Negotiation is key to securing more customers, raising profits, and avoiding lost business, but it’s a tricky skill to master. Any type of negotiation boils down to finding common ground with another person or group, reaching a mutually beneficial agreement, and establishing trust in that relationship. Whether you are negotiating a salary raise, closing a sales deal, or buying a new car, understanding the principles of effective negotiation can help you achieve your goals and save money in the process. To do that, you’ll need practical advice that can help you further your goals.
Be Prepared for Negotiation
Before you start negotiating, it’s crucial to do your homework. By gathering as much information as you can about the upcoming deal, you’ll be able to walk into the negotiation with confidence. Perform market research, gauge the other party’s interests, and focus on how it affects the bottom line of both parties.
The more you know, the better equipped you’ll be to make smart decisions and come out on top. The biggest mistake a good negotiator can make is to come into a meeting where the other party knows more than they do. It sets a bad precedent and gives far too much power to the other party which ultimately costs the business.
Set Realistic Expectations
When you’re negotiating, it’s important to have a clear and attainable idea of what you want to get out of a deal. Make sure you’re not being too aggressive with your demands or asking for things that are unrealistic because this can hurt your relationship with the other party and sabotage the negotiation.
On the flip side, if you’re too passive or give in too easily, you might not end up with a good deal. The key is to find the sweet spot between being assertive and being flexible. This way, in any negotation you’ll be able to reach an agreement that works for both sides. Asking the question of why the other party wants what they say they want is vital simply because the underlying interest can be different from the stated interest.
Negotiation – Listen First, Talk After
It’s important to really listen to what the other party is saying during a business or personal negotiation. Pay attention to their words, the tone of their voice, and how they’re using their body language. By showing that you’re really listening and valuing their input, you’ll build trust and set yourself up for a successful negotiation.
In addition to that, you also gain clues about what they really want out of a deal. Words can only convey so much, and it’s the context around those words that reveal their true meaning. Listening gets a better understanding of their point of view and can spot any potential objections or concerns they might have.
Don’t Just Take, Give
Negotiation isn’t about getting what you want, it’s also about making sure the other party gets what they want. At the very least, they should be able to leave the table satisfied with the course of events. Never lead the conversation with stuff that you want to get from them. Talk about a problem they have, then offer a solution to it.
Of course, solutions should have fair compensation, and that’s where the reward for you comes in. It’s a give-and-take relationship at the end of the day, but when it gets one-sided, then things start to get problematic. Nothing ends a negotiation faster than one party realizing how much nothing they’ll get from a deal.
Don’t Settle For Less
At the end of the talks, never settle for something that you aren’t completely happy with. There’s always a compromise that can be reached somewhere. If the other party isn’t willing to offer that compromise, then you’re better off looking elsewhere. A good negotiator knows when to give up a lost cause.
The danger of settling for a bad deal is that it sets a power imbalance that will be very difficult to get out of. The other party, whether maliciously or unintentionally, will start viewing your business as a resource, not an equal. Whether it’s growing digital money investments or expanding a project, a reasonable compromise is a must for success.
Mind Before Heart
Negotiations can get intense, especially if there’s a lot on the line or the issue is close to your heart. But it’s important to keep your cool and stay professional, even if things get heated. The old adage of “It’s nothing personal, it’s just business” doesn’t just apply to old mafia movies.
When you’re able to keep your emotions in check, you can stay focused on what you want to achieve and avoid making any rash decisions that could hurt the negotiation. So, take a deep breath, stay calm, and keep pushing forward.
Types of Negotiation
Negotiations and negotiators can come in multiple different flavor in order to reach a goal. Consider, for example, integrative negotiation versus distributive negotiation—arguably one of the better-known negotiation behaviours. Integrative negotiation refers to a negotiation behaviour whereby both parties seek to maximise joint gain. This process stands in contrast to distributive negotiation, where the process aims to reach an agreement to distribute resources such that the value achieved by one negotiator comes at the expense of the other. Distributive can be seen as the split the pie example: win-lose, whereas integrative strategy aims to enlarge the pie together before splitting it. Which results in a net increase for both parties, often referred to as win-win.
Keep in mind, becoming a skilled negotiator is a journey that never truly stops. Thankfully, refining your abilities and being flexible to new circumstances makes that journey a whole lot easier. Always be confident in your negotiations and you’ll see positive results almost every time. Take sales training lessons from sales experts whenever you have the opportunity, as they can provide a bounty of information that no amount of books or resources can help you master.