For US President Donald Trump, the world seems easy to explain: good deals, bad deals. Whether in the trade dispute with the European Union or the Iran nuclear deal – Trump apparently only cares what he gets in the end. In business life, however, the cost-benefit calculation is not that easy to open. In negotiations, both sides often fall into traps without being aware of it.
Negotiation expert Katie Shonk from the Program on Negotiation at Harvard Law School has identified four classic mistakes in sales negotiations. The lessons can be applied to any kind of negotiation. Because basically it’s always about convincing the other side of your own position. You should avoid these mistakes in negotiations:
# 1 Overestimate your own offer
Shonk refers here to the thesis of the so-called endowment effect (possession effect). It describes the phenomenon that people automatically attach greater value to their property. A simple coffee mug suddenly seems to be more valuable after purchase than it was in the shop. This psychological trap can lead to an unrealistically high price being set for one’s own products or services. The expert advises: Consult an independent expert with your claims. Also, play through a future scenario in which you did not achieve the goal. This can help keep the demands rational.
# 2 Too much focus on the monetary
In the sales pitch, the goal is usually clear to both sides: to get the best possible price. However, all those involved could quickly become victims of tunnel vision, warns expert Shonk. In addition to the price itself, important factors such as delivery times or financing plans are ignored. Transferred to a salary negotiation, this can mean: The number on the pay slip is not everything. Instead of bitterly arguing about an amount, “soft” factors can contribute to an amicable solution. More vacation, shorter working days, time for further training, a more attractive job profile – stay mentally flexible.
# 3 Reveal moral principles
Regardless of whether a used car or one’s own work is being offered for sale: Shonk warns against throwing ethical convictions overboard in negotiations. According to studies, even those people who affirm a strong moral code are not immune to this risk. In the negotiation battle, promises are suddenly made that can never be kept.
# 4 unattractive offers
Sticking instead of carrot rarely leads to success. This is another mistake that professionals make quite often in negotiations. According to Shonk, sellers often fail to present their offer in the best possible light. For example, anyone who simply presents a fixed price virtually challenges the prospect to focus exclusively on how much less they actually wanted to pay. It is more promising to explain and advertise your own offer. What are the specific advantages for the other side, how much do you actually meet the partner? Have you just landed a lucrative contract with your boss, to what extent does your offer increase customer productivity? Sell your cause in the truest sense of the word instead of limiting yourself to a few meaningful numbers.