Do you wish that there was one easy technique that you can use to immediately and positively impact the next deal you negotiate? Well, I have good news for you - there is a simple but highly effective technique that you can use with ease the very next time you negotiate anything - from an upgrade at a hotel to a complex multi-million dollar deal.
The technique is to always (yes always) overstate your expectations at the negotiation table.
Henry Kissinger, the famous American Secretary of State said that "Effectiveness at the conference table depends upon overstating one's demands".
There are several reasons why it is important for you to start with high aspirations when you engage in negotiations:
1. Research has confirmed that high aspirations will consistently outperform low aspirations. If you want to hit the moon, you should aim for the stars. You'll be surprised by the effectiveness of something so simple. I've seen time and time again how clients that have gone through our training end up being astounded when they realize that they can get so much more from their negotiations by simply giving their counterpart the opportunity to say no rather than negotiating with themselves!
2. Having high aspirations will allow you to 'anchor' the negotiation around your own aspirations. It's far better 'anchoring' negotiations around your aspirational level rather than your minimum acceptable level. Having high aspirations convey confidence and serves to underline the quality of your suggestions.
3. Perhaps most importantly, having high aspirations will allow you the room to be flexible in your negotiations. Research tells us that most people equate their success at the negotiation table with their ability to gain concessions from their counterpart. The reality is that your counterpart will have no incentive to be flexible or to make concessions to you if you are not willing and able to make concessions to them.
Therefore, if you do not allow yourself some 'room to move' then you risk coming across to your counterpart as someone who is inflexible and unwilling to make concessions.
Warning!
Please note that I am NOT suggesting that you open your negotiations with extreme and unrealistic demands. Your opening offer should reflect a level that is realistic and that you are able to justify using a solid, factual argument. It can be high risk using extreme demands and offers as your counterpart may well decide not to negotiate with you at all and the use of the extreme demand tactic is highly culturally dependent.
I once worked with a large multi-national organization who used an approach of 'the price we ask for is the only price we sell at'. As they are a well established and old company in the USA, most of their clients have come to know them as the type of organization that has a conservative approach to business and have learned to live with this approach.
However, when using this approach in Poland, the company realized that they were being perceived as being inflexible by their counterparts because they would never budge on their prices. In Polish business culture this approach was not acceptable and they found it exceedingly difficult to conclude agreements in the Polish market place. The simple remedy was for them to ask for a little more than their standard prices so that they could allow clients the opportunity to negotiate with them and to gain some concessions from them. This approach proved to be very successful for them.
Of course, keep in mind that 9 out of 10 times your counterpart's first offer will be an aspirational goal, not their minimum expected outcome. This means that you shouldn't accept the first offer that is made to you either - you should always negotiate!