27 Tips to Becoming a Better Negotiator (And Always Get to A Win-Win Deal)
Everywhere I go I see negotiation. Life is negotiation. You negotiate on many aspects that you might not even consider. You negotiate your time for example. The same happens with all your other resources, like your money or at home, on who decides what to see on TV.
In today’s post, I will provide you with 27 awesome Tips that will help you to become a Better Negotiator. Understanding the subject of Business Negotiation will help you to:
- Reduce your Business Costs
- Increase your Sales and Overall Profits
- Get Competitive Advantage
- Get Always Better Terms (This applies to Your Life too!)
Along with that, I will share some tactics I have used to almost double my salary during my first 2 years as an employee.
Let’s dive in!
- Business Negotiation Basics
- Definition of Types and Tone in a Negotiation
- Strategic Negotiation
- Tactics for Successful Negotiation
- Understanding your BATNA (Better Alternative to a Negotiated Agreement)
- Crafting a Win-Win Negotiation
- The 27 Tips on How you can become a Better Negotiator
1. Business Negotiation Basics
Business negotiation is a process where two or more parties discuss and come to a consensus to achieve their respective objectives.
This might involve different aspects including a sales deal, establishing a partnership, or solving conflicts. The two parts are confronting each other (not always in a friendly way) to reach an agreement.
If you own a business, it is your duty to conduct an effective negotiation that ultimately strikes to preserve your venture as well as sustain your organizational growth.
2. Types and Tone in a Negotiation
Not every negotiation is easy. Some of them are tough and require plenty of energy to navigate them. If we wanted to classify them based on their “Tone” we can say that we have “Competitive” negotiations (with a more aggressive tone) or “Collaborative” negotiations (focused on building relationships and long-term plans).
If we wanted to classify them based on the outcome instead, we can have Distributive Negotiation (also referred to as Win-Lose) where each party is trying to get the most maximize their slice of the pie or we can have an Integrative Negotiation (Win-Win) where parties collaborate to find a solution that creates mutual value, often expanding the pie
3. Strategic Negotiation
Let’s now introduce the terminology of “Strategic Negotiation” with a practical example.
Let’s suppose your Supplier just called and told you he’s going to increase the cost of its supplies by 30% across the board.
Well, I guess now Strategic Negotiation starts to make sense. With it, you refer to something that goes beyond the immediate discussion.
It’s about planning, foresight, and looking at the bigger picture. In a business environment, planning and foresight make the difference. Now let’s see how you should answer this question in practical terms
4. Tactics for Successful Negotiation
A good negotiator knows which tactic can be used. If you want to become a better negotiator , you want to get familiar with some Essential Tactics as well as some Advanced Tactics.
4.1 Essential Tactics for Any Negotiation
Pre-negotiation research: Understand the other party’s needs, challenges, and objectives. Objectively evaluate your position. Knowledge is power, never sit at the negotiation table without having done your homework.
Active listening: It’s not just about your point; understanding the other side can unveil hidden opportunities for both as well as flaws in the proposal. A badly chosen word said by the other party can open a lot of subsequent discussions.
Asking open-ended questions: This can reveal deeper insights and help in crafting a more tailored negotiation strategy. Aim for questions that open the conversation. Give the other party the opportunity to speak more than what you speak and look for new POV that you might have missed
- Practice as many scenarios as you can possibly think of: This is one of my favorite tactics. Before joining the discussion, gather your thoughts, and start thinking about where the conversation can go. Prove yourself and your confidence in replying to uncomfortable questions as well as get hold of your ground in the decisive moment.
4.2 Advanced Tactics for Experienced Negotiators
Advanced tactics depend mainly on your position. Generally, before the conversation starts there is always one side that has more power than the other.
This doesn’t mean that you cannot achieve outstanding results by being in disadvantage, but it’s important for you to learn the way you should talk to the other party.
If you are in an advantageous position, you might go for the followings (and eventually combine them together):
- Anchoring: Start the negotiation with a deliberately high or low opening offer (depending on what you’re aiming for). This sets the tone and “anchors” the subsequent discussions, often leading to outcomes closer to your desired result.
- Bracketing: If you wish to achieve a particular outcome, ask for more than what you want (or offer less). This provides room for concessions and lets you settle for your initially desired outcome.
- Silence: After making an offer or hearing a counteroffer, remain silent. People often rush to fill the silence, sometimes making additional concessions without being prompted.
If you find being on the other side, where the other party is the one holding a better position you can try these ones:
Mirroring: Subtly mimic the other person’s body language and communication style. This psychological tactic can build rapport and trust.
The Nibble: After reaching an agreement, ask for a small additional concession, often something minor that won’t derail the main agreement but can provide added value.
Non-monetary Concessions: Instead of focusing solely on price, consider other factors that might be valuable, such as delivery times, extended warranties, or complimentary services. These can often be low-cost to the other party but high-value to you.
Reframing the Discussion: If negotiations become adversarial, change the dynamics by reframing the discussion. For instance, instead of “what can you offer?”, ask “how can we make this beneficial for both of us?”
4.3 Adapting to the Situation
Whilst you might or might not be in an advantageous position you always want to pivot your strategy based on the negotiation environment.
For instance, with a long-term client, collaboration might be more appropriate to keep the business up and running and eventually, increase its volume. Sometimes, you might also give up on quick wins to foster something with a long-term return.
On the other end, with a one-time transaction, a mix of competition and compromise could be the right card to play for a strategic win. Every deal is different and in the end. it’s about understanding the dynamics and adjusting accordingly.
