Use these negotiation tactics to successfully close deals while creating greater value and building the business relationship.
You will find many lists of negotiation tactics, some of which you will recognize in this list. We train leaders and managers to develop those negotiation skills that will not only help them successfully close bigger, better deals for their company or organization, but also will help them create lasting value. Developing greater value happens when negotiators are able to look past their own wants and needs to come up with creative alternatives and build lasting relationships with clients, vendors, and internal stakeholders.
Here are 7 of our 15 negotiation tactics that help our clients’ leadership and management teams become better negotiators.
Negotiation Tactic #1: Develop clear outcomes
Planning for negotiation is often the most overlooked step in the negotiation process. When you are planning for a negotiation, first think about and map out what your ideal outcome looks like—what is your best-case scenario in this deal? Then, do a bit of research on the other party. What industry are they in? What does their business environment look like? What values do you bring to the table, and what values do they bring?
Once you have completed these 2 steps, map out possible alternatives to your ideal outcome. What are you willing to compromise on if or when the negotiation takes a different route. What are some of the likely concessions the other party will ask for and how will you respond to them? Being prepared for alternatives and concessions before going into a negotiation situation allows you to respond and adjust to varying scenarios more effectively when you are in the moment than trying to come up with counter offers on the fly.
Negotiation Tactic #2: Treat the other party with respect at all times
In the vast majority of negotiation situations, your relationship with the other party is not likely to simply end when the negotiation does. It is far more likely that you will be working with them as a client, vendor, or colleague going forward. Therefore, it is important to remember to always be working toward building the relationship and being respectful by using the platinum rule.
Note, too, that the better the rapport, the better the negotiation. Use empathy to understand and bridge differences. Speak from your heart by using phrases such as “I feel…” when talking about sensitive issues. And always stay away from sarcasm and avoid using absolutes like “always” and “never.”
These tactics are a selection from the 15 negotiation tactics in Crestcom’s Penta Negotiator Tool Kit. Sign up to learn more by clicking here.
Negotiation Tactic #3: Ask a lot of questions
Ask questions both before and during the negotiation. Asking questions will help you in the preparation stage of the negotiation model. Also, pre-write questions to ask the other party, so you have a list of relevant, insightful questions to ask during the negotiation rather than having to think of them when you are in the moment.
During the negotiation, ask open-ended questions like, “Tell me more about that…” Why would this feature be so important to you?” This will help you clarify the assumptions you made during your preparation for the other person’s interests and concerns. It will help you better understand where the other party is coming from so you can both craft mutually beneficial outcomes.
This tactic also helps you to listen more than talk, which is an important psychological device in negotiations. Typically, the person asking the questions and staying quiet is the person who has more control over the negotiation. They are better able to collect information and intent from the other party.
Negotiation Tactic #4: Ask for what you want
Never underestimate your power or let fear prevent you from asking for your desired outcome. Take the risk.
If you have done your preparation properly, chances are you’ve already thought about your desired outcome in the context of what you think the other party is going to be able to handle. Be ready to make concessions, but don’t make concessions before negotiations get started!
Negotiation Tactic #5: Ask for and/or offer something of relative value, including intangibles
Many people tend to think of negotiations being a “fixed pie” in which only one party can win by getting the biggest slice of the pie. But great negotiators know how to use relative value to expand the size of the pie and create win-win scenarios.
Relative value refers to something that may be very valuable to the other party and is relatively easy and/or cheap for you to supply. For example, your company may be able to provide an additional network security screening service at very little additional cost to you, but your potential client knows they could really benefit from the value that extra security checks will provide. If negotiations are stuck on price, let’s say, you could easily “throw in” the service for free or at a discounted rate. It’s something that will be very easy for your company to provide, will provide a lot of value for the potential client, and will help the negotiation continue moving forward. You’ve basically “expanded the pie” by being able to stick to your price point while providing a client with a service that is valuable to them, and creating lasting value by building the relationship.
Negotiation Tactic #6: Don’t be the first to offer to “split the difference”
Speaking of getting stuck on price, when price negotiations get stuck, many see it as an obvious and simple solution to meet in the middle. (I’m at $100 and you’re at $90. Splitting the difference would put us at $95.) While there is nothing wrong with settling on splitting the difference, your best option is to wait for the other party to offer the idea. Then you can agree to split at a lower level. (They offer $95, so you offer to split the $5 and end up at $92.50).
Negotiation Tactic #7: Close with confidence and clarity
Reflect on your desired outcome and BATNAs to gain clarity on and confidence at the conclusion of the negotiation. Show appreciation and clearly summarize the key agreements and next steps. Be clear and get the agreement or contract signed to close the negotiation.
Many people would rather steer clear of negotiation situations out of discomfort or fear. But the truth is that you and your team are never making or saving more money than they are in successful negotiations. The ability to negotiate successfully in a way that creates value for the business and builds the relationship with the other party is a key skill that all leaders and managers must build and sharpen in order to be successful and lead successful organizations. These 7 negotiation tactics will help you improve your negotiation skills. Practice them whenever you get the chance and build the discipline to become a great negotiator!