If you look for it, I've got a sneaky feeling l̶o̶v̶e̶ negotiation actually is all around.
Stop for a minute and reflect on this. Think about your last week and ask yourself, how many times there was an opportunity to negotiate?
Did you think about the insurance company you've been with for years without a claim, yet they keep increasing the renewal? What about a household chore you hate doing and wouldn't mind swapping with your partner?
What about at work? Did you have a call with a supplier that didn't leave you feeling 100% satisfied? Maybe you have a staff member who wants a pay rise, or perhaps it's time you asked for one.
Once you take a minute to consider it, you'll realise you have plenty of opportunities during your day to negotiate and secure a better partnership with yourself and the other party.
This was my rationale for taking FuzzyHQ's Negotiation for Leaders and Operators hosted by Lucy Wark. The same Lucy Wark who co-founded Normal, the sexual wellness platform that inspires many of the live scenarios you negotiate on during the course.
The short course was a wonderful opportunity to learn about the theory behind negotiation and arm me with some tools and techniques I can use myself or be conscious of someone else using against me.
The course also allows you to test out your new toolset and network with fellows from the startup world in mock live scenarios. Perhaps the best way to ice-break and network with fellow entrepreneurs is to negotiate with them on an order of 10,000 vibrators.
While a little daunting at first, I mean, that's a lot of vibrators; it's a risk-free way to push the boat out with new tactics before you're in the real world.
To give a teaser on the course, I’m allowed to share my biggest personal takeaway from the course.
By failing to prepare, you are preparing to fail.
My eye-opener happened in the first week. I often felt unsure about a negotiation because I failed to adequately understand the deal and my counterparty. This can be solved through preparation and research about the topic you're working on and the counterpart you're negotiating with.
The preparation centred around research into comparisons. What examples exist in the market already? When negotiating with your spouse about who's doing the dishes, this may be overkill, but negotiating over founder equity is a different story.
In this research phase, you will also naturally discover the bands of possibility for yourself and the party you're negotiating with. You may discover that orders over 10,000 usually net a 10-20% bulk discount. But you also discover that payment terms are significant for manufacturers.
It seems obvious that preparation pays off, but it might not be obvious that you'll also discover opportunities for both parties to benefit.
This is called 'expanding the pie' and involves introducing new elements into the negotiation process that can benefit both parties. For example, you might get a more significant discount if you bring another product line to that manufacturer.
Get into the Zone, the Zone of Possible Agreement
In practice, this preparation phase is the development of the Zone of Possible Agreement (ZOPA). Building out and understanding the concept of ZOPA is central to negotiation theory.
ZOPA is the range between two parties where a mutually beneficial agreement can be established. It's the overlap between the minimum that a seller is willing to accept and the maximum that a buyer is willing to pay.
It's the range within which an agreement is satisfactory to both parties. If no overlap exists, then there is no ZOPA and, hence, no deal that would benefit both sides.
For example, I'm negotiating with a staff member on their potential salary. I know my range is between $90,000 and $110,000, whereas the staff member may have an expected range of $100,000 to $130,000. We currently have a ZOPA between $100K and $110K.
In the expanding the pie analogy above, we're actually expanding a delicious ZOPA pie. A good negotiator can expand the ZOPA through creative problem-solving, adding more value to the deal (for example, through additional terms that benefit both sides), and understanding the underlying interests of both parties.
Finding the ZOPA is excellent, and expanding it is even better. Then your mission is to capture as much of the ZOPA on your side as possible.
To learn more about the tools, tricks, and strategies you can use, I suggest registering for the next negotiation course hosted by Fuzzy HQ. You can find out more here.
I even managed to negotiate 15% off with the discount code WILL.
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