Negotiation Tactics Used by Successful Executives
Negotiation is an essential part of business that can be tricky for people doing it for the first time. Employing certain tactics can give negotiators the upper hand in reaching a deal that benefits you and your organization.
Practice active listening
When negotiating it is important to show the other party that you can relate to what they are saying. The best way to do that is to be an active listener. This means not talking too much and allowing the other side to voice their concerns, desires, and limitations so that you have a clear understanding of their perspective. This information will help you form a better response.
Other tactics for showing that you are an active listener include using short phrases of affirmation, such as “yes” and “I see”, paraphrasing something the other party said to show that you heard them, and asking open-ended questions which encourage the other person to tell their side of the story.
Always be prepared
Preparation is vital to successful negotiation. You should enter a negotiation armed with as much information available. Gain a thorough understanding of the other party’s business by researching their business website and reading press releases and articles about the company. Other ways to ensure that you are entering a negotiation prepared is to learn about previous deals completed by the other party that are similar to the deal you are negotiating, be aware of what competitors have offered, and get some background information on the person with whom you are negotiating.
Don’t be a bully
According to Dr. Gretchen Schaupp of the Department of Management at Ohio University, “One of the most common mistakes that inexperienced negotiators make is to enter negotiations thinking that they need to act like a bully in order to be successful.” Acting aggressively during negotiations alienates the other party and leads to the misconception that only one party will walk away a winner, when more often, deals can be reached in which both parties benefit. As Dr. Schaupp points out, avoiding acting like a bully “can lead to one of the most unexpected and fruitful spoils of negotiation: a happy long-term working relationship.”
Never accept the first offer
A crucial mistake made by many first-time negotiators is to accept the first offer from the other party. If you do not counter, the other party may assume that their original offer was too high, causing them to regret their offer and potentially back out of the deal. Negotiating back and forth usually leads to both parties reaching a level of satisfaction, accepting the terms they want most and conceding aspects they can do without. This way both parties will be more determined to close the deal.
Know when to assert power
Negotiating involves creating a relationship and in every relationship there is a component of power. As Dr. Barry Ewy, professor of Health Law at Ohio University, states, “Each party has something of value for which the other party is willing to give something of value. When one party recognizes their item of value to be greater, they have power over the other party.” The key here is being aware of when to assert the power for the best results. Negotiators that use their power too often to get the deal they want usually gain the reputation of being difficult to work with, which in turn causes people to avoid dealing with them. Other negotiators who have power but do not use it tend not to gain the full potential benefits of a deal. Understanding when to assert your power and when to allow for some back-and-forth is a critical aspect of successful negotiation.
A creative tactic during negotiating is to utilize effective pauses. By not talking and allowing for silence, you are giving the other person the opportunity to speak. Sometimes long pauses can seem awkward and uncomfortable, encouraging the other party to speak to fill in the gaps in conversation, which could provide you with valuable information.
Mirror words and body language
Mirroring is essentially repeating the key phrases, main ideas or last words of another person as a way to show that you are interested in what they have said, and that you understand the point they are making. This is a useful tactic when building a relationship, promoting a sense of camaraderie, and establishing that you are not confrontational. In a similar way, body language should be considered as a tool to make a connection by showing interest. Mirroring body language provides visible proof that you are making an effort to build a rapport.
Following these tactics provides insight into the negotiation process and makes reaching a deal easier for all parties involved.
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