One can sense an air of uncertainty in the world financial markets wherever you go - for the first time - regardless of where you find yourself in the world.

Warren Buffet stated that it is only when the tide goes out that one can see who is wearing no swimsuit. In other words, it is easy to be successful when the markets are doing well; it is only when tough financial times arrive that we can clearly distinguish quality & commitment.

How can you use your negotiation skills, negotiation training or purchasing training to sidestep losses in the current economic climate?

Use 'Loss Framing'

We are more interested by avoiding loss than by attaining the very same gain. Kahneman & Tversky's Prospect Theory work describes how individuals will become risk seeking in an attempt to avoid a loss whilst they are more likely to be risk averse when pursuing gains. In the way that we negotiate, we can make the other side aware of the items that they stand to lose if they don't move in our direction and otherwise gain if they do.

Create Alternatives

In times of uncertainty it is very important to look at other options so as to strengthen our negotiation position. The ability to create options is vital in the context of negotiation and the strength of options to securing a deal is the key driver of our negotiation power.

Usually we wait until we know that we are not going to be able to do a transaction before we start thinking about other options. We risk entering into unfavourable deal and if we have not investigated all the alternatives. Similarly, thinking about the alternatives available to the other side in the negotiation will give you a clear understanding of their relative position of strength in the negotiation. If they have strong alternatives available then they will be more competitive and if they don't, they will tend to be more accommodating.

Use Reciprocation

Reciprocation is a key principle of powerful persuasion skills, because we are prone to return to others the form of behaviour that they demonstrate towards us. In times of economic uncertainty it is important that we perform in the interests of the other side if we would like them to act in our best interests. Use this principle to your advantage by acting first and invoking the rule of reciprocation. Be careful and ensure that you record the obligation with the other side.

Move from price to value

It is important to take the focus off price and concentrate on the Total Cost of Ownership. For any service, product or solution that we buy or sell, there is always an exchange between value & price. If we only engage on the price, the best that we will do is to haggle and it is only once we start to explore the entire lifecycle of the service, product or solution that we buy or sell, that we begin to discover opportunities for negotiation. Before you mention price in negotiation, examine your counterparty's long term strategic fit, capabilities, switching costs should they wish to change a business partner, financial steadiness and possible risks or negative consequences that may happen when your counterparty doesn't reach an agreement with you.

Don't forget that the magic in negotiation is found in the quality of your planning. In times of economic uncertainty it is key to commit enough time to preparing for your negotiations.