How to negotiate successfully and get your way? Which tactics to use and how to avoid an adversary’s attack? Which mistakes should you avoid? In today’s article, we’ll tell you what you need to do to become an unbeatable opponent and a sought-after business partner in a business negotiation. Are you ready?
In the article you will find:
- 5 stages of negotiation
- 10 tips on how to negotiate and get your way
- how to deal with unfair negotiation tactics from your opponents
- the most common negotiation mistakes
The 5 stages of negotiation
To increase your chances of success, you need to address the entire negotiation from start to finish – including the phases that precede it. Specifically, a business negotiation has the following 5 phases:
Phase 1 of the negotiation: Preparation
A business negotiation begins long before you meet your opponent – with preparation. Thorough research is a must before the negotiation, so that you get all the information you need about the other party. You will start off in a better negotiating position, gain confidence and prepare the most effective arguments or responses to potential objections in advance. Analyzing your own portfolio and comparing it with your competitors will also help.
There are some basic questions you should ask yourself in preparation for a business negotiation:
- Who is the person you will be negotiating with? What is his/her position in the company and what are his/her responsibilities?
- What are your company’s strengths and weaknesses? (A SWOT analysis will help you with this.)
- What are the strengths and weaknesses of your opponent?
- What are the needs of your business partner and their customers?
- What is the main objective of the negotiation?
- What concessions can you afford to make, and what must you not discount at any cost?
- What are the most likely objections your opponent might raise and how can you respond to them?
Phase 2 of the negotiation: Choosing a strategy
Have you answered the questions and gathered all the necessary data? Then choose an appropriate strategy based on the information you have gathered.
- If you and your business partner have common goals, the most advantageous strategy will be to work together.
- If your goals are largely common but diverge, try to reach a compromise.
- If your goals are diametrically opposed, go for tougher strategies, such as direct confrontation.
Once you have chosen an appropriate strategy, prepare specific tactics that are consistent with it and that you can use in the negotiation. We will introduce them later in the article.
Tip: You don’t have to stick to your pre-selected strategy tooth and nail. If the negotiation turns out differently than you expected, there’s nothing wrong with changing your strategy. ou can continually adapt it to the specific opponents and the atmosphere of the business meeting.
Phase 3 of the negotiation: Starting the negotiation
Do you know who is in the best position during a business negotiation? The one who starts talking last. Because the moment he or she starts talking, he or she already knows what opinions and positions the others hold. This gives them the opportunity to select the appropriate arguments. It’s called the first-move rule.
If you want to learn how to negotiate successfully, focus first and foremost on mastering this phase of the negotiation. Learn to listen, observe and anticipate. Don’t pull all the aces out of your sleeve and make concessions just yet. There will be time for those later. Scout the ground, assess your opponents, discover their strategies and find out what their objectives are. Only then really start negotiating.
Phase 4 of the negotiation: The process
Once you get into the actual negotiation, focus on getting the most out of it. Use the tactics you’ve developed in your strategy and continually adjust them as the situation changes. Enforce the quid pro quo rule: only make a concession if the other side makes one. Respond to objections and don’t be afraid to take time to think about the harder decisions.
Phase 5 of the negotiation: The end
Negotiations should ideally end with the goal you have set. How do you know when your business partner is ready to end the negotiation? They ask questions that indicate his or her interest, such as: What will the invoices be due? When will you ship the goods?
You can also read interest at the end of the negotiation from non-verbal signals. Your opponent relaxes and starts to send more friendly gestures: they lean towards you, start to unintentionally mirror your movements or cross their legs in your direction. The moment you know you’ve won, don’t wait for anything and let them sign the contract.
10 tips for successful negotiation
Entire books could be written about how to negotiate and master every tactic down to the last detail. But the basics of negotiating can be summed up in 10 simple tips. Here they are.
1. Set a goal
With precise definitions and specific numbers, determine what you want to achieve through business negotiation. Create your goal in three ways:
- Ideal goal – the best result you can achieve.
- Minimum acceptable goal – the minimum result you can still accept. For example: I will sell the goods for at least £2,000. I can’t afford a lower price.
- Realistic goal – a result you can realistically expect. For example: Given the quality of the products and other conditions, I will probably be able to sell the goods for £3,000.
2. Be patient
Do not accept an unsatisfactory offer just because you are tired and want to end the negotiation. Learn to be patient, and in the end, it will be you who will slowly present one argument after another, while your opponent nods to get it over with.
3. Overestimate the offer
In the beginning, ask for a little more than you realistically expect. Later, you can gradually discount your request until you get to the realistic offer. For example, you ask for £3,000 and gradually negotiate until you get to £2,000. Your opponent will be satisfied that they negotiated a “discount”, and you will get what you wanted.
