What are negotiation skills, and why are they important to everyone? Negotiations usually involve some give and take or compromise between the parties. However, negotiated agreements do not necessarily involve both parties meeting in the middle since one of the parties might have more leverage the other. Negotiations are a part of daily life whether we are aware of them occurring or not. In everything that we do there are preferred end results and the end results are likely to affect more than one person. The goal in this however, is to ensure that all parties are equally benefited from the actions and reactions that occur to create that result. While some dealings are done in a subtler manner without a great deal of negotiation per say there are other situations that would warrant more vocalized mutually acceptable compromises. The purpose of this paper will be to effectively explain a situation of which required negotiation on the part of both myself and a car dealer or salesman. I was able to negotiate buying a 2010 Toyota Camry.
Due to the vast amount of information available on the Internet, walking into a car dealership without having done some online research would be a big mistake. Online, you typically can find out the actual dealer cost, or invoice price, of a car. Some Web sites also allow you to pick the precise options you want and even tell you what other buyers in your region are paying for the same car. (Note that details such as dealer “holdbacks,” or money paid back to a dealer by the manufacturer, could prevent you from pinning down the dealer’s reservation price definitively.)
Negotiations styles are scholastically recognized as being broken down into two general categories and those are distributive bargaining styles and integrative negotiation styles. Distributive bargaining styles of negotiation are understood to be a competitive type of negotiation. “Distributive bargaining, also known as positional bargaining, negotiating zero-sum, competitive negotiation, or win-lose negotiation, is a type or style of negotiation in which the parties compete for the distribution of a fixed amount of value” (Lewicki, Saunders, and Barry, 2011). This type of negotiation skill or style approach might be best represented in professional areas such as the stock market where there is a fixed goal in mind or even in a garage sale negotiation where the owner would have a specific value of which he/she would not go below. In contrast, an integrative negotiation approach/style is that of cooperative bargaining, or win-win types of negotiations. For the purpose of this paper and discussing my most recent car buying experience, the integrative negotiation style is the one of which resonates the most. “Instead of approaching the problem in a competitive as distributive bargaining (claiming value only for one), the integrative negotiation the parties adopt an attitude aimed at solving the problem and seek a favorable outcome for both” (Business Blog Review, 2011).
Understanding that the main goal for the car salesman is to sell a car and the main goal for me as the buyer was to purchase a car, this is indicative of us having shared an identical favorable outcome. However, while the car salesman might have wanted a larger commission off the sale of a vehicle, it was my goal to purchase a vehicle for the least amount of money while also getting the most amount of money for my trade in. For this negotiation to be successful, and for both of us to get as close to our goals as possible, both of us had to apply listening skills and reason to the conversation. It is through integrative negotiations that the goal is to create as much value as possible for myself as well as the car salesman.
Given the financial magnitude of this negotiation, all parts of this negotiation and interaction with one another required a great deal of listening and efficiently speaking. The car salesman had to, and did, listen to what I was looking for as far as a vehicle to purchase and he was able to explain to me what was available within my criteria that was presented. This first phase of the negotiation phase is imperative because it sets the pace for how the rest of the negotiations will go. If the car salesman is unresponsive or not helpful in his duties, then this will successfully cause me to shut down as well and end the negotiation process. Other parts of this interaction that furnished effective listening and communication skills was during the bargaining phase once a vehicle had been chosen. It is during this phase that I listened to potential financing offers and trade in prices and decided to accept or deny such offers. Since both I and the salesman were sharing the same end goal, it was during this phase that we both applied different options that could work for both of us, going back and forth in a cordial manner, until a final option was adopted that best suited the both of us. This is how a successful negotiation is supposed to look when both/all parties are actively and effectively listening and participating in the conversation. All negotiations will fail if there is only one end goal in mind that is not shared amongst the group in conjunction will ineffective listening skills.
There were two areas that there was an indication of ineffective listening taking place; the first of which was during the test drive when I was voicing concerns regarding the integrity of the vehicle and the salesman was unsure what I was talking about and made up, what he thought to be a viable explanation. This is not effective listening or communication, rather, it is a sideways method of smoothing over a potentially damaging situation to the negotiation. “It is common, when listening to someone else speak, to be formulating a reply whilst the other person is still talking; unfortunately, this means that you are not listening to what is being said” (Robertson, 2014). The second area in which there was ineffective listening taking place during the negotiation was when the salesman and I were discussing trade in options and I was providing information about my vehicle. He was distracted and not writing down the information which later resulted in him having to come ask me the same questions again creating a certain level of frustration at this point in the negotiation process. It is important to pay as much attention in every phase of the negotiation process as you would during the phase that would specifically benefit you the most. Research suggests that there are several common barriers to listening which we have already identified as integral parts of a successful negotiation process. Of the list of common barriers to listening, the ones that were seemingly presented during the course of this negotiation process was both of us being unfocused; I was looking at potential vehicles while he was talking, and he was distracted by everything around him and big sales he would try to push off on me. There were issues of identifying rather than empathizing which is indicative of “understanding what you are hearing but not putting yourself in the shoes of the speaker” (Skills you need, 2011). During this negotiation, the salesman was not really listening at first to what I was looking for until I made it clear that I would accept nothing outside or below the realm of my requirements; it was at this point he began to focus more on what was being said. Finally, my negotiations were initially affected in a negative way by previous experiences with car salesman which resulted in my initiating the negotiations in a much harder and abrasive manner than was probably necessary. Again, resulting in my not actually listening until I was aware that a purchase was likely going to be made.
One alternative strategy that could have been utilized during this particular negotiation would have been to approach the negotiation process with more information rather than walking directly into a random dealership hoping for the best outcome. Improving my purchasing negotiation skills can be recognized by simply “preparing for negotiations effectively, learning the ins and outs of negotiation tactics, and developing and effective use of strategies and tactics” (MDI, 2013). A second approach of which could have been utilized to improve communication within this particular negotiation would to have been to maintain my ‘walk away power’. “It is better to walk away from a sale rather than make too large a concession or give a deep discount your product or service” (Robertson, 2014). It is with the ‘walk away power’ that people can more confidently and in a relaxed manner, explain what it is they are looking for, what they are willing to pay or sacrifice to obtain such a goal, and take the necessary steps to ensure that all parties involved in the negotiation are in understanding of one another. With this power breeds confidence and confidence create the ability to listen rather than prepare to answer.