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Listening - The Art of Business Negotiations

Jun 27, 2008
Negotiation is something we do in our daily lives, and is not just a business skill. It is needed in many aspects of day to day living. We negotiate at home, in school, in the office & with our friends. You are negotiating when asking your kids to be home by 10, and they try to negotiate with you for a longer time.

Negotiation is when you and your friends agree on watching a movie that suits everybody - or near enough. The person it doesn't suit could agree on condition they get the best seat or choose where to go afterwards - that, too, is negotiation.

Negotiation is when your client asks for the end product next week and you ask for a couple more days because his request is unreasonable: well, the request is OK, but the expectation is unreasonable.

Listening for Clues

One of the qualities of a good negotiator is to be able to listen: and not only to listen, but let the other person know that they are listening. Any course of communication will stress the importance of response; even a simple nod of the head is better than no response at all when somebody is trying to communicate with you.

Not Arguing

It is important to understand that negotiation is not argument. Instead it is to understand the viewpoint of the other party, before you strike a favorable bargain. If you fail to see things their way, then you will have difficulty in negotiating an outcome acceptable to both of you. Negotiation is not the same as arbitration, where the arbitrator takes a neutral viewpoint.

A good negotiator will first listen to the other party, and hear their viewpoint. If you are looking for certain price for a job, for example, don't make your demands immediately, but wait until the customer gives an indication of what they expect to pay. A customer might begin by stressing that they are on a tight budget and so on, and then offer more than you were going to ask. People have different conceptions of value, and what is lot of money to you might not be much to another.

Bide Your Time

By jumping in too quickly, you could lose out, so good negotiators always take their time, and wait to find out what transpires before making their move.

Most business people do not make their final offer immediately. Only the most naive would offer their lowest price, or highest bid, without leaving room open to negotiate for better terms. Let's say that you have been asked for a price for a specific aspect of your business: web design for instance. A customer wants a price for designing some good graphics for a website. You won't offer your lowest price right away will you? If you are prepared to go as low as 1000, say, you won't start there. You might start at 1250 or perhaps even 1500, but not at your bottom price.

In the same way, you shouldn't expect your customer to accept your first offer. Your customer would expect you to make the first offer, leaving them room to negotiate for something lower. This is the principle behind all forms of negotiation. Find out what the other party wants, listen to their position ("where they are coming from"), and then come to an agreement, preferably in which you get closer to your needs than the other party.


So when you are involved in negotiation, make sure that you try to understand the position of the other side, since that will give you many clues as to how far they are willing to bend. Without some degree of bending on the part of each party there is no negotiation, but it is easier for you to suggest a solution that might be mutually acceptable if you are sympathetic towards the position of the other side.

Whatever the form of the negotiation, the importance of listening cannot be overemphasized since it is essential to understand everybody's position before you have a base from which to negotiate realistically.
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