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Business Negotiation Skills

Some people say that in a successful negotiation, counterparts feel as though they have lost something. Is this true?

Negotiation is a broad concept. It has a procedure that you need to follow and some skills you need to apply to get the best possible results. The most common negotiation process in most fields includes:

  • Prepare
  • Clarify goals
  • Discuss
  • Agree
  • Implement
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9 Negotiation Tips To Apply

1. Analyze possible BATNAs and select one

BATNA stands for Best Alternative for a Negotiation Agreement. Do you have another alternative to this negotiation? BATNAs work for any type of negotiation whether adversarial or the normal forms of negotiation. You should explore possible alternatives before you get to the negotiations. It will provide the willingness and power to walk away from the negotiations. 

2.   Negotiate the negotiation proceedings 

It is not good to assume the conditions of the negotiation process. These pre-negotiations will help you to know what o expect during the actual negotiations in terms of:

These will also help you to focus on the actual negotiation agenda during the negotiations. 

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3. Build a rapport

Some people get straight to business while others start with small talk before they get to the actual negotiations. Chances of striking an agreement or collaborating are higher when you spend a little time to get to know each other better. You will establish common ground and it will make the negotiations more collaborative than adversarial. 

4. Listen actively and ask questions

Most of us have a habit of thinking about the next point we will get across when the other person is talking. Listen keenly to what they have to say so that you can increase your chances of establishing their need, their feelings, and launching a strong offer. Paraphrase their statements to your own understanding to make sure you are on the same page and get clarity where you fail to understand.

As negotiations proceed, make sure you ask good questions. Avoid yes and no questions or questions that lead to such answers as they provide little information. Ask open-ended questions. For example,’ what are some of the cost factors we are looking at?’

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5. Analyze and present smart tradeoffs 

Trade-offs help break negotiation deadlocks. For example, when people fail to agree on price, they can offer another incentive to help them agree on negotiation terms. The incentives you offer should be something your counterpart values but you value less. Your counterpart should also offer something that you value and they do not to help your negotiation to reach a consensus. 

6. Make use of the anchoring bias

The anchoring bias is a well-researched philosophy that states that the first number that brought up in a negotiation has a lot of influence on the direction the negotiation takes in terms of price. You can evade this bias if you are first to mention the number. Moreover, make sure that this number favors you. 

However, when your counterpart makes the initial offer, use any of the other tips on this list such as BATNA. 

7. Use multiple offers

When you come to the negotiation table, ensure you have multiple offers lined up. Table these offers at once to give your counterpart more options and to increase the chances of a successful negotiation. He or she may not necessarily choose one at the moment but they may have one they prefer more and you may work together to make it the best offer.  

8. Agree on a contingent contract

A contingent contract is a contract that agrees on the terms of the main contract. For example, a supplier can promise to produce goods for you within two weeks. A contingent contract makes sure he or she keeps his or her word. 

In the example above, you could offer incentives if they finish early and a penalty for late deliveries. 

9. Plan for implementation

Effective contract of negotiations implementations have milestones. What are the possible milestones you can set for the project in negotiation? Set deadlines for these milestones as well to ensure that the outcome of the negotiation is progressive.

In a Nutshell

As you employ the above tips in negotiation, you should know that there are three core elements that will affect the outcome of the negotiations:

a. Your attitude

Your attitude to process, the participants, and the subject has a major influence on the negotiation outcome. Negotiations can make some people happy, others resentful and some get defensive.

b. Your knowledge

You will participate more and gain more from the negotiations you have more knowledge of the process and the issues in discussion. This is why you need the preparation stage in any negotiation process.

c. Your interpersonal skills

The chances of the negotiations becoming effective are higher when you possess some interpersonal skills. Examples of interpersonal skills needed in a negotiation include:

  • Verbal communication skills
  • Listening actively
  • Decision-making 
  • assertiveness. 

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