One of the most important business skills is the art of negotiation—and there’s a very good reason they call it an art.
A successful negotiator is a lot like a boxer. He’s tough and prepares extensively for the fight, but sheer muscle alone won’t guarantee a win. He must read his opponent and anticipate their next move, dodging and weaving and counterpunching in response to his adversary’s actions.
Just like boxing or any other skill, the more you practice negotiation, the better you’ll get. No matter your level of experience, though, there are a few universal principles that’ll make it more likely you’ll get your way even if you’ve never navigated a major negotiation before.
Here are the key steps to follow to give you a better chance of securing a favorable outcome, every time.
Do It Face-to-Face
Meeting an intimidating opponent at the negotiating table is daunting, especially if you’ve got a lot at stake. It can be tempting to resort to negotiating over the phone, or worse, via email.
Don’t take the easy way out; do it in person.
Research shows when you negotiate face-to-face, you have the benefit of reading non-verbal cues, which can provide important insights to the other person’s position and willingness (or non-willingness) to compromise.
Meeting in person is also the easiest and quickest way to build rapport with another party, which increases the likelihood of a positive outcome on both sides.
According to the data, there are benefits to negotiating electronically (i.e. via email), for example the ability to carefully think through each response before you send it, but the positives of face-to-face negotiation far outweigh those of any other medium.
Go In With the Right Frame of Mind
We often approach negotiations with a “hard line stance” mentality; the tougher you are, the more likely you’ll win the fight. But in fact, studies have shown angry negotiators are actually less likely to get what they want and have a harder time coming to agreeable terms with the other person.
In order to negotiate successfully, your best bet is to go into it cool, calm and collected. This way you can think clearly and articulate your points to the best of your ability.
Going into it with the right frame of mind also applies to the other party; because mood matters in negotiations, it’s best to time your approach when the other person is in an ideal emotional place to negotiate, if possible.
For example, first thing Monday morning most people are swamped catching up with emails and picking up loose threads from the week before. Thus, it might be better to time an important business discussion for Tuesday afternoon instead, when the other party isn’t thinking about a hundred other things that need to get done.
Back Up Your Claims with Neutral Facts and Figures
Whether you’re negotiating an employee’s salary or the rent on a new office space, backing up your side of the argument with “neutral” facts and figures gives you a stronger shot at getting your way. This so-called neutral information shouldn’t be colored by the emotions of one party or another; rather, it should be factual data that isn’t tied to either side.
In negotiation studies, participants who received additional neutral information tended to perceive higher levels of fairness in the other party’s argument than those who did not receive additional data.
As an example, let’s say you’re trying to nab a great candidate for marketing director of your company. As a small business, you can’t offer the same six-figure salary as the corporate giants, so it’s time to negotiate.
Instead of simply saying “we can only pay you X,” you might reference your annual report that shows the company’s year-over-year revenue and potential for future growth. You might provide a copy of your employee handbook that outlines your excellent benefits package. You could provide one-on-one time with other members of your team to give the candidate an idea of your company culture.
Notice how this is different from typical negotiating (“we’ll give you A if you give us B”). Instead, you’re using independent data to back up why “A” is such a desirable thing to receive in the first place.
Build Value for the Other Party
Finally, focus on building value for the other side. This is especially useful when you’re the perceived “weaker” party in the negotiation, or if the other party seems to hold all the cards.
A famous example often used in negotiation training is the case of the giant pandas at the San Diego Zoo. In the 80’s, the zoo’s director wanted to bring in a giant panda display, which is a popular draw for visitors and would help build the zoo’s public profile.
There was one major problem, though: China is the only place in the world with giant pandas, and the zoo didn’t have an equally giant pile of cash lying around to pay whatever sum the country requested for the animals.
In a long and complex series of negotiations, the zoo worked with multiple stakeholders (both countries’ governments, wildlife and conservation groups, and more) to negotiate from a position of what many would define as extreme weakness—China held all the power.
The zoo had to get creative to understand the wants and needs of the other side and to offer added value (new equipment, access to technology, funding for salaries, etc.) that would meet those wants and needs.
It’s a fascinating case study and I highly recommend checking it out in its entirety if you’re interested in learning more of the intricacies of negotiation.
The takeaway for you? When the other party seems to hold all the power, look for ways you’re able to build value outside of the obvious negotiating terms, then add that to your side of the case.
By meeting face to face, going in with a positive frame of mind, referencing neutral data and building value for the other side, you’ll be much more likely to reach terms that are favorable for you and your growing business.
Have you negotiated a huge deal successfully? Leave us a comment and share what worked best for you.
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