The best negotiator isn’t the big-talking powerful personality. The best negotiator is armed with information, backed by research, and reinforced by facts and figures.
Negotiation is more detective work than it is anything else. When you can go into a negotiation with the right information, then you have all that you need to win.
What is the right information? You want as much information as you can possibly gather, but here are the absolute essentials. Discover these facts and you’re headed towards a winning negotiation.
1. Know Your Ideal Outcome
The most dangerous mistake of a negotiation is not identifying what you want. If you prepare for nothing, then you are prepared to lose everything.
Make a list of your desired outcomes, and rank them in order of importance. Make this list as specific as possible, including numbers and prices.
You can make your list as long as you want, but realize that the items toward the bottom of the list are not as important as the ones at the top. In this way, you can rank your priorities, and work strategically to gain the most important ones.
2. Know What the Other Party Wants Most
It’s not enough to merely to make a want list for yourself. Make a list on the other party, too.
Many times, negotiators come to the table with one thing on their mind: What I want. This is shortsighted and lacking in strategy. A negotiation is about two (or more) parties, and therefore, is about two or more desired outcomes.
Identify what’s in it for the other party. Assess their big goals. Determine their likely budgets, a probable price point, and things that they may be willing to give up.
3. Know Your Disadvantage
Every one of us has some built-in disadvantage that we bring to the negotiation table. These could be systemic injustices like race, gender, or cultural biases. In other cases, you may be working against the disadvantage of funding, experience, location, or business size.
Whatever your disadvantage — and you probably have one or more — understand this disadvantage and work with it.
Don’t seek to overcompensate. A disadvantage is not a weakness. It is a reality of negotiation that builds itself into the negotiation process.
If you can identify your disadvantage prior to negotiation, you build a fortification of self-awareness and confidence.
4. Know What You Want to Give Away
A negotiation is about give and take. If you want to succeed, you’re going to have to give away something. Decide ahead of time what you want to give.
When you decide beforehand what you want to give away, you create a powerful sense of preparedness. You’re untouchable. You’re confident. You can’t be cowed into handing it all over, because you already know what it is you’re going to give away.
Don’t frame this as “giving up.” Frame it instead as a gift that you’re giving to the other party. You’re giving them something that they want. According to Cialdini's six principles of influence, this is the principle reciprocity.
Reciprocity states that “people’s natural instinct is to return a favor.” You’re already prepared to give up something — a term, a price, a time period, whatever. Instead of merely “giving it up,” make it a point that you’re giving this to them.
Do so voluntarily with a sense of goodwill and pleasantness. You already know that you’re giving it, so you might as well make the most of the opportunity.
This tactic is often called “expanding the pie.” It changes the whole feel of a negotiation. Instead of being a fight-to-the-death, winner-take-all scenario, the negotiation becomes an iterative process of enhancing the deal — mutual giving.
Most people with a modicum of humanity will want to repay your favor in some way. This “repayment” could come in the form of more favorable terms.
Watch your timing on this point. If you give them something too early, it will seem artificial. If you do it too late, you’ve ruined your chance of receiving their favor. A middle-of-the-meeting time point seems to work the best.
5. Know Your Walkway Threshold
Others call this the “walkway price” or “reservation price.” It may not be a specific price as such, but it could be a set of terms. This is the point at which you say “no,” and leave the table.
It is important to set limits in every area of life. Negotiation is no different. The negotiation may reach a point at which you’re done. You can’t get anything better, but you don’t give in. You walk away.
Walking away from a negotiation is not a loss. It is a strategic advantage. You’ve maintained the status quo, but you’ve also learned a great deal about the other party, information that will aid you in future negotiations.
Conclusion
Think back to your last negotiation. Did you have the right facts? You don’t have to know everything, even though more is better. You simply have to know the right things.
Simple preparation will make you a master negotiator. Negotiation is a practiced art. The more you do it, the better you’ll get. However, with just a little practice and a lot of preparation, you’ll be able to win big on just about any negotiation you enter.
