How to negotiate successfully (plus tips and its importance)

By Indeed Editorial Team

Published 30 November 2021

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Strong negotiation skills are vital in business and can mean the difference between a mediocre and an extremely successful career. If you are constantly negotiating the best deals for yourself and your organisation, you may achieve your business goals faster and more easily. Understanding how to negotiate and the ways to do so can help you be successful in business. In this article, we discuss the topic of negotiation, explore why it's important and teach you how to negotiate more effectively.

Related: What are communication skills?

What is negotiation?

Negotiation is a dialogue between two or more individuals, where each party attempts to resolve some kind of conflict or come to a mutually beneficial agreement. In a business context, negotiations happen over various things, such as finding solutions to problems, creating deals and building relationships. As such, being a good negotiator is highly valuable, because it means you can achieve favourable outcomes for yourself or the company you represent.

One example of negotiation in a business setting is when freelancers negotiate their pay with clients. The freelancer typically goes into the negotiation with a favourable outcome in mind and the client may also have a favourable outcome in their mind. The negotiation might begin with the freelancer proposing a price they may like for their services, along with a justification of the price. The client may then make a counter-offer, to which the freelancer responds. If the negotiation ends with both parties agreeing on a fair price, they may consider the meeting a success.

Related: Negotiation skills: examples and tips

How to negotiate

Negotiation takes various different forms, but typically involves the use of the same skillet. Here are some tips on how to negotiate:

1. Be considerate

Be considerate to the person you are negotiating with to have a successful and positive meeting. This includes being considerate in the sense that you are respectful and accommodating, but also by considering what the other person wants. To be fair and ethical in negotiations, you may want to always try to reach a mutually beneficial agreement and not try to benefit at the other party's expense. Giving the other party what they want, as long as it remains beneficial to you, can increase the likelihood of you getting what you want.

2. Prepare for the negotiation

Going into a negotiation properly prepared can dramatically increase your chances of reaching a favourable outcome. Various types of preparation can precede a negotiation, but typically the focus is on researching the other party, deciding what outcome you want to achieve and creating a contingency plan. Researching the other party may involve figuring out what they want so that you can accommodate their needs as far as possible. Deciding what you want in advance enables you to aim for the best outcome and having a secondary plan further increases your chances of success.

Related: How to negotiate a job offer (With tips)

3. Understand your strengths

Knowing your strengths and weaknesses going into a negotiation can help you reach a positive outcome. This can form the basis of your bargaining power, which you can use to persuade the other party to agree to your terms. Bargaining power can be anything from a time-based advantage to something financial and it can be cautiously used to advance your interests throughout the negotiation. Studying your strengths also reveals your weaknesses and knowing these can help you when designing your negotiation strategy.

4. Be confident

Speaking purposefully and with confidence is important in negotiation to get your points across effectively and persuade people. Confidence also helps with communication in general, especially in a business context where building rapport is important. Rehearsing what you'll say in a negotiation can help reduce any potential anxiety you might have and it can also help you stick to your pre-established plan. Confident people also tend to be more assertive and achieve better outcomes in negotiations when compared to people who describe themselves as unconfident.

Related: How to build confidence at work

Why is negotiation important?

Negotiation is important to make deals, solve problems, come to agreements and generally further the objectives of businesses. It's the key to creating contracts that are conducive to business success, and on a human level, negotiation is the key to persuading people to do things. As a result, negotiation is seen as an incredibly important soft skill because it drives action so powerfully and generates desirable results. Businesses need people to speak on their behalf and negotiation makes this possible.

When negotiating on behalf of a business, the negotiator may consider what the business needs, speak to whoever can make it happen, then use negotiation to increase what the business gains and reduce what it loses in each given exchange. It's also important for encouraging staff to adopt certain behaviours or to do certain tasks. For example, a manager might offer a staff member a reward for working an unscheduled weekend shift. The employee might then negotiate a better deal for themself until they agree upon a mutually beneficial arrangement.

Related: How to improve public speaking skills to communicate effectively

Tips for more successful negotiations

Improving your negotiation skills is a great way to achieve favourable outcomes more often when doing business. Here are some tips that can be useful to increase your chances of succeeding in negotiations:

  • Be the first to make an offer: Making the first offer establishes control of the negotiation and sets the initial terms to help bring you closer to your goals. You can even offer something better than what you actually want, so if you experience challenges, you can still be successful.

  • Listen carefully and respond tactfully: Asking open-ended questions and listening carefully can cause the other party to reveal valuable information that you can use to further your agenda. Responding by carefully addressing each point of concern can convey your attentiveness and show that you are seeking to make a mutually beneficial deal.

  • Be willing to say no: Being able to say no is a powerful thing in a negotiation because it displays your assertiveness and shows the other person that you have confidence. This often results in better outcomes because the other party can understand that if you don't get what you want, they won't either.

  • Use precise figures: Using specific numbers when discussing prices can help you confirm a number that may not change. For example, when you give a price range during negotiations, the other party may naturally push for a lower price, but establishing fixed figures is the better approach, as it avoids immediately opening yourself up to being haggled.

  • Be objective and unbiased: Remaining objective and unbiased whilst negotiating is an effective persuasion tactic, to show that you are fair in business. Presenting facts and information without injecting your personal opinion can make your case appear more attractive because it may have an objective basis.

  • Gather information: Gathering information on the other party is crucial to understanding what they want and how best to approach them in negotiation. The more you know about them, the better you can appeal to their interests and reach a positive outcome for both of you.

  • Aim for a win-win: The best negotiations end with both parties happy and satisfied and can also increase your chances of having long-lasting relationships. By aiming for a win-win situation, you have a much greater chance of getting what you want because you can give the other party what they want.

  • Be empathetic: Understanding the needs of the other party is essential to getting a good deal because if you know what they want, you can apply certain negotiation tactics. For example, you can drive up the perceived value of the thing they want by emphasising its benefits.

  • Strategise: Going into a negotiation with a predetermined plan of action is the most effective way to maximise your chances of success. This includes creating contingency plans for anything that might go wrong, such as feeling performance anxiety before the event or having your terms rejected.

  • Be honest: Showing honesty and integrity is important in all aspects of business, but it is especially important in negotiations. Being honest makes you more trustworthy, and if you are more trustworthy, then people are more likely to think that what you say is true and reasonable.

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