5. Understanding your BATNA (Better Alternative to a Negotiated Agreement)
How can you tell whether or not the offer you receive is good or not for you? In the process of evaluating if the terms of a deal are advantageous or not for your business, you might want to keep in mind your BATNA.
BATNA means “better alternative to a negotiated agreement” and it’s easier to explain with an example rather than using words. Let’s suppose that you are listing a piece of equipment for £1000 and a potential buyer get in touch offering £800.
Now, before accepting, rejecting, or counter-offering, you might want to consider your BATNA.
You lift the phone, and you give a ring to the manufacturer which is happy to take the machine back for £850.
Even though the original £800 offer sounds appealing, that wouldn’t be the wisest choice due to the manufacturer’s interest. Having considered your BATNA, just gave you access to an extra £50. But it doesn’t stop here!
A good negotiator will eventually go back to the original bidder, counter-offering for more than £850 which, he or she, might be willing to pay.
The fact that you can achieve better results with this deal depends directly on the fact that you were aware of your BATNA beforehand.
6. Crafting a Win-Win Negotiation
No Matter what you are negotiating, A good way to become a better negotation is to always aim for a WIN-WIN Negotiation.
Even if some cases don’t look like it, I can assure you, they are. You can find WIN-WIN situations in divorces as well as in companies’ acquisitions or liquidations.
What WIN-WIN should trigger in your mind is finding mutual benefits and shared value even in unpleasant situations.
If your supplier doesn’t show flexibility on the price, ask for flexibility around your credit terms. If credit terms are not cannot be touched, ask him to improve on the delivery.
Long story short, there is always room for improvement and mutual benefit.
6.1 Steps to Achieve a WIN-WIN Outcome
Remember that both parties can walk out of the deal happy as long as you focus on:
- Consider your position. Are you the person in power before sitting at the table or the other party holds a better position? Set the tone of the conversation accordingly.
- Identifying mutual interests: Find the overlapping areas of desire and need. Do your homework and apply the tactics we have discussed before, depending on your position.
- Evaluate possible solutions: The idea is to come up with multiple potential solutions. 99% of the time you don’t have to make a deal during the first discussion. Both parties will need time to reflect on the proposal and eventually prepare a counteroffer. Just be open, clear, and confident about what you propose. Use the right words: the other party might accept what you say!
- Agree on procedures: Once you reached the deal, come up with a clear plan describing how you the deal will be conducted. Depending its “size” you might seek help from layers or other experts.
7. Here are the 27 Tips on How to Become a Better Negotiator
The journey on how to become a negotiator is paved with continuous learning, practice, and adaptation. Great negotiators have a unique blend of soft and hard skills, combining strategy with empathy.
Here are 27 tips to guide you in your transformation to become a better negotiator:
Research Extensively: Before entering a negotiation, understand the interests, strengths, and weaknesses of the other party.
Practice Active Listening: Good negotiators don’t just talk; they listen more to understand underlying interests.
Build Rapport: Establish a connection. It’s easier to negotiate when there’s mutual respect and understanding.
Stay Calm: Emotions can cloud judgment. Always maintain your composure.
Know Your BATNA (Best Alternative to a Negotiated Agreement): It provides you with leverage and clarity on when to walk away.
Be Prepared to Walk Away: Sometimes, the best deal is no deal.
Seek Win-Win Outcomes: Aim for solutions that benefit both sides to foster long-term relationships.
Use Open-ended Questions: This encourages the other party to share more information.
Practice, Practice, Practice: Role-playing negotiation scenarios helps in refining your skills.
Understand Cultural Differences: If you’re negotiating internationally, be aware of cultural nuances.
Stay Patient: Often, the best deals are made when you’re willing to take your time.
Communicate Clearly: Ambiguity can be a deal-breaker.
Adaptability: Great negotiators adjust their strategies based on the situation.
Manage Your Body Language: Non-verbal cues can say a lot. Ensure they align with your words.
Seek Feedback: After a negotiation, reflect and ask for feedback to identify areas of improvement.
Establish Credibility: Being reliable and trustworthy makes you a more appealing negotiator.
Set Clear Objectives: Know what you want to achieve before entering the negotiation.
Avoid Ultimatums: They can corner the other party and sour the negotiation.
Learn from Past Negotiations: Reflect on previous experiences and learn from your mistakes and successes.
Use Silence Strategically: Sometimes, saying nothing can put pressure on the other side to speak, revealing more than they intended.
Visualize The Success: Envisioning a positive outcome can boost your confidence.
Invest in Training: Attend workshops and courses to learn new negotiation techniques.
Read Widely: Books on negotiation can offer insights into strategies employed by tough negotiators.
Network: Engage with other good negotiators peers to exchange experiences and tactics.
Stay Updated: Economic, political, or industry changes can influence negotiations. Be aware of current events.
Know the Difference Between Positions and Interests: While positions are what someone says they want, interests are the underlying reasons why.
Always Maintain Integrity: The reputation of being honest and straightforward can make you a preferred negotiation partner.
Let’s speak the truth, becoming a better negotiator is hard and takes a lot of practice. Nevertheless, I am sure that you will try to work on yourself and apply some of the Tactics and Tips you have just read when discussing your next deal.
Remember that is important to do your research and have your BATNA clear in mind before you even think about sitting at the table.
Practice scenarios and simulating questions and answers will help as well.
Objectively evaluate if you are in an advantageous position or if it’s the other party who leads the conversation.
Ask open questions, negotiate strategically each point, and strive to obtain a WIN-WIN Deal.
Both of you should walk away from the table with a big smile, knowing that you have both achieve the maximum benefit. Realistically, this is not always guaranteed, but your duty is to try and obtain the best in every situation for both you and your long-term partners.