What not to do when negotiating
We’ll start by going over some negotiating don’ts, courtesy of Molly Fletcher, consultant and author of A Winner’s Guide to Negotiating: How Conversation Gets Deals Done (McGraw-Hill, 2014). Here are some negotiation blunders to avoid:
1. Don’t make assumptions.
“Failing to prepare is preparing to fail,” Fletcher said. “Preparation means gathering and understanding the hard data – for example, your comparables – but it also means having 360-degree awareness.”
This means you need to know the decision-maker and the other party’s needs, values, hopes and fears. Fletcher explains this means not assuming that anything is nonnegotiable beforehand.
2. Don’t rush.
“Share a little piece of personal information that signals your openness and desire for connection,” she said. “Doing so can shift a negotiation from an adversarial battle to a productive conversation.”
3. Don’t take anything personally.
Fletcher recognizes that 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, she cautioned.
Her 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.”
4. Don’t accept a bad deal.
Fletcher conceded that 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,” she said. “That can be discouraging when you’ve invested time and energy into getting a deal done, but it’s important to have that clarity.”
Fletcher advised that you 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?’”
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, Fletcher cautioned. Consider the consequences of over-negotiating: You might get what you want, but at what price?
“Don’t put yourself in a position where you can’t go back to a relationship because you overleveraged,” Fletcher said. “Recognize that hopefully, this is a relationship and a conversation that will continue over time.”
Key takeaway: Almost half of the employees in the U.S. don’t feel confident in their negotiation skills.
What to do when negotiating
6. Be the first to make an offer.
7. Provide set terms instead of price ranges.
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 one side benefitting 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.
Tip: There are particular concerns when you’re negotiating for a business loan. It’s essential to approach the right banks, know your terminology, limit personal guarantees, and always be prepared.
7 Business Negotiation Tactics for Success in 2022
1. Always Be Prepared
- Research the other company . Run a background check and try to thoroughly understand their business. Check their website, social media, articles written about their company, user reviews, and whatever other piece of information you can find.
- Review the personal background of the person you’ll be negotiating with . Sometimes, you can focus too much on the company and forget to also run a personal background check for the person you’ll be negotiating with. Again, look for the person’s bio on the company website, check their LinkedIn profile, and type their name into Google to find any additional information that could be relevant to know.
- Check previous deals . Inspect potential sources of information to see if you can find details about previous deals the other company has done. If the company is public (and in the United States), you can find info on SEC .
- Analyze the competitors . Check out the competitors of the company you’re about to negotiate with, and establish what are their prices and offerings. This will help you prepare to make a reasonable business offer.
2. Never Accept the First Offer
One of the most common mistakes when handling business negotiations is to accept the first offer. Why agreeing to the first offer is such a big no? First, it could make you look desperate. Second, the other party might think they’ve offered too much, and attempt to cancel the deal.
Furthermore, the buyer usually expects the first offer to be rejected and countered with another one. Back-and-forth negotiations have a tendency to bring deals to a successful closure, as both parties will be satisfied to have reached the best deal possible, and are more committed to closing the deal.
3. Ask the Right Questions
Asking questions is not something that you should be afraid of. After all, the answers you receive could be essential to the negotiations. Of course, it’s important to ask the right questions, in order to gain insights and find out more about the other person’s approach and mindset.
4. Consult the Best Lawyers and Business Advisors
For important or complicated deals, it’s a good idea to get real experts on your side to help with negotiations and contract drafts. Hiring a top lawyer or advisor will not come cheap, however, it will be well worth the money, especially if you are negotiating a deal to sell real estate property or your company, for example.
5. Start With a Low Offer
The business negotiation tactic of opening up with a low offer is also known as a lowball . This is a type of offer that is deliberately much lower than the seller’s asking price. One of the advantages of lowballing is to see how the other party will react to your offer.
Think of it as a bluff, use the first offer as a testing ground. It’s a standard practice to open negotiations with an offer that’s half the wanted amount. The same tactic is applicable when you’re the seller, but in reverse. Start with an offer that’s much higher than what you’re willing to accept.
6. Create Urgency
Creating urgency is one of the oldest business negotiation strategies, utilized in marketing all the time. The more time it takes for a deal to be completed, the more likely it is for the deal to fall through.
Keep in mind that time is not on your side. You should always look to be expeditive with responses, and also try to superintend other people involved in the deal, like lawyers. However, you shouldn’t rush through negotiations either, it’s good to take your time to secure the best terms for both parties.
7. Strategic Use of Body Language
One of the most elusive, yet very effective business negotiation tips is to demonstrate negative body language when you receive an offer you do not like. For instance, when you are given a lowball offer, you can visibly demonstrate via a flinch.
This reaction could speak more than a thousand words, and could cause the other person to change his tactics. Cleverly using your body language can really quicken complicated negotiations and bring success to your business.
8. Don’t Ignore Alternatives
Having competitive alternatives can enhance your negotiation position by allowing you to choose how to proceed. Quote prices often, when negotiating with two or more parties, so you can get better pricing or terms.
For example, if you are trying to sell your company, multiple bids will be advantageous for you. Once one of the bids reaches the price and terms that satisfy you, you can enter into exclusive negotiations with the bidder.
9. Be Prepared to Walk Away
You must be prepared to stand and walk away at all times, should the terms of the deal not suit you. Of course, it’s easier said than done, but still, in some cases this is the only appropriate action.
Why should you brush up on your negotiation skills as a technical manager?
Being a technical manager is not a piece of cake. Technical managers are responsible for building competent teams, meeting stakeholders’ technical expectations, and executing complex software projects. Negotiation skills are important for these responsibilities.
It takes a good negotiator to convince talented developers to pick your organization over other attractive companies. Managing a team of software developers will require several processes, conversations, and of course, negotiation. You also need to negotiate with third-party contractors to get the best deal for your organization.
With great negotiation techniques, you can demand better pay or additional benefits without any hassle. You can also get shorter workweeks and other perks that will make your current job your dream job.
Negotiation goes beyond the workplace. You’ll need to barter with your spouse or kids at home, too. For instance, you may need to convince your kids to settle for a healthy sandwich for dinner instead of pizza or plead with your spouse or partner to reschedule dates at the last minute.
If you do a quick review of your daily activities, you’ll find several examples of negotiation skills at work. It’s safe to say that you need great negotiation techniques to excel in your career, build solid relationships with the people around you, and live a balanced life.
4 useful techniques for successful negotiations in business and life
In negotiation, mirroring is essentially repeating a few words spoken by the other party in an inquisitive tone. It’s a subtle technique that encourages your interlocutor to reveal further information and gives you a clearer perception of their concerns or requests.
It’s a great way to highlight and clarify gray areas in a conversation. You can repeat the key terms that need to be clarified and elicit the right information from your counterpart with mirroring.
Also, mirroring keeps the conversation going and helps you reach resolutions quicker. It compels you to listen to your interlocutor and process the information gotten from them on the spot. It’s a great strategy for building good rapport and strengthening interpersonal relationships. You’ll also appear warm and empathetic, which is great for successful negotiations.
Mirroring may be verbal or non-verbal and both can be used simultaneously. Verbal mirroring is the repetition of words spoken by a person while non-verbal mirroring involves mirroring your interlocutor’s body language.
Why mirroring is so important
Mirroring is a good negotiation strategy for anyone who hates negotiating. It’s so important because it gets the other party talking and revealing vital information with little effort from you. You only need to chip in a few words to prompt your interlocutor to spill the beans.
Bargaining with reserved people can be quite taxing. Conversations end up being one-sided with little or no input from your counterpart. Mirroring is a great technique when bartering with shy people or those who would rather avoid the conversation.
It’s equally very helpful if you’re the withdrawn person at the bargaining table, but would like to be heard and contribute your piece. You’ll be able to get all the details you need to negotiate without speaking a lot.
Tips for getting mirroring right
Developer: Yes, I noticed some mistakes in the initial code. I need to audit the initial code and run another smoke test. I need some more time to tidy things up but I’m sure I can work around things soon.
We use labels daily to track, identify and save vital information in our memories, applications, and pantries. Labeling also works perfectly for negotiation. Labeling is the art of identifying the emotions expressed by your interlocutor.
You can tell a lot about a person’s feelings from the words they speak. Oftentimes, we can identify emotions such as frustration, anger, resentment, dissatisfaction, and disapproval by listening to the people with these emotions speak.
With labeling, you can voice out your interlocutor’s emotions to elicit further information from them. It’s simply identifying and expressing your interlocutor’s emotions in a manner that gets them to think about their feelings.
Labeling is a subtle negotiation strategy that works well in the workplace. It diffuses tense or negative emotions and gets the other party to address those emotions. It also reinforces positive emotions.
Tips for effective labeling
3. Tone of voice and body language
Words are golden, but the tone of voice and body language give context to the words we speak. Professor Albert Mehrabian conducted a study that compared the impact of spoken words, tone of voice, and body language in communication. The study focused on a group’s assessment of the verbal and non-verbal components of a conversation. The result is what is now popularly referred to as the 7-38-55 rule.
Content is important but non-verbal communication is key to effective communication and negotiation. Thus, it’s important to pay attention to your interlocutor’s body language and tone of voice during a negotiation. This will help you interpret and label their emotions appropriately.
Also, using the right tone of voice and body movements that compliment your words makes you a better negotiator. When your non-verbal communication doesn’t match your words, your interlocutor gets a different message entirely. They’ll most likely believe the non-verbal message over your words.
Interviewer: “I’m very pleased to meet you today.” (frowns and scrunches their nose) “I’ve reviewed your resume and I think you’re an ideal candidate for this job.” (looks away from the candidate and exchanges glances with the co-interview) “We’d like to know what it’ll take to get you on board.” (smiles briefly)
Of course, the diplomatic thing to do would be to react positively and show genuine interest and enthusiasm for the role using the right body language. But it would be difficult to believe the interviewer’s opinion and assessment of the candidate by their words, as their actions portray a different meaning.