Sir Auditor Uviesherhe
We all negotiate every day, whether consciously or unconsciously. Negotiation is an integral part of life, and those who have mastered this skill have used it to get what they want in business and life.
Negotiation is used in every aspect of life. It can involve salary negotiations, family matters, business partnerships, or even something as minute as getting a seat on the bus or deciding who speaks first in a conversation.
This skill is also so powerful that it could turn a SWAT officer, Chris Voss, into the FBI’s top hostage negotiator, dealing with high-pressure situations involving dangerous criminals and life-threatening scenarios.
After being with the FBI for over two decades, Chris founded a business called Black Swan Group and used this skill to negotiate high-level deals, train executives and individuals on the art of negotiation, and become an adjunct professor at prominent universities. And of course, he became a best-selling author of the book, Never Split the Difference.
In this article, we will examine how you can use this negotiation skill to get what you want in business and life. But before that, let’s look at what negotiation is.
What is Negotiation?
In simple terms, negotiation is a discussion between two or more parties to reach a mutual agreement that satisfies their respective needs and interests. When people think about negotiation, they consider the win/loss situation. This is a situation where one party gets what they want at the expense of the other. While that is negotiation, it’s only one part of it. There is a win/win situation in negotiation, where both parties get what they want and are satisfied.
A good example is a UK reality show called Dragon’s Den. In the show, energetic entrepreneurs come to pitch their businesses to potential investors and aim to get them on board. Of course, they mention the equity they want to give up during their presentation. Two things happen at this point: the Dragons (business moguls) give them what they asked for or redefine what the deal means to them by stating the equity they want for that amount.
The entrepreneur can counter the offer and meet the investor in the middle or reject the offer. If the deal pulls through, the investors and entrepreneurs always wear a palpable joy. The entrepreneur sees an opportunity to grow, blow up the business, and enter strategic markets and stores worldwide. On the other hand, the Dragons see massive potential in a business they could blow up, add to their portfolio, make their money back, and get many returns on investments, and that’s why they are called Dragons. The point is that the negotiation benefits both parties. Everybody wins together.
Types of Negotiation
1. Distributive Negotiation (Win-Lose):
This type of negotiation focuses on dividing a fixed amount of resources. Therefore, someone will always get the upper hand. When someone wins, the other loses. Likewise, when someone loses, the other wins. For instance, if two parties haggle over the price of a product, that’s a distributive negotiation. The higher the price, the more profit or gain for the seller and the less affordable it is for the customer. The lower the price, the cheaper it is for the customer and the less profit for the seller.
2. Integrative Negotiation (Win-Win):
This negotiation is called a win-win negotiation. In this negotiation, collaboration does the work. Each party involved benefits mutually from the outcome. The Dragon’s Den show depicts this well. Let’s look at another scenario. Boeing is an American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, etc. Now, here is the interesting part. GE Aerospace, an American aircraft engine supplier, manufactures Boeing’s commercial plane engines. Anytime Boeing sells an airplane, GE sells an engine too. This negotiation is beneficial for both Boeing and GE Aerospace.
How To Prepare for a Negotiation
1. Know Your Goals and Limits:
Before any negotiation, be clear about what you want. Also, while you should expect the best, expect worse scenarios. Be clear about the least favorable deal you are willing to accept. For example, if you want to buy a car, you want the best price. Your price limit is a price range you are comfortable with. If you can’t get it at that price range, you go for something lower or visit another car dealer.
2. Research and Gather Information:
Preparation is critical to walking out of the negotiation room smiling. You must research the person you are dealing with, understand their needs, and know their fears and desires.
For example, let’s say you are married to a lovely man. And your husband wants to watch a football match at night. But on the other hand, you want to watch a Bollywood series or a Telenovela. Having known that your husband loves crispy chicken and chilled juice, you decided to negotiate that for a slot to watch your favorite series. Your husband agrees because he will enjoy his favorite snack and spend quality time with you. It might not play out like this, but I’m helping you see the possibilities of negotiating even in your daily life.
3. Anticipate Objections and Prepare Responses:
One great attribute of every successful entrepreneur is the ability to anticipate customers’ questions and objections and provide answers and solutions. If you sell a product, you will likely encounter objections regarding pricing, quality, testimonials, etc. You should be prepared to answer these questions as they come up. You can devise 5-10 ways to answer the same question.
