The Art of Negotiation in Business: Strategies for Win-Win Solutions

The Art of Negotiation in Business: Strategies for Win-Win Solutions

The Art of Negotiation in Business: Strategies for Win-Win Solutions banner

There is a single subject that can help you close more favorable deals that match what you’re looking for: negotiation. Mastering negotiation techniques in business can be a strategic approach to securing more favorable deals, potentially enhancing financial outcomes. Although negotiations can sound stressful, there are some surefire strategies to achieve win-win solutions, which we will cover in this ultimate guide.

Understanding Negotiation

In any business, negotiation is part of everyday life. Negotiation is simply two or more parties going back and forth before a final agreement is reached. In businesses, this typically involves negotiating over final pricing, scheduling, and terms of the agreement.

For instance, a plastics company might negotiate the price of raw plastic from their supplier. A lower cost means better margins for the plastics company, and less profit for the supplier.

Most times a sale is made, there’s some form of negotiation alongside it. To get the best results possible, you should understand the power of persuasion and influence in these conversations.

Building Rapport in Negotiation

In every modern form of negotiation, the conversation happens between you and another human. As humans, rapport and trust are fundamental during negotiations. Remembering to build rapport can be the difference between an amazing and poor deal in the end. Within building rapport, there are two major focuses. These are building trust and some techniques that can help you build rapport.

Importance of Building Trust

Trust is the foundation of most negotiations. If the other party doesn’t trust you, they won’t be willing to budge on their terms at all. But, with a good level of trust and rapport, they will be more willing to work with you to keep your relationship going.

This is the main reason why so many companies have “go-to” vendors, suppliers, and partners. Once the trust is built, both parties will be more flexible to continue working together.

Think about it this way: who are you more willing to give a ride to the airport, your best friend, or a complete stranger who just approached your car? If you’re not a rideshare driver, then the clear answer is that you’d rather drive your friend.

This example summarizes the importance of trust in any business deal. Being a ‘friend’ to the person you’re negotiating with is a quick way to close the deal, get better terms, and have a better chance of having the negotiation swing in your favor.

Techniques for Building Rapport

In most negotiations, building rapport follows the same guidelines as making a new friend. Remember to relax, smile naturally whenever you can, and avoid offensive or controversial topics.

Listen closely to what the other person is saying, and practice active listening skills.

Another great way to build rapport is to remember the little things. Remember their name but try to retain some fun facts they bring up in conversation. Maybe they talk about weekend plans with their spouse and kids one time. Then, in a later conversation, ask how their spouse and kids are doing, or ask about those weekend plans specifically.

Essential Communication Skills for Negotiation

In face-to-face and phone call negotiations, communication is critical. Remember these essential communication skills if you want to have the best experience negotiating.

  • Listening ActivelyActive listening involves repeating back key phrases and ideas that the other person said, and actively digesting what they’re talking about. Let them finish their point, and then add to the point before moving to the next topic.
  • Speaking with ClaritySpeaking clearly will allow the other person to hear you better and understand your position better. Avoid filler when you speak and focus on speaking loudly and clearly enough for them to hear you.
  • Using Non-Verbal Communication EffectivelyMake sure your non-verbal communication makes you seem approachable and interested. Avoid crossing your arms, and ensure you maintain eye contact while talking.
  • Consider MirroringThe idea of mirroring is to look at the other person’s body language and subtly do the same things they’re doing. If they nod their head a lot, you should nod your head more often than you usually do. If they are leaning with their elbows on the table while talking to you, you can do the same. Try not to overuse mirroring, because it might make the other person suddenly feel insecure, as if they’re being copied.

Dealing With Difficult Negotiations

In the world of business, there are undoubtedly going to be difficult negotiations. This is perfectly normal, and it’s okay. While you can’t always predict when a negotiation is going to be difficult, you can be generally prepared for something like this.

The big key is to stay calm under whatever pressure you’re feeling. If you get flustered and feel desperate, you could lose out on the deal or hastily agree to a bad deal.

Remember that it’s okay if you don’t close the deal, you can walk away from the table if the terms aren’t great. Try to understand where the other person is coming from and greet them with empathy and understanding while explaining your perspective. If you can’t reach a fair middle ground, then you can take time apart and think more about the deal before reaching out in the future.

A great strategy for dealing with difficult negotiations is to remember that there will always be another deal in the future. It might not be with this person, and it might not be tomorrow, but it is sure to happen.

Deal-Making Tips for Successful Negotiation

A lot of successful negotiations follow the same rough outline. Though they’re not all predictable, consider the following deal-making tips for successful negotiations:

Understanding the Other Party’s Interests

In any negotiation, there are two or more parties trying to align on a single deal. It’s good to imagine the process of buying a car. The car dealership wants to make as much money as possible, and the customer wants to spend as little as possible. Immediately, both parties are fighting on opposite teams.

But, when you start to understand both party’s interests, coming to a fair deal is easier. The car dealership wants to stay open and continue doing business, and the buyer wants a nice car that they’re proud of without spending too much money.

By reframing how you view the deal, you can come to a middle ground a lot easier.

In any negotiation, take some time and really think about the other party’s interests. If you’re not positive, it doesn’t hurt to ask them directly, ‘What are you looking for in this deal?’

Setting and Sticking to Your Limits

Before meeting the other party, try to establish a clear limit. This limit is often terms, a price, or a timeline that you cannot budge from. A limit says that if the negotiated price ever goes below a certain price, you must walk away, no exceptions.

Making these clear limits before the negotiation starts will help you avoid getting caught up in the moment and agreeing to a deal that you later regret.

Role of Ethics in Negotiation

Even though a negotiation can feel like a fight to get a better agreement, you must remember your ethics. Negotiations can quickly turn bad if both people stop respecting each other and turn it into a verbal attack.

The best way to conduct business is always ethically and with respect. Again, a negotiation follows the same format as making a new friend. Would someone be your friend if you refuse to treat them with respect and demean them?

Treat the other party the way you’d like to be treated, even if their terms aren’t what you’re looking for. If you’re kind and respectful, there’s always room for pricing, timelines, and terms to change. If you’re rude and abrasive, the other party will be more unwilling to change their terms in your favor.

Learn the Art of Negotiation at JWU

The art of negotiation in business is something you’ll encounter on a regular basis when you start working professionally. These tips will help you have more successful negotiations, but you can achieve even better results with a degree from JWU. Our 100% online MBA programs, our DBA, and bachelor’s in Business Administration program will give you the tools and power to find more success in every negotiation.

For more information about completing your degree online, complete the Request Info form, call 855-JWU-1881, or email [email protected].

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