical conclusion, you can evaluate the possible responses you may get from the other side.

For example, if you make an offer and say, “Take it or leave it,” what kind of response would that produce? The other party may say, “Okay, we’ll take it.” They could say, “Thanks, but no thanks.” They could say, “We won’t take it, but here’s what we will accept.” Or they might say, “No one talks to us that way!” and walk out of the room.

A range of possibilities exists, and this tactic requires careful reading of the other person’s reactions. But if you feel from your experiences with the person that they will either accept your offer or your counteroffer, it makes sense to speculate and take the chance. So give some thought to your counterpart’s possible reactions to your points before you actually make them.

Rule 3: Recognize that Actions Speak Louder than Words

Experts say that seventy-five percent of communication is nonverbal. This means that the messages negotiators convey have more to do with their looks, their actions, and the way they say things, than with the actual words they say.

The best negotiators practice saying and doing things in ways that send precisely the message they want to send. The bottom line is that the better you become at using nonverbal communication and reading the nonverbal messages others send, the more effective you can be as a negotiator. Realize that everything you do at the bargaining table is part of the communication and negotiation process. So make sure you don’t send the wrong messages by doing something that conflicts with what you want to say.

Rule 4: Be Concise

Most people tune out a majority of what they hear, so you should always be concise and get right to your point. Say what you mean in as few words as possible, without being blunt. If you drone on, people will stop listening to you. To ensure your message reaches your counterpart, always oversimplify your message, and then elaborate as they ask questions. Repeat your main point several times to emphasize what’s most important.

To boost your negotiating power even more, practice saying everything clearly and concisely, then repeat your key points to yourself again and again. One main problem with negotiation communication occurs when your counterpart gets too wrapped up in what they want to say, that they don’t pay attention to what you say. This is why it is so important to organize your thoughts, and say your main points in a concise, compelling way.

Rule 5: Always Translate Your Message into Benefits for the Other Party

People always listen more carefully when they believe some benefit exists in your message for them. In negotiations, focus on that benefit, even when the underlying purpose of the message is in your favor.

For example, when you interview for a new job, you don’t talk about the huge salary the company can offer you. You talk about all the great skills you can bring to the company, for their benefit. You try to convince them that they’ll be ahead of everyone else by hiring you, regardless of the cost.

As a salesperson, you should always highlight the value of your product or service, rather than the cost. Always talk in terms of what benefits the other party receives as a result of the negotiation terms.

Rule 6: Listen Carefully to the Other Party

If you want to reach a mutually beneficial agreement, you must make sure your message are heard and understood. But don’t get so caught up in your own message that you don’t hear and understand what the other party needs to reach an agreement. Use the following tips for listening more effectively:

  • Open your mind and be receptive to the other party’s message.
  • Make a commitment to listen, and follow through with this commitment as soon as they start to talk.
  • Listen for feelings, as well as facts, and consider the other party’s concerns.
  • Eliminate distractions. Close your door, turn of the radio, and tune in to the other person.
  • Respond to the other party with questions that stimulate conversation and clarify your understanding of his or her message.
  • Take notes on the important points the other party makes, and keep these points in mind as you formulate your responses.

As you improve your listening skills, you increase your negotiating effectiveness by collecting more information to use in your search for solutions. Communication is the Key to Effective Negotiation Communication is a two-way street that requires everyone involved to exchange messages. To negotiate more effectively, you must relate to the other party with strong communication skills. By using these six rules for effective communications, you can overcome barriers, reach a higher level of satisfaction every time you negotiate, and win more sales in the process.


Joint Venture Financing – How to Present Yourself and Your Project to Get Funded

Welcome to 2010, the defacto year of Joint Venture (JV) financing. Institutional financing is not available so developers are looking outside the box to fund their projects. The most common form of favorable financing is JV. This financing comes in more shapes, sizes, and terms than colors of the rainbow. There are, however, a few common things that all JV funders look for, regardless of the project, location or dollar amount. The purpose of this article is to share with you what these common denominators are and how you should present your project to get the most favorable terms.

Let’s look at this from your potential funder’s perspective. What does he want? The answer is simple, but arriving at achieving his goals involves a tremendous amount of scrutiny and due diligence on you, the developer. Quite simply, the JV funder wants a return on his investment. You must speak his language. What he wants is a pro forma that shows what his internal rate of return (IRR) is at two and five years. If you cannot prepare one of these, find someone who can. This document or spreadsheet shows vision and the common goal of making money.

