Some days it feels like life is nothing more than one big bargaining session. Some instances are lower stakes, like convincing your coworker to lend you their favorite pen. Others have greater consequences, like trying for a better compensation package.
Most people aren’t comfortable with negotiations. Despite 73% of employers expecting to adjust their initial offer, more than 55% of successful job candidates fail to negotiate their salary, even when presented with a salary range.
But learning to negotiate doesn’t only affect your bottom line. It’s a vital part of life. By improving your ability to bargain, you’re developing leadership skills that’ll help you succeed in all aspects of your life.
It’s understandable if you feel nervous at the thought of bargaining, but the only way to improve is through practice. Studying a few negotiation strategies before practicing your power of persuasion will help you feel more confident.
What’s negotiation?
At its heart, negotiation is a compromise. Two parties come to the negotiating table, each with a desired outcome. They bargain and trade concessions until they arrive at a final agreement falling somewhere between their original expectations.
In terms of negotiators, a favorable outcome often relies on their planning, persuasion, and listening skills. When they meet, stakeholders should approach the conversation with curiosity for the other’s position and a collaborative mindset committed to an equitable solution.
When successful, a good negotiator gains most of what they want while improving relationships and communicating value. They leave everyone in a better situation than at the outset.
Two approaches to negotiation
Before learning about the negotiation types you may encounter, you should understand two key approaches and how to use them effectively.
Approach one: Distributive negotiations
Distributive negotiations, or a “zero-sum” bargain, are successful when one person’s gains equal the other’s losses. In other words, there’s a clear winner and loser.
Usually, distributive negotiations involve a single issue. If you’re negotiating a janitorial contract, you want to bargain for the most services at the lowest cost. The cleaning company wants to negotiate the highest price requiring the least resources. Bringing bargaining to a successful close represents a distributive approach to the negotiating process.
Practice these three skills when faced with a distributive negotiation:
-
Strategic thinking: Because distributive negotiation requires concessions on your part, don’t be afraid to open with an offer that, while still realistic, goes above your expectations.
It allows you to make concessions in non-critical areas without compromising on items essential to a successful deal. Similarly, don’t put yourself in a difficult negotiating position by revealing the minimum outcome you’ll accept.
Approach two: Integrative negotiations
Integrative negotiation takes a more collaborative approach to striking a bargain. Often referred to as a “win-win,” negotiators work together to reach a mutually beneficial solution. This is the approach of choice when you’re handling multiple issues, such as negotiating a collective bargaining agreement.
Integrative negotiations would help a photography school and art gallery strike a collaborative agreement to cross-promote each other’s goods and services to their shared target demographic, resulting in an expanded market share.
Here’s how you can make integrative negotiations a little easier:
-
Be open: Transparency and communication can create a positive relationship and help you find the common ground necessary to reach your negotiation goals.
-
Problem-solve through bargaining: Instead of treating negotiations as a competition, use them to solve each other’s challenges creatively.
The approach you choose depends on the outcome you want. Leveraging a distributive strategy is probably the best negotiation tactic when bargaining for access to a limited resource because it’s more controlled and selective.
And the integrative approach works best when you have the luxury of abundance. It allows for open and constructive bargaining, giving you the freedom to make concessions because of the increased likelihood of receiving something in exchange.
4 main negotiation types
Here are the four main negotiation types, each with an approach (distributive or integrative) that likely works best, depending on your particular situation.
1. Principled negotiation
Principled bargaining leverages each party’s values and interests to resolve conflicts and reach an agreement. The process ensures that the outcome meets both parties' needs.
A principled negotiation consists of four elements:
-
Mutually beneficial outcomes: The integrative approach encourages parties to find solutions that benefit everyone.
-
Interest-focused: Negotiators should identify and communicate their motivations, needs, and interests to ensure everyone feels the end agreement is fair.
-
Emotional restraint: Principled negotiation aims to limit conflict by removing emotional considerations from the bargaining table and drawing attention to the issues at hand.
-
Objectivity: Stakeholders agree to base their negotiations on quantifiable criteria such as market rates, industry standards, and expert opinions.
