Brian Tracy: Your ability to get along with others is perhaps the most important skill you can develop if you really want to be successful and happy in business and in life. Today, everything involves relationships. The most successful people in almost every field are relationship experts. They have taken the time and made the effort to be very effective in their dealings with others, and this pays off for them in better jobs, higher pay, and more rapid promotion. This 15 part segment shares all that goes into successful negotiating.
73. The universal law of negotiating
Everything is negotiable. All prices and terms are set by someone. They can, therefore, be changed by someone. This does not mean that they will be changed, but it does mean that there is always a chance. When you begin looking at life as one long, extended negotiating process, you will find that almost every situation contains elements that you can negotiate to improve the terms and conditions for yourself and others. Prices are a best-guess estimate of what the customer will pay.
74. The law of futurity
The purpose of a negotiation is to enter into an agreement such that both parties have their needs satisfied and are motivated to fulfill their agreements and enter into further negotiations with the same party in the future. This is a foundation law of negotiating, and it applies especially to negotiations where you will be dealing with the same party again.
75. The law of win-win or no deal
In a successful negotiation, both parties should be fully satisfied with the result and feel that they have each “won” or no deal should be made at all. Consistent with your determination to enter only into agreements that preserve long-term good relations between the parties, you should always seek an outcome that satisfies both. Remember, you always reap what you sow. Any settlement or agreement that leaves one party dissatisfied will come back to hurt you later, sometimes in ways that you cannot predict.
76. The law of unlimited possibilities
You can always get a better deal if you know how. You never need to settle for less or feel dissatisfied with the result of any negotiation. There is almost always a way that you can get better terms or prices, whether you are buying or selling. Your job is to find that way. If you want a better deal, ask for it. Whatever the suggested price, react with surprise and disappointment. Always imply that you can do better somewhere else.
77. The law of four
There are four main issues to be decided upon in any negotiation; everything else is dependent on these. There may be dozens of details to be ironed out in a complex agreement, but the success or failure of the negotiation will turn on no more than four issues. I have spent two and three days in negotiating sessions with teams of skilled businesspeople on both sides of the table, discussing fifty pages of small and large details, only to have everything boil down to four key issues at the end. Of the four main issues in any negotiation, one will be the main issue and three will be secondary issues.
78. The law of timing
Timing is everything in a negotiation. A negotiation can be made or unmade by the time at which it takes place. There is a “too soon” and a “too late” in every situation. Whenever possible, you must plan strategically and use the timing of the negotiation to your advantage. There is a better time to buy and a better time to sell in almost every case. And when your timing is right, you will always get a better deal than when it is not. The more urgent the need, the less effective the negotiator. The person who allows himself or herself to be rushed will get the worst of the bargain.
79. The law of terms
The terms of payment can be more important than the price in a negotiation. Many products, such as homes and cars, are sold more on the terms of payment and the interest rates than on the actual price or even the product itself. People usually buy the most expensive home they can qualify for. People buy the most expensive car they can afford in terms of monthly payments. Your ability to vary the terms can be the key to success in a negotiation. You can agree to almost any price if you can decide the terms. Never accept the first offer, no matter how good it sounds.
80. The law of anticipation
Eighty per cent or more of your success in any negotiation will be determined by how well you prepare in advance. Action without planning is the cause of every failure. Negotiating without preparation is the cause of just about every poor deal that you ever get. The very best negotiators are those who take the time to prepare the most thoroughly and to think through the situation completely before negotiation begins.
81. The law of authority
You can negotiate successfully only with a person who has the authority to approve the terms and conditions you agree upon. One of the most common of all negotiating ploys is called an “agent without authority.” This is a person who can negotiate with you but who is not authorized to make the final deal. No matter what is agreed upon, the agent without authority must check back with someone else before he or she can confirm the terms of the agreement. You must determine in advance if the other party has the authority to make the deal. When dealing with someone who cannot make the final decision, you must represent yourself as also being unable to make the final decision.
82. The law of reversal
Putting yourself in the situation of the other person enables you to prepare and negotiate more effectively. Before any negotiation that involves a good deal of money or a large number of details, use the “lawyer’s method” of reverse preparation. This is a great technique that dramatically sharpens your negotiating skills. In law school, student lawyers are often given a case to either prosecute or defend as an exercise. They are then taught to prepare the other lawyer’s case before they begin preparing their own. They sit down and examine all the information and evidence, and they imagine that they are on the other side. They prepare that side thoroughly with the full intention of winning. Only when they feel that they have identified all the issues that the opposing lawyer will bring up do they then begin to prepare their side of the case.
83. The law of greater power
The person with the greater power, real or imagined, will get the better deal in any negotiation. Your ability to recognize both your power and the power of the other person is critical to your success in negotiating. Often you have more power than you know. Often the other party has less power than he or she appears to have. You must be clear about both. Power is a matter of perception; it is in the eye of the beholder. People will not negotiate with you unless they feel you have the power to help them or hurt them in some way.
84. The law of desire
The person who most wants the negotiation to succeed has the least bargaining power. The more you want to make the purchase or sale, the less power you have. Skilled negotiators develop the art of appearing polite but uninterested, as if they have many other options, all of which are as attractive as the situation under discussion.
85. The law of reciprocity
People have a deep subconscious need to reciprocate for anything that is done to or for them. The Law of Reciprocity is one of the most powerful of all determinants of human behavior. This is because nobody likes to feel that he or she is obligated to someone else. When someone does something nice for us, we want to repay that person, to reciprocate. We want to be even. Because of this, we seek an opportunity to do something nice in return. This law is the basis of the law of contract, as well as the glue that holds most human relationships together.
86. The walk away law
You never know the final price and terms until you get up and walk away. You may negotiate back and forth, haggling over the various details of the deal for a long time, but you never really know the best deal you can get until you make it clear that you are prepared to walk out of the negotiation completely.
87. The law of finality
No negotiation is ever final. It often happens that once a negotiation is complete, one or both parties thinks of something or becomes aware of an issue that has not been satisfactorily resolved. Maybe circumstances change between the signing of the agreement and its implementation. In any case, one of the parties is not happy with the result of the negotiation. One party feels that he or she has “lost.” This is not acceptable if the two parties are anticipating negotiating and entering into further deals in the future.
That’s it on negotiating as Brian Tracy sees it. For more on this 8-part series based on the 100 Absolutely Unbreakable Laws of Business Success: