Knowing how to negotiate is not just for show but a key ingredient for the success of your business. Skilled negotiators can maximize revenues, reduce risk and grow better business relationships. All of which contribute to a healthier bottom line.
According to the negotiation experts at negotiations.com, the following tips can help you become a powerful force at the bargaining table.
1. Prepare well
If you want to walk away with the best possible deal, it pays to be well-prepared. Preparation gives you time to gather and analyze relevant information. The more information you have, the better your position.
Also, taking time to prepare helps you to get crystal clear on what you want and why. When you have clarity about your goals, you can speak and hold your ground with more confidence and conviction.
Preparation also gives you a chance to examine the other side’s needs and interests. Knowing what the other side hopes to walk away with can help you position your offer in a more attractive manner.
Here are a few things to keep in mind as you prepare:
- Determine the outcome that you would like to achieve.
- Think about what the other side wants from the deal.
- Identify possible objections that may arise and possible solutions that may solve them.
- Figure out what concessions you may need to make.
2. Communicate effectively
Negotiating involves a fair amount of talking and information exchange. So, you want to make sure that your words and intentions are aligned when communicating. What you say and how you say it has a remarkable impact on how well your arguments are perceived at the other end of the table.
To communicate effectively:
- Use simple language that is also easy to understand.
- Avoid using hesitant and negative language. For example, “umm,” or “I guess so.” Some more examples of negative language to avoid are “you’re wrong about this,” or “you should not say such a thing.”
- Pay attention to how you deliver your message. Are you a little too loud and boisterous or are you maintaining a lukewarm tone?
- When you speak, be clear about what you can offer and what you want in return.
- Make sure your verbal and non-verbal expressions are in sync.
3. Know your BATNA
BATNA stands for “Best Alternative To a Negotiated Agreement.” The phrase was coined by Roger Fisher and William Ury, co-founders of the Harvard Program on Negotiation. Simply put, BATNA is the option you are willing to take if your desired outcome cannot be reached. In other words, your walk-away option.
Negotiations can get heated quickly and it can be easy to lose sight of your goals. When you do, you’re likely to make hasty decisions. So, it is best to establish your BATNA before you start the negotiation process. In most cases, knowing your BATNA ahead of time protects you from getting caught up in emotions and pressure, and accepting a poor offer.
In her book, The Mind and Heart of the Negotiator, Kellogg School of Management professor, Leigh Thompson, says you want to have more than one BATNA. The more alternatives you have, the more foresight and the greater your flexibility will be.
4. Use skillful questioning techniques
Knowing how to ask questions is extremely important during the negotiating process. No matter how well you do your research, you may not uncover everything you need to know, however hard you look. The most effective method to fill in the blanks is what some may call the simplest: asking questions.
However, not all questions are equal, and it helps to be picky when choosing the right ones. The type of questions you ask determines the quality of answers you get. Here are a few suggestions to improve your questioning technique:
- Ask open-ended questions. Usually, these begin with a wh-word: who, what, where, when, how, or why. These types of questions flow effectively in a negotiation as they encourage conversation. The more people talk, the better the chance to gain qualitative information.
- Prepare questions in advance so that questions are well-formed and well-presented.
- Listen actively to the answers to help build rapport with prospects and become one of their trusted advisers.
5. Project confidence
Confident people are often perceived as credible and trustworthy. If the person you’re negotiating feels you lack credibility, they may be less likely to agree to your terms. Also, when you’re confident in your abilities, you can push back against poor terms and stand your ground when necessary.
Projecting confidence also makes you more likable. People want to do business with people they like, and no one likes a scaredy-cat. So, if you can come across as confident, even if you’re sweating bullets on the inside, you’re more likely to make a good impression. Confidence also makes it easier to handle difficult situations and stay calm under pressure. If you appear calm and collected, you are more likely to be able to find common ground with the others and reach an agreement that is satisfactory for both sides.
A few ways to project confidence are to:
- prepare thoroughly so you can converse and engage effectively during the discussion
- know your bottom line and hold it
- learn and stick to the facts
- practice your key points out loud so you sound natural and confident
- watch your body language e.g. sit or stand up straight and maintain respectful eye contact
6. Aim for a win-win outcome
A win-win outcome is when everyone involved in the negotiation comes away feeling like they’ve got what they wanted. This doesn’t mean that each person gets exactly what they envisioned, it just means that each person feels like they got a great deal of value out of the deal.
This approach is good for your business for several reasons. First, it encourages current discussions to be more cooperative and collaborative. Secondly, it leaves the door open for potential future opportunities.
To create a deal that will benefit all involved:
- focus on common interests
- generate multiple options for mutual gain
- focus on interests and not positions
- avoid making ultimatums
7. Build relationships
Building relationships is important in negotiations because it can help build trust. When both sides feel like they can trust each other, they are more likely to come to an agreement that is beneficial for both sides.
Good relationships also make it easier to engage in difficult topics and find common ground. Lastly, having a good relationship with the other side can make the negotiation process more clear, enjoyable, and productive overall.
To build authentic relationships that pay off at the bargaining table:
- Build rapport before the meeting.
- Mirror your audience’s speed of speech and tone. Mirroring is a body language technique that can build rapport.
- Show a genuine desire to understand the other person.
- Communicate clearly and concisely.
- Be respectful of others’ opinions even when you don’t agree.
8. Be patient
Patience is an important trait to develop if you want to make great deals. Being impatient can ignite feelings of stress and showing impatience can affect the other side too. Negotiators are more likely to concede, cut corners, or overlook red flags to relieve their stress. Also, when you try to reach an agreement too quickly you can place undue pressure on the other side. This can destroy any trust you have established.
However, when you are patient you can properly review and understand the offer on the table. When you run into an issue, patience gives you time to think carefully about possible solutions. Also, negotiations tend to run smoother when those involved get on well together.
When it comes to building great relationships, patience is the key. So, keep the following in mind:
- Allow enough time to complete the negotiations.
- Don’t allow the other negotiator to hurry you. If you need more time, ask for it.
- Know your triggers so you can effectively spot and avoid them.
- Have a plan to deal with triggers you are unable to foresee or prevent.
9. Practice often
Practice is the best way to develop and strengthen your deal-making skills. This can be done through, for instance, role-playing negotiation scenarios with coworkers, friends, or family. When practice is done right, it helps cement knowledge and boosts recall, say top negotiations experts. Also, the more you practice, the better equipped you are to handle unexpected and unpredictable events.
Regular practice also increases your ability to apply what you’ve learned to new and more complex problems. The quality of your practice will go a long way to improving the outcome of your next negotiation. So, practice deliberately and have a specific goal for each training session.
Also, consider working with a negotiation coach or mentor so you can get feedback and support. They can point out your blind spots, strengths, and weaknesses, which can help you notice them too and improve faster. Finally, put what you practice to the test in real-life negotiations. It will help you grasp the concepts more quickly.
Negotiations can be hard to navigate. However, by learning and strengthening the above nine skills, you can close deals like a pro and maximize revenues.