“We take a buck, we shoot it full of steroids and we call it leverage.” -Gordon Gecko (Wall Street 2)
Leverage - a word that has such meaning it could be used to define itself. When it comes to negotiating, leverage is king. Whether you’re trying to negotiate a multimillion dollar contract or figuring out how to get an extra quart of strawberries included with your purchase at the local farmer’s market, people are always searching for it, and without it you have nothing. Having no ground to stand on when attempting to ask for a compromise from another party is not an ideal position.
Negotiating has long been considered an art, and while the more leverage you have the better your position, not all leverage comes in the form of give and take. There are times where you have little-to-no leverage on paper and you enter a conversation knowing you’re at a disadvantage.
Consultants pride themselves on being able to close a deal and gain something in any negotiation. Good consultants lean on their emotional intelligence (EI) and relationships in their negotiation strategy to make up for any leverage gaps they may have. These consultants are always thinking ahead and know whatever gains they can get from the level of relationship they have with the client/vendor will position both parties for long term success. Sometimes it’s those relationships that end up being the leverage. And while the consultant knows it – the client may not. Understanding how to utilize emotional intelligence to gain an advantage in negotiations is a proven way to ensure you get something positive out of your negotiations. Here are a few other approaches to help turn a situation with no apparent leverage into a winning strategy:
Time is on your side. If engaging in contract negotiations for a good or service that will be provided for a duration of more than one year, it is critical to understand just how long you are willing to commit to a supplier. Adding additional years to a contract is a great way of leveraging time and value against a price discount. It guarantees volume and revenue to your supplier and (depending on the terms and conditions) may even provide exclusivity. In a time where markets and industries are in constant flux, providing stability carries significant weight.
Transparency is key. While you never want to show your full hand during negotiations, being transparent in your intentions should be a priority. Whenever someone feels like you are trying to pull one over on them, you’ve already put yourself at a disadvantage. Professional courtesy goes a long way – even more so if you have the upper hand. It’s no secret that you’re there to work out a compromise in your best interests, but making it clear what your end goal is – without getting too specific – is a sign of good faith for open and engaging dialogue.
Read the room. When faced with a challenging face-to-face negotiation it is important to remember that being able to read body language is a skillset the best negotiators possess. A 2012 leadership blog on Forbes.com by Carol Kinsey Goman cited how “many negotiators miss valuable opportunities to read their counterparts’ nonverbal messages -- simply because they don’t pay attention.” Having the ability to pick out the subtle clues, tells, and tendencies of people you are negotiating with can help dictate how your conversation will proceed, and whether or not you need to shift your approach.
Not all leverage can be broken out in dollars and cents. More often than not you won’t have the upper hand and you’ll have to rely on maximizing leverage from other sources. By using some of the methods listed above while keeping a cool, calm demeanor you’ll be sure to get the most out of your negotiation while positioning yourself for long term success.