Negotiation Techniques and Strategies
1. BATNA Strategy (Best Alternative to a Negotiated Agreement):
As I mentioned, know your options and be ready to walk away if the deal doesn’t meet your minimum requirements. Don’t get too attached to a deal. To get what you want in business and life, you must be ready to leave a deal if it doesn’t meet your expectations. Also, if you already have a better offer from another company, you could push for a better deal. You could walk away and accept a better deal. They will push for your business and proposition if they truly value it.
2. Anchoring and Framing:
Whether you are the seller or the buyer, maximize the use of an anchor. Using an anchor can shape the outcome of your negotiation. Let’s say there is land or a house that needs to be sold. If you are the seller, you could anchor the price to a higher price. At the end of the negotiation, it will arrive at the price you want. If you are the buyer, you could offer a much lower cost than the asking price. It sets the baseline for negotiations and helps you get the best deal.
Also, instead of just giving them the price, present it in terms of benefits. Instead of telling them to get a solar car. You could say, “It saves you $1,000 annually in fuel costs.” That frames the pricing differently.
3. Silence as a Strategy:
Unless you enjoy your own company, silence often feels uncomfortable when you’re with someone else. The same applies to negotiation. When you make an offer and stay silent, you create subtle pressure on your counterpart to respond. This is not the time to ramble about your strengths or keep selling yourself. Know when to stop talking and start closing. Let the silence work for you. Give them space to reconsider or make a counteroffer.
4. Good Cop, Bad Cop:
If you’ve ever watched a crime movie, you’ve likely seen this strategy in action. When searching for a major suspect or interrogating others, officers often use the “Good Cop, Bad Cop” technique. The Bad Cop takes a tough stance and applies pressure to make the suspect give in or cooperate. They play the villain and create tension. Meanwhile, the Good Cop appears calm, understanding, and reasonable. They appear as someone the suspect can trust. Because of the contrast, suspects often open up to the Good Cop, believing they are getting a better deal. This strategy will work best if you are negotiating as a team.
How to Overcome Challenges and Difficult Negotiations
1. Dealing with Stubborn or Aggressive Negotiators:
Stubborn negotiators may refuse to make any compromise. At this point, you should stay calm, control your emotions, and redirect the conversation towards your common interests. For instance, if you are trying to negotiate your salary, but your boss is not flexible, focus on other benefits such as extra leave, hybrid roles, etc.
2. Handling High-Stakes Situations:
In high-stakes situations, maintain your composure. If you are securing a multi-million dollar deal, take a moment to breathe and think properly. You don’t want to make any hasty decisions under duress.
3. Turning a ‘No’ into a ‘Yes’:
A “no” doesn’t always mean the end of the road. Sometimes, it stems from an objection or a lack of clarity about the benefits. If your proposal is rejected, don’t walk away; ask why. Understanding their concerns allows you to find common ground. Once you do, reframe your offer by highlighting what’s in it for them. For instance, if you offer coaching services, you can make your program more appealing by including flexible payment plans.
Closing the Deal
1. Finalizing Agreements Clearly:
Always seal the deal with a written contract. Once an agreement is reached, ensure both parties fully understand the terms and conditions. Clarity at this stage helps prevent future conflicts and misunderstandings.
2. Creating a Sense of Urgency:
Creating a sense of urgency and encouraging quick decision-making is important when negotiating. Don’t leave the offer on the table for too long. You can say, “This offer is only available until the end of the month. After that, the price will increase.”
3. Following Up and Maintaining Relationships:
Negotiation doesn’t end with a handshake. Maintaining a positive relationship after closing the deal is key. This ties into the customer life cycle, where a person doesn’t just buy from you once but continues doing business with you over time. To nurture this relationship, show appreciation. Send a thank-you note, celebrate them on special occasions like holidays or birthdays, and find ways to stay engaged.
Conclusion
In this article, you have learned how to use the art of negotiation to get what you want in life. As you have seen, negotiation is not about winning at all costs but finding a solution that benefits both parties.
Like any skill, it improves with practice. Apply these strategies in everyday conversations, whether at work or at home. And if you found this article valuable, share it with your friends so they can benefit too.
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