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7 Rules of Negotiation?

Take a look at the seven rules of negotiation and why it’s important for your organisation 

What are the 7 rules of negotiation?

Negotiation is a core skill for procurement professionals and cited as one of the top skills in demand in 2024 (CIPS Procurement Salary Guide 2024). For organisations to grow negotiation skills need to be possessed by management and key employees to help deal with customers, suppliers, and other potential stakeholders. However, it’s not always easy to get negotiation right. Here are seven rules of negotiation that will help master your tactics.

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Clear realistic objectives:

Know what success looks like. What are the minimum outcomes you must achieve? Think about if you cannot achieve them, what is your walk away point?

Develop your game plan: 

Understand your position and who is in the weaker position. Most negotiations require trade-offs and compromise so it is important to know what the deal-breakers are and where you may be willing to trade.

Research your opposition: 

Take time to study and understand your counterpart. What is their style? Can they be trusted? What are their objectives and identify any common goals? Communication and active listening skills will play a part here.

Win-win:

Aiming for a win-win is ideal where you have an ongoing relationship, as if that party felt that they were treated unfairly in the negotiation they this may cause issues and damage the relationship further down the line. You should still focus on your objectives but consider the relationship more important than win-lose.

Active listening:

Listen to the other party and pay attention to their interests. It’s important to understand and listen to what matters to them.

Build trust:

Building trust is key to a negotiation. Knowing both parties are ethical and will follow through and are trustworthy is key in the negotiation process and continuing a relationship.

Focus on value:

For both parties to come to an agreement there must be value.

 

Why is negotiation important?

Negotiations can help organisations to save money and drive value within the organisation. Procurement must deal with a lot of third parties, including suppliers, so negotiating the right price for the raw materials at the highest quality, will lead to overall costs savings within the organisation. Here are a few reasons why negotiation is important:

  • Helps you to achieve success:
    Whether you’re dealing with stakeholders or trying to procure raw materials, negotiation skills are key. Both you and the third party will be fully aware of negotiating the best terms or deal, so it’s important to identify negotiating skills and the soft skills to support negotiations to help you stay one step ahead of your opposition.
  • Improves relationships:
    Negotiating helps to improve relationships with all areas of your organisation. Being a good negotiator will also mean you’ll gain credibility and a good reputation both within your organisation and with third parties too.
  • Gets you the best value:
    Negotiating low rates to obtain the best value and ensuring the top suppliers are sourced is essential to deliver maximum value for your organisation.

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