A successful negotiation doesn’t just happen; strategy is essential. Use these negotiation tips to tweak your playbook and achieve the best possible outcome.
How to Negotiate a Favorable Business Deal
1. Be Prepared
All too often, negotiators fail to consider the other party’s perspective. To fully prepare, you need to understand the context. That includes the wants and needs of the other side, the pressures of the market and industry, and the contract negotiation tactics of the people in the room.
2. Practice Active Listening
People like to feel heard. Active listening is a crucial business skill during a negotiation. To demonstrate to the other person that you’re paying attention, try summarizing what they’ve said.This shows that you’re engaged and invested in the discussion, in addition to ensuring that all parties understand each other and are on the same page.
3. Ask for More
It makes some negotiators uncomfortable to come in with a long list of demands. Nobody wants to be seen as aggressive, greedy, or unreasonable. But if you know what you want, you’ll have room to swap concessions for victories. This give-and-take demonstrates you’re willing to arrive at a deal that’s good for everyone.
Here’s one important caveat: keep your list private and prioritize each item. Keeping notes will help you determine at a glance what you’re willing to trade and when to hold firm.
4. Pay Attention to Tone
Striking the right tone during negotiations is difficult, regardless of your position or stature. Being too hard-nosed can shut down the conversation—but being too flexible can result in concessions you don’t want to make. Be polite but firm during negotiations so other parties know where you stand. Being nice doesn’t always mean you’ll broker the best deals.
5. Consider Every Angle
Explore the issues at hand from different angles. Every party wants something—but it may be for very different reasons. If you can understand the other side’s motivations, you can prepare to speak to those wants and needs—and propose viable alternatives if needed. Collaborating on these issues helps build trust and could reveal a creative solution neither party would consider in isolation.
Check out Ivy Exec’s book recommendations on business negotiations.
6. Concede for the Right Reasons
Negotiation demands some level of sacrifice. But before letting something go, pause and reflect. Why was this point important enough to include on your initial proposal? Is this concession balanced by an offer with equal value? Be clear about what’s being exchanged and how those items are evaluated.
7. Look Beyond the Dollar Value
Typically a contract negotiation covers a variety of different matters. But all too often, people believe money is at the root of everything. That isn’t always the case. Sometimes you can offer something with no dollar value attached that is a significant benefit to the other party.
This goes back to seeing the issues from many different angles. What do they need from you? Can it be fulfilled with a non-monetary action or activity? Think of things like extra days off in lieu of pay increases for employees, or marketing services in lieu of cash for equity during a buyout.
8. Factor in Timing
Negotiations don’t happen in a vacuum. You could be successful and have the luxury of time—or you could be pressured to conclude a deal as quickly as possible. Timing is critical. If you’re planning to ask for a raise, for example, schedule the meeting after a high-profile win. Getting a bigger paycheck is more likely when the company is doing well and you’re taking on more responsibility.
If negotiations happen on a preset schedule—for example, if you’re renewing a supplier contract—the timing determines how hard you can push to get certain terms. What is the other party willing to give up in the present environment?
9. Negotiate Your Own Way
At the end of the day, you’re in the room making the case during a negotiation. It’s always best to be authentic and use your instincts.
Practice your negotiation skills with a career coach!