Negotiation is a part of everyday life, whether you are a car salesman closing a sale or an employee requesting a pay rise at work. It is the process of communication through which two or more people try to reach a ratified contract.
Done well, negotiation can be a win-win situation for all parties involved. However, if it is handled poorly, it can lead to conflict and resentment.
There are a number of different negotiation tactics that you can use in order to get the best outcome for yourself. In this article, we will look at six of the most effective. Let’s get started.
Tactic 1: The ‘Take It Or Leave It’ Method
The first tactic is one of the most common and is known as the ‘take it or leave it’ method. This approach basically involves putting all of your cards on the table, letting the other person know that you’re not going to budge, and seeing if they are willing to meet you halfway.
If they aren’t, then you can either walk away or give them a final offer. This tactic can be very effective, but it’s important to make sure that you are actually willing to walk away if the other person doesn’t agree to your terms.
Tactic 2: Research the Competition
In a business context, negotiating is best thought of as a process of exchanging value. Your goal is to create as much value for yourself as possible, while also being fair to the other side.
A key part of this process is understanding what the other party wants and how much they’re willing to pay for it. This means doing your research and getting to know the competition.
- What are their products and services?
- How much do they charge for them?
- What are their strengths and weaknesses?
- Do they create W-2s for their employees?
- What can you offer that’s better than what they’re currently offering?
When you understand the competition, you can better gauge what’s a reasonable offer and what might be a deal-breaker for the other party. For example, if you know that the competition is offering a product for $10, you might not want to offer more than $8 for the same product.
Tactic 3: Research the Negotiator
Just as it’s important to know your competition, it is also financially prudent to conduct some due diligence on the person or organization you will be negotiating with.
You want to understand their motivations, goals, and constraints. What is important to them? Do they make sure to prepare 1099s for their contractors? Do they have a reputation for being inflexible? Knowing the answers to these questions will help you anticipate their moves and better plan your own strategy.
For example, if the other party is very motivated by profit, you might be able to get them to agree to a lower price by highlighting the additional revenue your product or service will generate. Conversely, if they are more interested in maintaining a good relationship with their customers, you might want to focus on the value your product or service provides.
Tactic 4: Take a ‘Foot-In-The-Door’ Approach
When a negotiation just isn’t going your way, it might be time to try a foot-in-the-door approach. This tactic is based on the idea that people are more likely to agree to a larger request after they’ve already agreed to a smaller one.
To use this negotiation tactic, start by making a small request that’s easy for the other person to agree to. Once they’ve said yes, make your larger request. Because the first request was so small, the other person is more likely to say yes to the second one as well.
This approach can be especially useful if you’re trying to get someone to agree to a larger contract or purchase. By starting with a small request, you make it easier for the other person to say yes and increase your chances of getting what you want in the end.
Tactic 5: Use Emotional Tactics
Business deals can feel quite cut-and-dry, but remember that the person you are negotiating with is a human being – not just a contractor or a company representative. They have feelings, and they will respond to your actions emotionally.
If you can make them feel good about the deal, they are more likely to agree to it. Conversely, if you make them feel bad about the deal, they are more likely to back out.
Some things you can do to make the other person feel good about the deal include:
- Making it clear that you are also benefiting from the deal
- Complimenting them on their skills or knowledge in the area
- Expressing gratitude for their time and willingness to negotiate
- Achieving a compromise that is beneficial to both parties
By using emotional negotiation tactics, you can influence the other person’s actions and get them to agree to a deal that is more favorable to you.
Tactic 6: Know Your Value
Some less-experienced negotiators can be tempted to give in or settle for less if they feel they are not in a strong bargaining position. Don’t do this. You need to know your value and what you are worth before entering into any negotiation. This will help you stay confident in your negotiating stance, no matter what the other party may try to throw at you.
If you don’t know what you are worth, do some research. Check out industry reports or consult with an expert to get a better understanding of what your skills and experience are worth in the current market.
Then, when it comes time to negotiate, be sure to communicate your value confidently and remind the other party that you are not willing to accept anything less.
Negotiation Tactics: Conclusion
There are many negotiation tactics you can use in business, and the six listed above are a great place to start. However, always keep in mind that the best tactic for any given situation may vary depending on the other party’s interests, personality, and goals. Use your best judgment and be prepared to adapt as needed.