Best Business Expert

If you’re in business, there’s a good chance that you will need to negotiate at some point. You might negotiate every day with clients during the sales process, or with vendors in trying to reach a price on raw material. Or, you might negotiate with these parties only occasionally. It might be as infrequent as a negotiation on a delinquent bill.

Whether you’re negotiating daily or occasionally, the key to success in negotiation is knowledge. Before you enter any negotiation, make sure you’ve mastered these areas:

1. Knowledge of the industry. By knowing about the industry you’re working in, you’ll be confident with prices that your competitors are charging. No prospect will be able to blindside you with "I’m going to go to your competitor if you don’t cut your price" if you know that you are the best price. Or, if your competitor does offer a lower price, but you offer better value, you can counter their objection.

2. Knowledge of trends. When you know the trends that are taking place, you’ll have the big picture view. Economic trends are a good example: If you know that the economy is about to improve, and your vendor’s prices will probably go up because more people are buying, you should buy and lock in now, negotiating hard for the lowest price. But there are other trends, too: Consumer attitudes; technological advancements; even political trends can impact your business down the road and thus should impact your negotiating today. Read up on trends by trend experts (Google "futurists" or "trend predictions" to get started).

3. Knowledge of customers. Knowing your customer really, really well will help you in both your customer-side negotiations and your vendor-side negotiations. What are your customers using your product or service for? What will they likely use it for in the future? How are consumer attitudes shifting? What opportunities does this present for you? Create a profile of your customer and modify it as you gain additional information.

4. Knowledge of the other side. This is one of the best ways to get your preferred result from a negotiation. The parties that you’re negotiating with have their own agendas, motivations, and ideal outcomes. When you know these, you can work the negotiation in your own favor. There is an excellent blog post about this on the blog The Customer Collective. In the blog post "Hidden Needs Drives Sales Negotiations", Dr. Jim Anderson outlines some of the important facts you MUST know about the person sitting across the negotiating table from you in order to improve the negotiation outcome for yourself. (Read the blog here).

It’s likely that the most successful negotiations you have will not come from great negotiating skill but rather from the knowledge you’ve collected. When you sit down to negotiate, the more power you have the more effective your negotiation will be.

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