Negotiation serves as the backbone for all successful business interactions. Master negotiators employ a flexible, constantly evolving set of tactics orchestrated around factual relevance, implemented through leverage, and supported with creative problem-solving. They fully engage with their negotiating partners throughout the entire process with the goal of reaching a mutually beneficial solution. Recognizing that negotiations are never truly finished, even after a deal has been signed, master negotiators spend time carefully honing their negotiation skills over the course of their entire careers.
While negotiation skills are crucial in business interactions, few people ever receive training on the art of how to negotiate. At Shapiro Negotiations Institute, our extensive knowledge and record of proven results have given us unique insight into the main components of a successful negotiation. If you would like to progress from a mere novice to a masterful negotiator, structure your negotiations around the following key principles.
1. Do Your Homework
Every master negotiator knows that the deal-making process actually begins long before both partners come together at the negotiating table. Effective persuasion is impossible without truly understanding the other party, so preparation forms the foundation of any successful negotiation. Your first step should always be to thoroughly research your negotiation partner by reviewing their company website, press releases, and articles written about previous deals. This ensures you enter the negotiating process with the real decision-maker instead of someone without the authority to agree to your terms.
Proper preparation provides incredibly valuable information that will allow you to consider the other party’s perspective, identify their interests and needs, gauge their strengths and weaknesses, and determine the factors that will influence the likelihood of reaching an acceptable compromise. By doing your homework beforehand, you can enter into the negotiation strategically from an informed, confident position and with the ability to strategically anticipate your partner’s responses.
2. Evaluate the Greater Context
The information you gathered will provide crucial knowledge of the negotiation’s greater context, such as the other party’s goals, desired outcome, competing interests, and any time-based or financial constraints limiting the deal. It also allows you to determine who needs the deal more, and therefore which side has the greatest leverage. Keeping the greater context in mind during negotiation means you can differentiate between thoughtful decisions that result in the best outcome for both parties and hasty decisions that achieve only short-term gratification.
3. Set Clear Objectives
The final principle to follow before the negotiation occurs is to clearly define specific, realistic objectives for your desired outcome. You must establish a bargaining range by setting optimum, minimum, and target goals. The optimum goal serves as the starting point in the negotiation and comprises the best deal for you, the minimum goal is the point at which you would be willing to walk away if they do not agree to your request, and the target goal is the position you would like to be in when the deal concludes.
You should share these objectives with your business team to ensure you are all on the same page before you begin communicating with the other party. Know which goals are the most important and which ones you would be willing to compromise on, as this prepares you to leverage lower-priority goals to reach the best outcome. Also consider your BANTA, or best alternative to a negotiated agreement, which refers to the option you will choose if you cannot reach an agreeable deal. Deciding this now prevents you from accepting a subpar offer and places you in a more powerful negotiating position.
4. Treat Your Partner With Empathy
When you reach the negotiating table, one of the key principles to follow throughout the discussion is to treat the other party with empathy. Be aware of your assumptions and cognitive biases so they do not hinder productive negotiation. Asking open-ended questions leads to much more useful answers than those that can be answered with a simple yes or no. It proves that you value their opinion and want to take their goals and priorities into account during the process, not only your own. It also allows you to uncover attitudes or other hidden factors that could potentially block a resolution, then adapt your strategy to use this information to your mutual advantage.
Rather than simply waiting for your turn to speak, practice active listening by directing your full attention to your negotiating partner, making eye contact, and avoiding distractions. Paraphrase their statements using your own words and repeat them back, giving them the opportunity to provide further clarification or remedy misinterpretations. They may elaborate on a point in a manner that can help you better understand their needs and give you the chance to explain why you can most effectively meet them. Sometimes the other party may inadvertently reveal important information that can ultimately strengthen your leverage.
Recognizing nonverbal cues like body language along with active listening also offers the chance to display empathy. Monitor your own body language to be aware of the messages you are transmitting and ensure you are demonstrating attentiveness, openness, and professionalism. When the other party discloses information, examine their gestures to form a more complete picture of the meaning behind their words. For example, sitting at the edge of their seat indicates interest, leaning back can signal confidence, and pressed lips typically suggest uncertainty or anger.
5. Evaluate Yourself
Whether you consider yourself a winner or a loser at the end of a deal, always use every negotiation as a learning opportunity to aid in constant improvement. Evaluate your strategy so you can appropriately modify it, substantially strengthen it, and utilize it more effectively in the future. After each negotiation, ask yourself the following questions:
- Did the outcome truly meet the needs of both parties?
- What additional preparation would have given me a stronger advantage?
- Could I have been a more attentive listener during the process?
- Did I devote enough time to understanding the other party’s perspective?
- How thoroughly did we explore alternative options?
In any negotiation, achieving the best outcome requires the ability to smoothly transition from listening to speaking, and from demonstrating empathy to influencing by persuasion. Nearly 20% of the population is genetically predisposed to being empathetic. Failing to successfully juggle these priorities can result in increased tension, your partner losing interest, and a lower chance of reaching a mutually beneficial agreement. The development of strong negotiation skills is fundamental not only in closing a particular deal but also in encouraging and sustaining productive, long-term business relationships.