Before your next negotiation, brush up on your skills with these valuable tips.
In today's globalized economy, negotiating effectively is imperative if you want to be successful. In most fields, negotiating is part of the job, and you have to learn how to argue your points adeptly; otherwise, you can be on the losing end on deals, money and opportunities.
In normal, everyday life, negotiating is also important, because it's required in many different scenarios: When you buy a car, want a higher salary or to dispute your cell phone bill. Whatever the case may be, the ability to negotiate is a highly sought-after skill that more people should develop and refine.
To become a better negotiator, here are three tips to help you get started.
1. Plan ahead
You wouldn't go into an important exam without studying beforehand, so why would you enter a negotiation unprepared?
Researching the company or individual(s) you will be negotiating with is absolutely essential if you're going to get the deal you want. Map out what they're looking for, what they need, what their limit may be and other factors that'll help you determine where you stand in the deal.
The more you research those with whom you will be negotiating and their options, the better the outcome will be for you. You will enter negotiations more confident and prepared.
2. Be a good listener
They say we're born with two ears and one mouth for a reason, and when it feels like someone has been talking for ages, this advice comes in handy.
Negotiations aren't about dominating the discussions. It's more about understanding your opponent and the factors that attribute to their position and their offer. A lot of the time, you'll find out plenty of information just by sitting back and listening to what the other person has to say.
Follow the 70/30 rule of communication: Talk 30 percent of the time during your discussion and listen for 70 percent of the time. Show your opponent that you care about their offer and the reasons behind their offer by giving them your undivided attention.
By actively listening, you're showing respect for the other person rather than dismissing them, something that is far too common in negotiations. When you listen, communication and understanding improve, and you're both better able to see where the other is coming from. This allows for both parties to leave feeling satisfied and content with the outcome.
3. Anchor your position
Harvard Business Review describes anchoring as a cognitive bias that occurs when too much emphasis or focus is put on the first number or offer – known as the "anchor" – submitted in a negotiation. Often this information, or number, then skews one's judgment.
Making the first offer in a negotiation has its benefits because it puts the person making the offer in a position of control. It automatically leads the discussion in their favor.
But when do you know if you should drop your anchor or hold out on your offer? Harvard University says the final agreement reached should be based on two things: the range of options acceptable to both parties and your opponent's zone of possible agreement (ZOPA). ZOPA is the bargaining range created by the two opposing sides, or how much each side is willing to bargain their offers.
If the size of your opponent's ZOPA is on the lower end – meaning they are less willing to negotiate – it's more difficult to drop your anchor. If you know your opponent's ZOPA has a higher range and they're more flexible, stating your offer first will likely turn out in your favor.
If your opponent beats you to the punch and drops their anchor first, the most important thing is not to give in right away. This can be difficult when you feel the pressure and demands from the other side, but the calmer and more collected you remain, the better results you'll get.
Instead of saying yes or no right away, suggest finding a middle ground by continuing the conversation. You might say something like, "I see where you're coming from, but let's discuss X and Y a bit further so we can come to an agreement we're both happy about."
It's all about reading your opponent and, as mentioned earlier, doing your homework.
Over to you
Negotiations aren't about talking over the opposing side or expecting certain outcomes without doing your homework. A successful negotiation requires research and the confidence that an agreement can be reached that is positive for both sides.
How will you handle your next negotiation?