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Why Are Negotiation Skills Important?
Mastering a proven set of negotiation techniques can yield dividends over the course of your life. In fact, strong negotiating skills can be among the most valuable assets a person can have. Throughout your life, the negotiation process may come into play for the following activities: buying and selling merchandise, overseeing real estate transactions, salary negotiation (from setting a starting salary to angling for a higher salary), assessing the market value of a good or service, and problem-solving in interpersonal dynamics, including conflict resolution.
5 Tips for Negotiating Better
If you’re committed to becoming a better negotiator, you must have a clear understanding of how both you and your negotiating partner view a deal. The best negotiations are ones that yield mutual gain. If one party fleeces the other, it will lead to hard feelings and dim odds for future deals. But an equitable, effective negotiation can lead to longterm relationships where many more deals can be struck. Here are some negotiation tips that will help you build rapport, increase dividends, and reach agreements that yield better outcomes for all parties:
- Make the first offer. One of the best negotiating strategies is to seize control of the bargaining table. The best negotiators do this by setting the initial terms of a negotiation. If they’re selling an item, they set a high value on it and leave it to the other person to propose a lower price. Research has shown that final prices tend to be higher when the seller sets the opening offer, and prices tend to be lower when the buyer offers first. Whoever speaks first sets the terms of debate and can thus steer the discussion toward their underlying interests. So take advantage of this by making the first offer.
- When discussing money, use concrete numbers instead of a range. If you’re selling a piece of jewelry and you tell your buyer that you’re looking to get between $500 to $750 for it, you’re likely going to get the lower price. This is because you’ve just told the skilled negotiator opposite you how low they can go in their final offer. Don’t yield the upper hand so quickly. You may know in your head that you’d accept $500 as a possible outcome, but there’s no need to say that from the outset. Don’t be afraid to say the price is $750, and if the other person wants to pay less, they’ll say as much.
- Only talk as much as you need to. One of the shrewdest negotiation strategies is to harness the power of silence. In real life, silence can throw people off their game and affect their decision-making. If you maintain eye contact but don’t speak, your counterpart might start rambling and make concessions that they wouldn’t otherwise. An effective negotiator will seize on these moments and perhaps make a counteroffer that enhances their own bottom line. Maintaining silence provides an excellent window into the other party’s point of view.
- Ask open-ended questions and listen carefully. When you’re trying to get your way, it rarely pays to ask simple yes or no questions. To make a back-and-forth dialogue work for you, ask open-ended questions that make the other party cede valuable information. For instance, if you’re mulling a new job offer but don’t like the initial terms offered, don’t ask a binary question like: “Is this your final offer?” As something open-ended like: “What would you say if I told you I simply couldn’t make this salary work for me?” This course of action puts pressure on the person trying to hire you. Perhaps they’ll follow up with a higher salary offer, or perhaps they’ll throw in additional perks to help find common ground. If their goal is “getting to yes,” they’ll increase their offer. And if the offer doesn’t increase, you must accept that you did the best you could.
- Remember, the best-negotiated agreement lets both sides win. Dealmakers who have a win-lose mindset tend to alienate partners and kill the chance for repeat business. But dealmakers who push for win-win outcomes—where both sides get something they want—can open a lot of doors down the road. If you approach everything like a scramble for a fixed pie of benefits, you can slip into cutthroat behavior that could damage your professional reputation. For sustained success running a corporation, a small business, or your own personal portfolio, try to be partners with the people with whom you negotiate. Attune your listening skills and watch their body language. And above all, stay honest. Don’t be the kind of person who sells damaged goods or cheats someone out of money that is rightfully theirs. If you approach each business deal ethically and with a win-win mentality, you’ll set yourself up for a lifetime of fruitful partnerships.
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