2. Team negotiation
Business negotiations usually require a team of people to reach a consensus. Members can perform one or more duties to support a successful negotiation:
-
Leader: Holds decision-making responsibilities for the negotiation team.
-
Observer: Scrutinizes the other team’s behavior during negotiations and reports this analysis to the leader.
-
Relater: Manages conflict resolution and building relations between parties.
-
Recorder: Documents negotiations to create a permanent record for reference.
-
Critic: Evaluates the negotiation process to help team members understand a concessions' effect on the business.
-
Builder: Pulls together all the aspects of the deal, including finances, into a cohesive offer or counteroffer to present to the opposing party.
3. Multiparty negotiation
Multiparty negotiations are one of the most demanding bargaining types. In this case, you’re negotiating with more than one group, which can pose a unique set of challenges, like:
4. Adversarial negotiation
Adversarial negotiations are contentious. In most cases, the party with the most aggressive stance usually succeeds in negotiating an agreement that serves their interests to the detriment of the opposition. Negotiations of this type can involve:
-
Hard bargaining tactics: This strategy rejects compromise of any sort. Taken to the extreme, it becomes brinkmanship.
-
Future promise: Parties agree to an immediate concession in exchange for a future benefit. If this occurs, ensure you document the agreement in a binding contract to protect your interests.
-
Loss of interest: In this negotiation technique, one party feigns losing interest in reaching a negotiated settlement and is willing to walk away.
Top 9 negotiation tips
Dealmaking is a skill. Here are nine tips you can practice to harness this proficiency:
-
Research: Enter a negotiation knowing everything there is to know about your offer, negotiating partners, and industry or market factors. Use this information to get the best deal possible.
-
Be direct and add value: Be clear about your needs and expected outcomes. Illustrate the benefits you bring to the table and the consequences of failing to agree.
-
Use exact numbers: Don’t use a range of numbers in a negotiation. The other party can’t lowball you if they don’t know your minimal limit. Using a concrete number, such as $2,816 instead of $2,500, demonstrates you know the actual value of what you’re arguing over.
-
Be aware of nonverbal communication: Manage your body language and tone of voice so you don’t inadvertently give cues to the other party about the strength of your position. And monitor their nonverbal communication as well to understand the real meaning behind their words.
-
Use open-ended questions: Asking open-ended questions helps you use new information to your advantage.
Instead of asking, “Does your daily cleaning service include scouring the bathrooms and emptying the trash?” ask, “What does your daily cleaning service include?” This encourages the vendor to expand on their offering without limiting themselves to your expectations.
-
Enter with a cooperative mindset: Negotiations should aim to generate mutual gain. With that in mind, bargain to achieve a win-win situation.
When people feel like they’re on the same team and working toward a shared goal, this cooperation stimulates the release of oxytocin, a “happy hormone.” As a result, negotiators can feel at ease within the group, making problem-solving easier and more successful.
-
Identify acceptable concessions: Know what’s negotiable and what’s not. By establishing your requirements, you can compromise on other, less valuable tradeoffs and still negotiate in good faith.
-
Establish a deadline: Deadlines can force action and encourage the opposing party to make a decision. You can never be sure whether another party’s timeline is concrete, but if you’re going to establish a deadline, stand firm.
-
Prepare a “Plan B”: Should important negotiations fail, having a backup plan puts you in a position of power. You can afford to walk away from a take-it-or-leave-it proposition and still move forward.
4 skills every negotiator needs
Negotiating requires a group of skills that, when used together, helps you succeed. This includes:
- Acumen: Having business acumen means you know how to get to the heart of an issue and understand what makes a good business deal.
- Even temperament: Remaining calm during a contentious negotiation helps you defuse conflict and find an equitable solution.
- Thoroughness: Double-checking your facts ensures you establish a realistic starting position and negotiate using accurate information.
- Preparation: Planning ahead helps you address potential roadblocks and overcome objections.
Stand up for what you want
Dealmaking is challenging, especially when you’re new to it. But it’s a necessary part of life. Familiarizing yourself with negotiation strategies can help you feel more confident asking for a raise or persuading your boss you deserve a promotion.
Consider adding negotiation skills to your personal development plan. You’ll soon establish your negotiating style and start getting to “Yes” quicker than ever before.
-1.png)
