Being a good negotiator isn’t a skill reserved only for corporate lawyers or United Nations diplomats. It is a critical part of building a profitable business, says Stanley Tepner, an advisor and first vice president with CIBC Wood Gundy in Toronto.
There is a fine line between negotiation and sales, Tepner says. And, he adds, sales is a part of life.
“To sell is human,” Tepner says. “Negotiation is a key part of this.”
Whether you are recommending an investment product to a client or discussing your fee arrangement, negotiation is an important part of your business.
The job of a good negotiator, says Warren Morris, principal at Warren Morris Mediation, is to look for ways in which both (or all) parties can win. He offers the following advice to help you hone your negotiation skills:
> Understand your client’s perspective
One of the key skills of good negotiation is the ability to understand why your client thinks a certain way.
A good negotiator, Morris says, is able to take the proverbial “mile-long walk in another person’s shoes.”
For example, if your client is concerned about the level of risk tolerance or diversification in his or her portfolio, ask yourself how you can best get to the heart of his or her underlying concerns.
Says Morris: “Always ask lots of questions.”
> Establish trust
In order to be an effective negotiator, Morris says, you first must develop a trusting relationship with those with whom you are negotiating.
For example, in many cultures, negotiating parties don’t begin to exchange hard numbers until the second or third meeting.
While this practice is not prevalent in Western business culture, you should make an effort to establish a rapport and become familiar with the other party. Being seen as trustworthy, Morris says, can be a big step toward reaching a favourable agreement.
> Be prepared
A good negotiator, like a courtroom lawyer, is always well prepared with plenty of factual information on which to build his or her case.
In the event that your argument goes slightly off the rails from what you had planned, it is important to have an alternative at your fingertips.
Whether you are negotiating fees with your client or for more marketing dollars from your firm, it pays to run through some scenarios before the actual negotiation begins and to have a “Plan B” in your back pocket.
“You don’t want to realize at the end of your negotiation,” Morris says, “that what you have agreed to is worse than your alternative.”
> Bend, but don’t break
Negotiating is a matter of reaching compromises, Morris says, not drawing battle lines. Avoiding “warfare,” he says, can help resolve problems more quickly, inexpensively and in a more satisfying way.