Beware, though – if you start too high, your opponent will immediately understand what you’re after. In any case, keep within the bounds of what is realistic.
4. Use numbers as evidence
While emotional arguments often prevail in B2C business, a professional negotiator values numbers and evidence more. Therefore, back up every claim with actual results. For example: I am a very reliable supplier. My service is successful in 97% of cases.
5. Don’t just give up
Never make concessions just for the sake of it. Before you concede any of your demands, ask the other party to do the same. With the concession-for-concession rule, you can achieve a fair negotiation.
6. Listen actively
The best solution for you is a win-win situation where both you and your business partner benefit from the outcome of the negotiation. Not only will you get what you wanted, but you will also maintain an excellent business relationship. To achieve this, you need to listen to your opponent carefully and assure them throughout the negotiation that you fully understand them and their situation. Listen to every detail and don’t take anything lightly.
7. Check that your opponent is trustworthy
In a business negotiation, don’t automatically believe everything your counterpart tells you. Check all the facts and ask for more details. It may not be that the other party is deliberately lying to you – they may just not understand the issue. Therefore, use smart questions to make sure that your opponent is an expert and is telling the truth.
8. Point out the competition
Hint that if your opponent does not accept the offer, you have someone else in reserve. This will let them know that you don’t have to accept all the concessions they want from you, and instead persuade them to start competing for your attention.
9. Use mirroring
Former FBI negotiator Chris Voss advises using the mirroring technique. This involves imitating your opponent by using the same words and the same non-verbal signals that they use. This is because people subconsciously like those who are like them.
But be careful. This is a very well-known psychological method. If you mirror too strongly, the other party is very likely to see through you.
10. Be silent
Silence is a powerful weapon. When the other party says something you disagree with, rather than immediately objecting, keep quiet and let your body language do all the talking. Your counterpart will start feeling uncomfortable, realize they said something wrong, and discount their claims on their own.
Unfair negotiation tactics and how to respond to them
A business negotiation can be a friendly chat over coffee, but it can also be a frantic bargaining for the best terms at any price. Dishonest negotiators may resort to tactics that are not in line with ethics. Which are they and how to respond?
A business partner will bring in several other negotiators who will throw one question after another at you to unsettle you. What to do? When arranging a meeting, agree in advance how many people will be present at the negotiation.
The counterpart tells you that they have a limit that they must fit into. For example, they can pay no more than £15,000 for your goods because “that’s all they have”. If such an offer is disadvantageous to you, do not accept it.
The other party tries to persuade you through emotion. They describe their situation in a touching way or even try to make you cry. Don’t lose your temper and rather reschedule the negotiation. Alternatively, pay your opponent back with the same coin – if you give in to their demands, you will be in a heartbreaking situation for a change.
The negotiator will present you with three product options: one extremely cheap and poor quality, the other extremely overpriced. Only the third one is the one they want to sell you – with the argument “great value for money.” Don’t succumb to the automatic impression that this is a great deal and think rationally.
Remember Inspector Columbo? He always left at the important moment, only to return a moment later to take advantage of the person’s carelessness. Your negotiating counterpart can do the same. At the crucial moment, they’ll start feigning disinterest, but after a while they’ll decide that they might accept the offer after all – but only under certain conditions. Of course, the conditions are favourable to them. How to defend against this technique? Remember that it exists, and don’t be so distracted by it that you make a disadvantageous concession.
The phonograph records
“We’ll buy the goods from you for £15,000.” “That’s too little.” “Oh, well. So, we’ll buy the goods from you for £15,000.” The negotiator using this tactic repeats the same thing repeatedly to tire you out. They hope that when they make the offer for the twentieth time, you’ll be so fed up that you’ll nod. What about it? Tell them flat out that you know the tactic and it won’t work on you.
The most common mistakes in business negotiations: Do you make them, too?
Business negotiation is an art, and it takes months, sometimes years, to perfect. Many negotiators, both experienced and inexperienced, make the same mistakes repeatedly. Do you make them, too?
- You make claims, but you don’t back them up with evidence.
- You ask negative questions – the human brain has a subconscious tendency to answer “no”.
- Because of fear or insecurity, you underestimate yourself and make lower demands than you could.
- You don’t reveal a coercive technique, and thus you agree to an unfavourable offer.
- You talk too much – you put yourself in the position of someone who is trying to get attention and must make concessions.
- You rush, so you don’t have time to use all the aces you’ve prepared.
You can make a successful deal without negotiating
You don’t have to learn something you don’t like or spend time mastering negotiation tactics you rarely use. You can leave the whole deal area to us. We’ll do the market research for you, call potential customers or negotiate terms with suppliers. Read more about what we offer or contact us directly and tell us what you need help with. Together we’ll work out the best solution.