Why are Negotiation Skills Important?
The art of negotiation and knowing how to close the deal is an important skill in life. Life is full of negotiations. We negotiate for job offers. When we get the job we negotiate for salary. We negotiate when we buy a car or a house. I know what you’re thinking these negotiations are rare but life is also full of mini negotiations that you have almost daily.
Although we put a lot of pressure on these bigger, rare negotiations, the smaller ones can be just as important we just don’t put as much thought into them because they happen more naturally.
What Are Negotiations?
Negotiations are a form of compromise. Simply put, two or more parties come together to reach an agreement. For example, asking your spouse to do the dishes while you fold the laundry is a form of negotiation. This negotiation may seem easy compared to negotiating for a car or a salary but the process is the same. When you purchase a car you want the vehicle at a fair price and the person selling it wants a fair amount of money. You are both just looking for common ground on what each of you thinks is fair.
Tips to Negotiate and How to Close the Deal
1. Be Prepared
Preparation will help you be better at just about anything in life and negotiating is no different. Get to know as much about the other side of the negotiation as you can. If you don’t know what person you are dealing with, get to know as much as you can about the company they work for.
Read reviews and talk with people you know that have dealt with this person or company. This can give you a lot of information on how willing they are to work with you on coming to an agreement.
Check out competitors and know your data before the negotiation begins. If you are buying a car know what price other places are selling similar cars for. If you are negotiating a salary, know what similar jobs are paying others for similar work.
2. Think About Your Goals
What are your goals for the negotiation? What can you live without and what is a must-have? This should be done before the negotiation begins. Your goals will guide you while you negotiate. Compare your goals to what you think the goals of the other side are. Is there a way to satisfy the goals of both sides of the negotiation?
Are your goals realistic? If you are trying to get a brand new car for almost nothing, it’s probably not going to happen. Make sure you are setting realistic goals for your negotiation or you’re setting yourself up for failure.
If you go into a negotiation with very unrealistic goals you may even insult the other side with your unrealistic offers and make them less likely to want to deal with you at all.
3. Visualize the Negotiation
Visualization is great practice for negotiating. Run through various scenarios in your head. Put yourself in those situations. Think about the different things the other side could say. Try to hear the other person say these things and see yourself respond. Visualize yourself reaching your goals in the negotiation. Try to run through as many scenarios as you can think of. This will help prepare you when the time comes for the real thing.
4. Don’t Rush
Take your time while you negotiate. If you need a moment to think something over, take it. When you don’t take the time to think about it, you risk making a bad deal or missing a good offer. Step outside for some fresh air, take a walk or better yet take a night to sleep on an offer if you have the time to do that. Talk it over with others and get their opinion on the situation. This break can also be a good time to compare the offer with competitors if you didn’t do it before the negotiation began.
5. Be Respectful
Being disrespectful is a fast way to ruin a negotiation. It doesn’t matter if you have most of the power in the negotiation, you still need to show respect to the other side. Even if things aren’t going your way in the negotiation, keep your cool and be respectful. You don’t want to be disrespected so you should avoid disrespecting the other person.
6. Build Rapport
Building rapport with the other side is extremely important for getting the best deal in a negotiation. Think about it, would you give your friend or a stranger that you know nothing about a better deal? I bet your friend would be the one to get the better deal.
Building rapport is all about finding common ground with the other person. For some great advice on building rapport check out my article about mastering communication.
7. Understand the Who Has the Power or Leverage
Many times in a negotiation one side has more power or leverage in a negotiation. For example, let’s say you are negotiating the salary for a job you are offered. You need the job because you are out of work and behind on your bills. The person offering the job has multiple applicants lined up if you don’t take the job. They have all the power in the negotiation because you need them more than they need you.
Always look for the things you can do to shift the power in your favor or at least even out the playing field. In the example above let’s say you have searched around for places to work and you have multiple offers for work. This shifts the leverage back to even or in your favor depending on how bad they need somebody with your skillset.
You should always try to have as much leverage or power in a negotiation as you can. This will ensure you get the best deals.
8. Listen to the Other Side
One of the most important aspects of any communication is listening. Negotiations are no different. Instead of thinking about what you are going to say next, pay attention to what the other person is saying. This will let you know what they really want in the deal and how far they are willing to bend to get the deal done. Often the other side will tell you exactly how to close the deal, you just have to listen.
9. Have a Back-Up Plan
The deal may not always go the way you want it to go. That’s why you need to have a back-up plan. Having a back-plan helps you keep the power and leverage in the negotiation. Without a back-up plan, you get desperate and put yourself in positions where you might have to take a bad deal.
10. Shoot for a Win-Win
The best negotiations are the ones where everyone walks away happy. It shouldn’t be your mission to get one over on the other person while you negotiate, it should be your mission to get a win-win.
If you want something more than the other side is offering you may have to offer more. Many times you can get creative and throw something in the deal that isn’t much for you but is a lot for the other person.
For example, let’s say you are having a discussion with your spouse about chores. You want her to do the dishes and laundry and you will mop and vacuum the floors. She is reluctant to agree because it takes more time to do the dishes and laundry than sweep and mop the floors. You may have to throw something into the negotiation to sweeten the deal. Now say your wife doesn’t mind doing the dishes but hates putting them away. If you offer to put them away which doesn’t take very much time it makes the deal much more of a win-win.
11. Be Ready to Walk Away
One of the best tools you can have while negotiating is the power and ability to walk away. Put yourself in a position where you have other choices and can walk away if an agreement can’t be made.
Make sure when you do walk away you do it respectfully. Don’t burn that bridge. There are many times where you will respectfully walk away from the deal and receive a call later from the person with new terms to try to bring you back to the negotiating table.
It can be intimidating to negotiate for a lot of people but when you think of it as a friendly conversation where two or more people are just trying to help each other out it becomes much easier. If you focus on preparation and having a win-win situation for all involved, you will have a lot of success in your negotiations. Avoid backing yourself into a corner where you can’t let the negotiation fall through so you don’t lose all the leverage and power. If you follow these tips and practice to build your negotiation skills it won’t be long before you can negotiate with the best of them.
- Coursera offers many great courses from top universities at an affordable price. Click the link to see the courses on negotiation.
- Udemy is another great site offering courses on various topics. Click the link to check out a course on becoming a better negotiator.
- Expert Rating is an online company offering affordable certification courses. Click the link to check out their management certification course.
- Brian Tracy is an award-winning personal and professional development author. Click the link to see his course on becoming a great communicator.
- Brain Sensei offers courses and exam preparation to get those certifications and finally move up in your career. Click the link to check out their PMP prep course.
If you enjoyed this article on negotiation skills and how to close the deal please share using the buttons below.