6 Key Business Negotiation Strategies
Before you go into a business transaction, you'll need to develop some reliable negotiation skills. Often, when discussing s selling price, salary negotiation, or real estate deal, you'll encounter a first offer that simply isn't acceptable. If you commit to a robust negotiation process, though, you may be able to sweeten the terms and take care of your bottom line. Consider these six effective negotiation tactics in your real-life business interactions:
- Work toward a win-win situation. In successful negotiations, both sides leave the bargaining table feeling like they got a win. In that sense, effective negotiators view their work as problem solving. Ask yourself: What do I want and what does my negotiating partner want that neither of us have right now? Then, propose a deal that addresses both sides' needs and produces a better outcome.
- Open the negotiation with a highball or lowball offer. If you’re a buyer and you know what you’re willing to pay, you can start by offering half that amount. Even if you know the seller would never accept your offer, you've established a reference point for further negotiation. This negotiation tactic might yield a lower price than if you'd made a more reasonable offer to start. The same tactic stands if you’re the seller: Lead with a selling price that is higher than what you’re willing to accept.
- Set an expiration date for your offer. If you believe you've made a reasonable offer, give your negotiating partner a deadline to accept it or walk away. Be aware that even if you present the offer as "take it or leave it," the other person may still come back with a counteroffer. Nonetheless, setting an expiration date forces the other side to get serious. For this reason, it's one of the more effective negotiating tactics, and skilled negotiators employ it at various stages of negotiation.
- Use mirroring to show that you’re paying attention. Professional negotiation training often focuses on the principle of mirroring. Mirroring is the repetition of key words used by your negotiating partner. The technique can be especially effective when you’re repeating words that your counterpart has just spoken. Mirroring lets the other side know you’re paying attention to what they’re saying, and it shows that you treat their views with close consideration.
- Send clues with body language. One of the more subtle yet effective negotiating strategies is to stealthily show negative body language when presented with an offer you don't like. For instance, if you’re offered a lowball price, you might allow yourself to visibly flinch. This flinch may communicate your reaction on a more visceral level than any vocal response, and it may cause your partner to recalibrate. Strategic use of body language can quickly simplify complex negotiations and lead to business success at the negotiation table.
- Embrace the best alternative to a negotiated agreement. If both sides are steadfast in their positions, getting to yes may be impossible for one or both parties. The best alternative to a negotiated agreement (BATNA) establishes parameters for what happens if no agreement is reached. For instance, if a worker insists they need a raise to remain in their job and their boss simply refuses, a BATNA resolution might call for the worker to remain in the job for six more months at the current rate, after which point they will leave. While a BATNA has far more trade-offs than a successful business resolution, it should ideally make concessions to both sides. In this case, the employee has six months to find a better-paying job and the employer has six months to find a replacement.
Learn more about negotiation strategies and communication skills from Career FBI hostage negotiator Chris Voss. Perfect tactical empathy, develop intentional body language, and get better results every day with the MasterClass Annual Membership.