I used to be very uncomfortable in situations that require negotiation — which is almost any business interaction, especially fee and salary discussions. I was fortunate to have the chance at Sloan to take a course called “Negotiation and Conflict Management” from the wonderous Mary Rowe. The best part of the course was the exercises, in which we role-played to practice how we would react under various situations. Most importantly, we discussed each of these role-plays afterwards and discovered how the other party interpreted our statements and actions, what they’d have been willing to settle for, etc. Invaluable.
If you’re uncomfortable in negotiating situations and don’t have a chance to take a course, you can get the critical basics from this concise article: “Basic Negotiating for Fun and Profit,” by Steve Pavlina. Here’s an excellent excerpt:
Never negotiate against yourself.
If you make an offer, and the other party refuses, always wait for a counteroffer. Never say, “$5000? No? Ok, how about $4000?” It’s impossible to win when you bid against yourself, but I see this happen all the time. One publisher recently offered me a $5000 advance for a publishing deal. I told them that $5000 seemed a bit low. So they came back and offered $10,000. What if $7500 had been acceptable to me? I knew immediately that I was dealing with a very bad negotiator. They should have asked me for a counter-offer. I might have said $10,000, and we might have settled at $8000. Instead, the publisher has already pushed it up to $10,000 on their own, so if they’re done negotiating against themselves at that point, I can counter-offer with $15,000 or even $20,000, and we end up settling on a nice five-figure advance. I have to say I really love it when people do this. Whenever you are turned down, always wait to get a counteroffer first. A corollary to this rule is that you should always attempt to get the other party to name a figure first whenever numbers are concerned.
This is the mistake I most often made in the past. I’ve become worlds better at waiting during negotiations: waiting for the other party to make his intentions and circumstances known, waiting for him to make the first offer, waiting for a counteroffer. I’m much the richer for it.
One important point the article doesn’t emphasize it that you have to keep an open mind and open ears and eyes. Watch how the other party receives your offer. Listen to their diversions and preambles. Interpret what it is they really want but maybe can’t articulate or are afraid to express. These are keys to discovering the win-win scenario.
And of course: Never underprice yourself.
And even more important: Remember that “no” is just a request for more information.