Everyone has wishes. When you buy something, what do you wish? The price is low; we wish our salaries be doubled every year, we wish North Korea give up its nuclear plans. But on the other side, it is also absolutely true that sellers wish to raise their price, our boss wish to control the cost, and North Korea leaders believe that they must its nuclear weapons. The wishes are contradictory to each other. How to solve it? There are 2 ways. Yes, either by force or by negotiation. I believe everyone agrees that negotiation is the better way.
How to ensure a negotiation successful? Maybe there are different answers nearly all negotiation experts agree on one simple factor: preparation. If you are not well prepared, it is better for you to keep away from negotiation table and do your homework first. Tonight I want to share with you the three most important items of your homework: knowing yourself, knowing your counterpart, and setting up a plan.
First, you need to know yourself. That seems quite simple, but many people get off-track from here. Let me share with you a story on this.
A friend of mine-David- visited Shanghai recently. Just as many travelers did, David went to the famous local tourist market.
One man approached David and said,
“Hello do you want to buy a luxury watch?” “No”, he shook his head.
“It is a Rolex, 500 dollars only.” she said.
“What?” David was shocked, as he knew in regular stores; the price would be more than 5000 dollars. David was interested, but not sure about the quality, and did not want to take risks. “How about 100 dollars?” he replied, just wanting to disappoint the seller.
“100. No, no, that is too low. But give me 120, my dear friend, and the watch is yours.”
“No, no, too expensive.” My friend knew he was lying to himself.
“Ok, ok, my dear friend, this is my first deal today. Take the watch at 100 dollars.”
“You mean 100 dollar for this Rolex watch? She answered “Yes, it is yours now”
David bought it. Of course, it is a fake one.
When he told me the story, I asked him, “Do you really need a Rolex? “He said, “No”. Then I asked, “Do you need a watch?” “No, not at all” he said. “Then why did you buy it?”
Many people including some of you may buy something just because it is on sale, or because there is a big discount though you actually do not need it.
The second item in your preparation list is about your counterpart, not just his name, title, sex, not just about his personality, but all the background and details of his offer.
How to know that? Do your research. Last summer, my friend Fiona asks for suggestions as she wanted to buy a new house. I asked her,” Do you know why original owner want to sell? Have you visited at least 30 open houses? Do you know the market trend? Do you know the schools?
She said, no. I said, “You’d better do it.”
Then she did her research, visited 5 schools, talked with 16 Real Estate brokers, and visited 56 open houses. By the time she was ready to make an offer on a house, she knew how much to offer to get a fair deal. We visited her last week; everyone thinks she got a really good deal.
The last thing in your preparation list is a negotiation plan. Your plan could include many things, but do not forget one important item-your final limit. The limit reminds you what time you should stop negotiating. When I visit tourist market, I normally just take a limit amount of cash so I never buy those useless things out of my budget.
So, let me sum up. Before starting a negotiation, there are three things to be prepared. You need to know yourself, know your counterparts and set up your plan. With these 3 areas dealt with ahead of time, you will feel safe and confident to start a negotiation. You will be able to get a yes for your deal, whatever you are negotiating for, and whoever you are negotiating with, your supplier, your boss, MR. Kim Jong Un.