Phase One — Exchanging Information

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The first phase in a negotiation involves an exchange of information. Both sides state their positions on the issues being addressed in a non-confrontational way. The tricky part of this phase is deciding what to reveal and what to hold back. The “poker” metaphor for negotiating is a very good one, because it describes exactly the way that negotiating parties will want to “allow” each other to think. The information you share with your negotiating counterpart will allow them to read a certain amount about your position. You cannot negotiate blindly, after all. However, too much information given away can really come back to bite you.

Getting Off on the Right Foot

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Before you actually get down to work, it’s a good idea to engage in a little small talk with the other participants in the negotiation. This will help set a positive tone. You might find that you have some things in common (such as hobbies or favorite teams) with the other participants. 

If you rush right into the negotiation without some initial pleasantries, the other party may feel that you are being pushy and aggressive. For some people, this is a desirable negotiating style. However, it is advisable to have as many strings as possible to your bow when it comes to negotiations. Being “human” and easy to relate to is far less likely to persuade the other party that you are someone who needs to be kept in check, and may work to your advantage. 

Obviously when it comes to introductions and preliminaries it is an idea not to get too informal. Apart from anything else, this will feel quite artificial when all parties are fully aware that there are issues to be debated here. Formality also lends itself to details being correct – how many negotiations, you have to wonder, have foundered at an early stage because one participant forgot the name of a counterpart or made an accidentally offensive remark due to ignorance of a critical detail?

Projecting an image of relaxed friendliness with an element of restraint is your best way to introduce yourself. By no means should you give the impression that you are here to bleed your counterpart dry – this will put them on the defensive and entrench their position, to your disadvantage – but it does help to project self-confidence. If you seem in a hurry to get negotiations completed and an agreement sealed, the impression will be that you want to escape from the whole process with a minimum of losses – which will not make you a formidable negotiating counterpart.

What to Share 

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At the start of a negotiation, you don’t want to give a detailed statement about your position on specific issues. That is a subject for bargaining. If the other party tries to rush you into stating your bargaining position prematurely, say something like, “That’s an important question. Before we get to that, let’s make sure we agree on the issues we’re discussing today.”

It may be helpful to think why the other party would be in a hurry to get you to state your position. If they are fixated on that so early in negotiations, the chances are that they have been worrying about it for some time beforehand, and will want to get negotiations over and done with without having to worry about giving away more than they will need to. In such a case, it does you no harm at all to leave them waiting for this information by concentrating on laying down the framework.

In negotiations, one party’s opinion on what should constitute the agenda will differ from the other at least in terms of how the issues should be framed. The same issue can be framed in several different ways, and a simple form of words can be quite contentious. Agreeing on the topics for discussion is something that allows both parties to find common ground, while preparing the way for both parties to recognize that they will not complete negotiations without making some movement on some issues.

What to Keep to Yourself

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Holding back information can be a tricky business. You don’t want to appear secretive or deceptive, but at the same time you don’t want to give away your bargaining position prematurely. The best way to deal with this situation is to attempt to set the agenda for the negotiation.  Say something like, “Let’s get a few general issues settled before we get into specifics.” At the start of negotiations both parties will, to some extent, be on the defensive and will want to get an impression of whom they are dealing with before they go any further.

By dealing with matters of agenda first, both parties get an opportunity to “size up” their counterpart and think about what they want to get from the negotiation and what they can get. The major benefit of these early discussions is that the first tentative negotiations can be made without making or breaking the whole process. From here it is possible to have a more realistic idea about who you are dealing with.  This can influence how you carry on with the negotiations.

If you walk into negotiations and after preliminary introductions simply say “OK, so this is what we have come for, and we will walk away if we don’t get it”, then you might as well not be having a negotiation in the first place. Equally, if you hint early in negotiations that you are prepared to settle for a deal which more or less favors your counterpart, you are simply setting the scene for them to take everything you are prepared to offer and more besides. Your success in negotiations depends on knowing what to say, when to say it and when to be silent. 

Case Study

Bob, the owner of a small town coffee shop, was meeting with Terry, a representative from an international coffee shop chain. Terry’s company wanted to purchase Bob’s coffee shop and open a store front in the town, without having to pay the cost of a new building and equipment. Unknown to Bob, Terry’s company valued Bob’s assets at $164,000. Bob, however, would take a minimum offer of $120,000. When Terry made an offer that was well below Bob’s WAP, Bob refused and countered with $145,000. Both parties could agree to those terms. Because neither party knew what the other was willing to pay, both parties got a better deal than they expected.