Matt Lohmeyer might be a professional negotiator but he is also a man of few words.
As Negotiation Partners principal, his trick is using words that are effective.
“In business, and in life, you don’t get what you deserve, you get what you negotiate,” he says.
“The secret of negotiating is that you need to engage with the other side and trade.
“Work out what it is that you want. That is step one. Be specific about what it is that you want, and then ask for it. Those are the two main steps.
“Another key step is find out what the other side wants, and then trade. Give them what they want, in return for what you want.”
In saying that, Lohmeyer says there isn’t any one right way to negotiate because negotiating is like having a toolbox.
“A tradesman with one tool isn’t particularly useful,” he says.
“I teach lots of different skills from how to impose your will, when it’s appropriate, how to problem solve and persuasion… All of those used together will make you a better negotiator.”
While it may seem straightforward, Lohmeyer says most of the senior executives that attend his masterclasses don’t have a clear understanding of what negotiating means.
“About 80% don’t nail the definition, and that’s a problem because if you don’t know what it means to negotiate then you can’t control it.
“Most people think it’s about talking with the other side, communicating, getting to a win-win deal. All those definitions describe the outcome that you want at the end of a deal; they don’t actually tell you what you do to get there – and that’s half the secret.”
With this in mind, Lohmeyer shared with Business Insider these seven worst mistakes you can make when negotiating, which you can also read more about on the Negotiating Partners website.
1. Asking for substantially more than you need.
Fact: A shock opening only works if you are dealing with people who don’t know what they are doing or who don’t know the marketplace.
Don’t believe those who tell you that your first offer should always have ‘shock’ value – in most settings, that’s foolish. Trying to see if you can get lucky is best left for the roulette table. At the negotiating table, opening with an extreme position is deadly. At best, you look like a fool who doesn’t understand the market; at worst, the other side will just laugh and leave, depriving you of the opportunity to negotiate at all.
Even if they humour you, you then have to make large unilateral concessions to moderate your ‘shock’ demand back to more reasonable levels, which weakens your negotiating position and credibility.
Be optimistic, but remain realistic when making demands and proposals.
2. Trying to take the last dollar off the table.
Fact: There is always a better deal out there. Pushing on beyond what is already a good deal exposes you to danger and the law of diminishing returns.
As a negotiator, you need to know what a good deal looks like and when to shake on a good deal. The secret is careful preparation. We observe this in negotiations a lot: greed takes over and the temptation to push for just one more concession. Sometimes you get away with it, sometimes it’s that last demand that collapses the entire deal and causes resentment you’ll be reminded of for years. Don’t chase the last dollar, chase the next profitable deal instead.
Prepare carefully, know exactly what you want and don’t risk a perfectly good deal in pursuit of a perfect one.
3. Accepting the first offer.
Fact: People expect you to counter their first offer.
Imagine someone has advertised a car for $15,000. You offer them $8,000 and they say: “sold”. How would you feel? You’d probably think: “Damn, I should have started with $6,000.” Your second thought might be: “There’s something wrong with this car.” Similarly, the other side will realise that you would probably have been happy to pay more. Taking the first offer is an easy way to ensure that both sides will regret the deal.
Always work to improve on a first offer. Both parties will be happier!
4. Getting emotionally attached to a deal.
Fact: Emotions have a habit of undermining skill and clouding rational judgment.
Especially in the final stages of a negotiation, there are two deadly emotional traps we often set for ourselves. After you have negotiated for a long time, have invested yourself, your creativity and much effort into the deal, you may come to think of the deal as “your deal” or “your baby”. From that point, it becomes really hard to kill, even if your baby has turned feral.
Ringing the bell prematurely or pre-selling the deal to management can also entrap you. Walking away or even a delay in delivery can now create a huge face issue for you. If you are emotionally invested, wily counterparties will use emotional pressure to keep you in the deal and to extract last-minute concessions that may make you regret the deal in the cool light of day.
Stay objective and remain as emotionally uncommitted to the deal as you can. Regularly ask colleagues who are not involved in the deal for their feedback.
5. Not knowing when you’re better off walking away.
Fact: Some of the best deals you will ever do are those you walk away from.
Almost everyone will nod sagely when you say this, but in practice it can require great courage to walk. There may be a corporate expectation to ‘do a deal’, others may view you as ‘weak’ or even mandate you ‘push-on’. Your only defence is solid preparation.
You must be crystal clear about your best alternative to a negotiated agreement (BATNA). If what you want is not available or if the current deal is worse than your BATNA, you should walk.
Know your BATNA, ensure it is sound and actionable and keep measuring the deal against your alternatives as you go.
6. Bluffing, lying and making threats you won’t carry out.
Fact: Your credibility is one of the most valuable assets you have as a negotiator.
That credibility is hard won and easily lost. One of the fastest ways to lose your credibility is to make threats, which you then don’t have the authority or the courage to follow-through. The other side will be wondering what else you don’t have authority to say and won’t believe you next time you use a sanction.
Another way to demolish your credibility is by lying, misleading or by making promises you can’t or won’t honour. Don’t blow your credibility. The other side needs to know that your sanctions and deadlines are hard and real.
Play it straight and be firm on the issues. Only signal a potential sanction if you are prepared and authorised to impose it.
7. Not telling the other side clearly what you want.
Fact: The best way to ensure that you don’t get what you want is to keep the other side guessing about what you want.
The sooner both sides clearly tell each other what they need, the sooner both sides can start working on a deal that will work. It’s so simple, yet there is a strong tendency in business to keep much of the available information hidden.
Skilled negotiators know what to disclose and what to hold back. This is a vital balance, because information is at the core of good deals. In our experience, poor and insufficient information disclosure is the most common cause of deal failure.
Ensure the other side knows clearly what you are after, whilst being careful not to disclose information that will disadvantage your position.
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