The Importance of the 'No Deal' - How to Negotiate
What is 'No Deal'?
This blog post explains how complex and significant negotiations are handled, and gives you some essential tips on how to negotiate.
The news recently about Greece’s financial situation has been like watching a 4 Act Greek Tragedy. both sides keep on talking and negotiating. The World waits to see if a deal can be done, but time and again, the Greeks or their creditors announce ‘no deal.’
‘No deal’ is not a failure. From a sales perspective it is simply a stage of negotiation. It gives both sides the time to go away, consider, then come back to the table.
We are often put under pressure to make a sale – and that reinforces the wrong behaviour, because by using ‘no deal’ where both sides are given the chance to agree to continue the conversation, we leave open the chance for a better deal. And what might change? Timing changes many things, circumstances will alter and what looks like a ‘no deal’ one day may become very attractive a day later.
This also highlights a major ‘missing’ which is a salesperson’s ability to negotiate effectively. Anyone can offer a discount – just offer money off until someone says yes – but it takes a professional to consider their stages of negotiation and to positively engage. To be clear, a negotiation should take place when the buyer indicates that they will definitely buy if they can achieve a better deal. Then it’s down to the seller to gently re-state value and consider giving money off, which of course, affects the bottom line.
If you follow these simple tips, you can make 'No Deal' work for you, and it will ease the pressure on both sides.
Tip 1: Work out your parameters in advance
Most of us never work out our negotiation parameters in advance and prefer to trust our luck and hope for the best. This almost always delivers a deal that is disadvantageous to one side whereas what we all should be striving for is a Win-Win.
Tip 2: Consider the other side's position
Put yourself in their shoes - what would your stance be? What would your parameters be? And it's also very important to then work out your red lines - where you will not go under any circumstances - and also what will the other side's red lines be?
Tip 3: When will you opt for 'No deal'?
If you can decide in advance, (anticipating a long negotiation) where your 'No deal' position may be you can use that to your advantage. 'If we can get to this stage by 5 o'clock then that's a good time to call a break.' So you can walk away and refresh for the next meeting satisfied that you've achieved something of value.
Tip 4: After 'No deal' you need something extra.
What will you have up your sleeve that you can bring to the table at the beginning of the next negotiation to speed up a settlement?
Tip 5: Be prepared to walk away.
It may be that a deal cannot be reached. This is unfortunate, expensive and frustrating. But it may be the best 'deal' at that time. To walk away after you've tried to reach an accommodation gives both sides a shock because both sides probably won't want that either, and surprisingly, compromises often follow, just when you thought all was lost, and your strength in walking away may have a more desirable effect afterwards - because integrity is essential.