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Negotiation is an essential business skill that can assist make or break deals, partnerships and relationships. A pacesetter’s ability to negotiate can significantly impact the way forward for the organization. In high-stakes negotiations, the key is not only to get what you would like, but also to understand what the other side values and use that knowledge to create mutual advantages.
Here are ten strategies I’ve learned over 25 years of experience as a business leader and trainer to provide help to prepare for your next high-stakes conversation.
1. Know the needs of the other party
Research is your best ally. You need to learn to conduct deeper and more profitable research. Before entering into negotiations, take the time to understand the other party’s needs, goals and limitations.
Knowing their pain points and desires will provide help to formulate proposals that address their specific concerns. Visit their website, browse their past projects, or take a look at their LinkedIn profiles to gather useful information.
2. Know your differentiators
Consider what makes you or your organization stand out. During negotiations, emphasize these unique benefits. For example, what are you able to offer that others cannot? Play to your strengths and make sure these differentiators are core to your value.
3. Set ambitious goals
Set a clear goal for the negotiation and do not be afraid to ask for greater than you expect. Research shows that the first party to offer often performs higher because it sets the parameters for the discussion.
This helps the other side understand the framework inside which you would like to negotiate and protects your ideal scenario by including “margins of safety” in your initial offer.
4. Offer multiple solutions
Dr. (*10*) Medvec uses the term “multiple concurrent offers” to gather information while demonstrating flexibility. Present several options that have the same value to you, but may appeal in a different way to the other party. This reveals their preferences and signals their willingness to work together on a mutually useful solution.
5. Listen actively
Great negotiators know when to listen. Once you have made your offer, take the time to genuinely listen to the other side’s standpoint. Failure to truly understand their position can lead to missed opportunities for a mutually useful solution. Active listening builds trust and uncovers key insights about their priorities.
6. Develop a strong plan B (BATNA)
An effective negotiation strategy is to enter with a strong “best alternative to a negotiated agreement” (BATNA). This means having a viable alternative in case the deal doesn’t go through. Knowing you have an exit strategy gives you leverage and confidence to make daring offers.
7. Don’t hand over
While flexibility is key, do not be afraid to stay the same if obligatory. A typical negotiation tactic is to push the other side away while waiting for concessions. Remember, they need what you have, so hold your ground when obligatory.
This can often lead to a higher end result for each parties. Be prepared to walk away if the deal is not useful, doesn’t align with your values, or doesn’t suit your strategy.
8. Learn the art of giving in
In negotiations, concessions aren’t a sign of weakness – they’re a part of building trust and ensuring each parties feel satisfied with the deal. When you step down, do so strategically and emphasize the value you proceed to bring. The goal is to make the other party feel positive about the “additions” they have made, even if you were already planning on making those concessions.
9. Know when to walk away
Not every deal is price making. Set clear boundaries and know your start line. Remember the saying: “A good deal is when both sides feel they have won.” If you are not getting what you would like and your BATNA is more attractive, it’s okay to leave.
10. Complete the transaction with confidence
Finally, when closing the deal, make sure all parties are clear on the next steps. Set deadlines, confirm key points and maintain a positive tone. A well-structured ending can prevent misunderstandings and set the stage for a successful relationship. Always write out the next steps for each parties and follow them. High-stakes negotiations all the time focus on long-term relationships.
Negotiation is much greater than dividing the cake; the idea is to develop it so that each side feel they have gained. By following these ten strategies and focusing on understanding the other party’s needs, you may master the art of negotiation and secure higher deals for your organization. Additionally, if you negotiate commonly, I like to recommend deepening your knowledge with a specialized negotiation program.
I once heard: “A good deal is when both sides feel they have won.” Discovering the true needs of each parties guarantees success.