Everything else is secondary, but also very important. You need to prepare a package that consists of the following items:

an executive summary of the project that is no more than 5 pages (no funder will read a 120 page business plan before reading an executive summary)
the proforma
bios and resumes of all of the key players, including your contractors
the entire business plan
an appraisal if you have one
Logically, the funder has the money. You have to prove that you have the brains, muscle and integrity to be a great and cooperative partner. Your opportunity is not the only one on his desk, but it will certainly be the most presentable. Sloppy presentations make for sloppy projects.
Finally, the worst thing you can do is put pressure on the funder to act or fund immediately. Desperation only indicates weakness and poor planning.

\”Do You Know How To Be A Powerful Negotiator” – Negotiation Tip of the Week

He was pompous, screamed at others while demeaning them, and not well-liked – most of his associates detested him! Some wondered if that was why he’d been stuck in the same management position for over a decade. Plus, he was not a good negotiator – he lacked insight on how to use power. He used bullying tactics with his subordinates (i.e. you’d better do this or else), and veiled threats to delude his peers to get what he wanted. Everyone collectively swore they’d get even with him. And one day they did.

Do you know how to be a powerful negotiator?

Sources of Power and How To Use It:

Voice inflection – There’s power, or lack of, in the way you speak. You can make a statement that sounds like a question or a question that sounds like a statement simply by the inflection in your voice. To sound more powerfully, apply a deeper tone to your voice when emphasizing words of greater importance. This is especially true when negotiating. A deeper tone on, that’s my best price, conveys more conviction to your statement.

Positioning - Whether it’s your physical proximity to others or the proximity of your words, what proceeds your words impacts their perception. Therefore, be mindful of when you speak. If you speak after someone has delivered a rousing proposal, your words may be received with less enthusiasm. The same is true of your physical proximity to others. If you’re physically close to someone with power, your words will carry greater weight simply because of that proximity. Others will assume that there’s a sense of power bestowed upon you from the power person in the environment.

When negotiating, consider the order of your offers and their alignment with people of power. You can also make a prior offer appear to be better by downgrading the one that follows it – in that case, your message states that the trajectory of the offers to follow will become progressively worse.

Manipulation - A negotiator can gain momentary power through manipulation (for this purpose, the word manipulation is neutral – it’s not good or bad). One can use it to feed the other negotiator’s desires by embellishing the item he seeks from you. By doing that, you heighten his sense to acquire it.

To embellish an item, highlight how the other negotiator will feel, and/or appear to others once he’s acquired it. Take note of his body language as you make your summation. If he slips into a dream-like state while smiling and becoming dreamy-eyed, he’s also imagining the great sensation he’ll experience once he’s acquired your offer – you got him! Continue down that path and extract whatever he’s willing to forgo to acquire the offer. Be careful not to turn embellishment into a lie. That might come back to haunt you.

Likeability - Never underestimate the hidden value of likeability. It’s a factor that has swayed many negotiators. I’ve seen lower offers accepted because of it. It’s easy to be likable with most people – just be pleasant. Warning – with some bully types, you’ll have to meet power with power. Thus, the likeability factor may be a detriment. Instead, seek to become respected – respect will be the source that cedes greater power to you.

You’re always negotiating:

In the situation with the manager, mentioned at the beginning of this article, others did exact their toll on him. It occurred when subordinates and his peers combined forces – they informed senior management that they’d no longer work with him. The manager didn’t realize that he’d been negotiating with those folks during his tenure with the company. He used his power recklessly. And now their power was coming to bear against him – senior management fired him.

I love to observe people with power. To be specific, I note how they use it, to whom they extend it, and how they’re altered by it. It’s said that power doesn’t change you – it amplifies who you really are. To that point, always keep in mind, the way you treat people impacts their perception of you. Thus, if they perceive you as an ogre, they’ll be less inclined to assist you in achieving your goals. Therefore, use the sources of power as partners in your negotiations – they’ll increase the perception of you being a powerful person. That will lead to more powerful negotiation outcomes… and everything will be right with the world.

Remember, you’re always negotiating!

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