Whether you’re negotiating your salary at a new job, asking for a pay raise or overseeing a business deal, negotiation is a skill every professional will need – but it’s no easy feat. It can take a long time to reach an agreement no matter what you’re negotiating; and ultimately, you might not even get the outcome you desire. That’s why it’s important to ensure you bargain the right way. Even the smallest mistakes can cost you a successful deal.
Here’s more on why negotiating skills are essential, along with some concrete tips on successfully closing the deal.
The Importance of Negotiating Skills
You may be tasked with negotiating real estate transactions, conflict resolutions, sales and purchases of merchandise, and salary discussions. And it’s not all about money; negotiating is also a valuable skill in your personal life. Negotiation skills are life skills, and if you don’t develop these abilities, you’ll see a direct impact on both your business and personal life. Here are some negotiation blunders to avoid:
1. Don’t make assumptions.
The key to a successful negotiation is being prepared, which means a lot more than knowing numbers and facts. This means you need to know the decision-maker and the other party’s needs, values, hopes and fears. The more prepared you are, the better you’ll be able to navigate the negotiation.
2. Don’t rush.
Negotiations take time, especially if you want them to go smoothly. Take the time to establish a real relationship with the other party. Don’t be afraid to build in pauses, as they can help everyone regain perspective and remove undue emotions.
3. Don’t take anything personally.
It can be easy to let your emotions get the better of you during a negotiation, especially if it affects you personally. But getting too emotional will hurt your productivity. Our advice for making it through unscathed? Challenge yourself to turn moments where you feel attacked and defensive into moments of curiosity where you can gain feedback. Emotion can easily be used against you in a negotiation.
Being aware of your emotional triggers is vital, as is knowing how to pull back when you feel things shifting in the wrong direction.
4. Don’t accept a bad deal.
Negotiation can be a long, tiring and stressful process. It can be easy to settle, but agreeing to a deal just to get a deal isn’t good, no matter what side you’re on. It’s important to remember that a deal isn’t necessarily better than no deal. It can be discouraging when you’ve invested time and energy into getting a deal done, but it’s important to have that clarity.
Understand, going into the negotiation, precisely what you’re willing to give up – and what you aren’t. Ask yourself, ‘What does success look like? At what point am I comfortable walking away?’ Ultimately, walking away from a deal should always be an option.
5. Don’t over-negotiate.
If you’re lucky enough to have the upper hand during the negotiation, don’t take advantage of it too much. Consider the consequences of over-negotiating: You might get what you want, but at what price?
Along with negotiating don’ts, here are some proactive tips for negotiating:
6. Be the first to make an offer.
Part of being a good negotiator is taking control of the deal. Making the first offer creates a standard for the contract, especially if you’re the seller.
7. Provide set terms instead of price ranges.
Providing a price range only gives the buyer the upper hand. Buyers will focus on the low end of the price range and get the agreement locked at that rate.
8. Use words wisely while negotiating.
You don’t have to talk about the entire negotiation. Say what you need to say and combine that with direct contact. This direct approach establishes confidence, making the other party more likely to accept your proposed terms.
9. Ask open-ended questions and be a good listener.
Yes-or-no questions aren’t as effective and don’t produce details and context. Ask questions that help the other party understand how they benefit from the negotiation, and make sure they understand the overall agreement. Listen to their concerns and objections, and counter them with answers that prevent doubt.
10. Offer a win-win scenario.
Any negotiation ending with only one side benefiting from the agreement will lead to a faulty business relationship. One-sided negotiations decrease trust and rapport. Both you and the other party should feel assured that you’re getting a fair deal.
Negotiation Nuances to Understand
There’s no such thing as a foolproof negotiation method; however, some tactics are more productive than others. Here are some examples of negotiation nuances you should understand:
11. Close the deal while adding value.
When you’re closing the deal, try to add value to the contract rather than selling yourself short. For instance, if you’re selling cable packages, you may be happy just to get someone to agree to subscribe to the service.
Consequently, a seasoned negotiator will go the extra mile by offering premium channels and upgraded equipment. Moreover, these add-ons will be better received if you throw in a discount that makes the customer feel like they’re getting more for their money.
12. Never denigrate the product or service.
If you include too many negatives in your negotiations, you’ll scare customers away. For example, if you’re selling cable packages and a customer comments that the price is higher than expected, the worst thing you can do is agree with them.
If a customer gives you their undivided attention, they likely want you to convince them to buy your service and products. However, by agreeing that the package costs too much, you’re simply affirming that the service isn’t worth the money.
Instead, counter this argument by acknowledging their concerns and providing more context. Staying respectful of both the customer’s concerns and your product or service will present you in a much better light – ultimately boosting the customer’s confidence.
Everyone Wins with Effective Negotiation
The ultimate goal of business negotiation is to end with two (or more) satisfied parties and to have paved the way for future negotiations when necessary. If you’ve ever successfully completed a negotiation, it’s tempting to think that it’s all over once you and the other party have reached an agreement. However, it isn’t really over until it’s over. Proper and effective closure is key to successfully sealing the deal.
As with any business leadership skill, negotiation is learned by practicing. Knowing the fundamentals before going into any negotiation is essential for successfully securing your objectives while preserving strategic relationships with employees, clients, vendors or investors. If you struggle with negotiating, start practicing with small negotiations in work or life. It gets easier once you start.
