6.3 Opening negotiations


The 4 Key Elements
There are four key elements to body language communication when opening negotiations – posture, facial expression, tone of voice and limb position. Of these, the tone of voice is most easily disguised and you should be wary of making judgments based on this element alone. While the other side is speaking, reassure them by using positive body language – make a lot of eye contact, smile, and nod in agreement with their major points and generally act as though you are persuaded by their arguments. This tends to draw the other side out by making them feel that you are easier to negotiate with. When they have come to the end of their prepared remarks, keep quiet and maintain an attentive pose. They may then begin to improvise – providing even more information to the intelligent listener. Body language should be seen as a two edged sword, and when you are opening you should be aware that the other side may use it to encourage you to say more than you intended.

1. Mirroring
In any intimate communication there is a natural tendency to mirror the body position of the person you are talking to, and this behaviour tends to result in a more relaxed and agreeable atmosphere. You can put the other side at ease by being aware of this and making a positive but subtle effort to mirror their body language when opening negotiations – but don’t overdo it. If you are negotiating as part of a team then it is important to keep everyone on your side aware of the subtle messages they may be sending out. An individual’s facial expression, tone of voice, body posture and movement often convey a world of detail about what they are thinking, feeling and planning. The effective use and interpretation of body language communication will help you to identify subtle aspects of the other side’s opening position. It is a key component of intelligent listening.

2. Intelligent Listening
Intelligent listening when opening negotiations, can be described as getting behind what people say to understand what they really mean. For example if the other side says: “We absolutely cannot move on price” it may be that other aspects of the deal are negotiable.
Similarly, “We don’t usually give more than 5% discount” could mean that they might well give more discounts if you give them something in return.
Under our standard terms” could be taken to mean that other terms are almost certainly negotiable.
That isn’t our usual practice” could mean that they could be convinced to make an exception.
I can’t see how you’re going to achieve this” invites you to explain in more detail how it could be achieved.

3. Non-negotiable Items
Experienced negotiators know that the other side’s non-negotiable items can serve as powerful bargaining levers – even if these items are of little consequence. For example:
First Negotiator – “You haven’t mentioned payment terms?
Second Negotiator – “Our payment terms are always 30 day’s; our accounting system won’t allow extended payment periods.
First Negotiator – “That makes things quite difficult, we were expecting a 60 or 90 day payment period, and if that’s the case we’ll need to revisit the proposed price and discount structure.
Here the first negotiator is inflating the significance off the other side’s rigid accounting system. She may well discard this as a ‘generous’ concession during the bargaining phase. This example illustrates how non-negotiable items can have the effect of forcing the other side to be more flexible about issues that are negotiable.

4. When You Have to Open First
Opening negotiations first is generally viewed as a sign of weakness – as you are obliged to show your hand and reveal your priorities and possibly your strategy. However, it isn’t all negative; there can be some benefits to be gained from opening first: You can alter the other side’s perception of the situation. A confident opening can demonstrate confidence in your position. It can also imply trust in the other side to which they may respond favourably. Remember, if you are opening first, avoid revealing too much and try to disguise the importance that you attach to different issues. If you are opening first, it is important to allow time for normal introductions, courtesies and small talk. You should then begin by outlining the scope of the negotiations and ensuring both sides are agreed on the main objectives.

During this initial stage, pay attention to anything that the other side says, observe their body language – do they appear confident? Are the worried or distracted? Are they relaxed or impatient? Indicators such as these can help you to build up a useful picture of the other side’s position and strategy. You should try to maintain a neutral tone and remain relaxed throughout this preliminary stage. If, for example, the other side can see that you are adopting a tough stance then they can very quickly toughen up and a stand-off may develop before the process has gained momentum. This introductory stage of the opening phase can be ended by tabling your proposed agenda for the negotiations. An agenda is a key aid to effective negotiations, and its content is described in The Preparation Phase of this course.

Is Their Opening Credible?
When the other side has finished detailing their opening you should assess it in the light of your own research, your opening position and your bottom line. The fundamental question is whether or not you consider their opening position to be credible. If it is not credible then you must reject it immediately, as it is important that the other side alter their opening position – or at least understand that you are not opening in response to it. If you do not make this clear then you are tacitly accepting their opening as a valid start point. Given that a credible opening has been made you may want to ask specific questions about their proposal. Your questions should be directed at areas of weakness and should also aim to identify what areas they consider to be non-negotiable. Avoid accepting the other sides agenda if it doesn’t suit you, by countering with your own – if you have prepared one. Standing up for yourself is something that should be done from the outset – or the other side may start to see you as a pushover.

Splitting the Difference
Splitting the difference is a common negotiating tactic that may initially seem fair to an inexperienced negotiator. This approach involves halving the difference between the last two offers to find a middle ground that is agreeable to both sides. The fairness of splitting the difference rests on two hidden assumptions. Firstly, that both sides have made equally fair initial offers and that they have made equally fair progress towards their theoretical best possible offer. The second assumption is that both sides have continued this process as far as they can. In reality one or both of these hidden assumptions may not be true. If you accept an extreme opening position you are leaving yourself open to the other side adopting the split the difference approach. For example if the other side suggests splitting the difference as a means of concluding the deal, it can be very difficult to refuse without appearing to be unfair and unreasonable. This is why it is so important not to accept, even tacitly, an opening position that is not credible.