What is tactical negotiation? (Definition and tactics)

By Indeed Editorial Team

Published 8 July 2022

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.

Effective negotiations help organisations succeed. Such negotiations involve communications and decision-making between two or more parties to reach a formal agreement. Understanding and using this form of strategic negotiation in your career can help you reach goals and objectives ethically. In this article, we define what tactical negotiation is and explore some successful strategic tactics.

What is tactical negotiation?

Tactical negotiation is a method of discussion between two or more participants that helps you gain an advantage. For example, agreeing to a new contract and purchasing goods and services can result from negotiation. You decide the style of negotiation when you begin a discussion, then use your skills to reach an agreement that achieves the goals and objectives of both parties.

Ethical negotiation tactics may be as important as the final agreement itself. You may believe that the long-term relationship is an important consideration as you come to an agreement. Negotiation tactics influence the outcome of the agreement and can leave participants with a positive impression of each other.

Related: Negotiation skills: examples and tips

Forms of negotiation

Your tactics to finalise an agreement may influence the goals of your negotiation. Goals can include price, products, quality, quantity, timing and other considerations. With these goals in mind, you can choose from the following forms of negotiation:

Discussion control

Creating an environment where you control the discussion provides you with an advantage in negotiations. By asking questions, you force the other side to engage their thoughts to find the right answer. Consider using this form of negotiation by asking these questions:

  • Would you explain your reasons for your position?

  • Why do you think this is a reasonable term or condition?

  • What part of my proposal gives you the most concern or is a barrier?

  • What documentation or proof do you have that validates your position?

The aim of controlling the discussion is to build a culture of openness and trust between each side on your terms. For example, responses to the questions you ask can give the other side the context for your potential agreement. Preparing questions sets the conditions for dialogue around the issues that matter most to you, and the responses help you understand any barriers to a successful agreement.

Bargaining discussions

During bargaining negotiations, any gains made by one side, or party, occur at the expense of the other. When one side wins, the other side loses. These negotiations start with one party taking an extreme position and then yielding only a little to the other party before reaching an agreement. Parties with little or no relationship use bargaining negotiation.

Your career possibly includes negotiating transactional agreements involving the purchase of goods or supplies where the price is the sole factor in your decision-making. For example, you could use this form of negotiation to get the lowest price for office supplies, mobile phones or company travel.

Mutual gain relationships

This form of negotiation, also called interest-based negotiation, seeks to improve the quality of agreements. Both parties aim for each other's success and show trust throughout the negotiations. Discussions often feature one side, raising an issue that brings mutual gains by trading one favour for another.

You and the other side approach the negotiation as a shared problem to solve. Negotiators attempt to focus on the underlying interests of both parties as a starting point for the discussions. The shared problem forms a large part of the initial conversations with the details about the agreement flowing from the relationship that forms.

Related: 15 leadership competencies and how to develop them

Tactical and strategic negotiation skills

Skills to reach an effective deal involve you feeling confident and bringing knowledge to the negotiations. Following tactics or a pre-determined strategy can help you achieve the results you want from a negotiation. Consider these skills as you build your focus on using strategic tactics in negotiations:

Attitudes

Underlying attitudes strongly influence coming to an agreement and resolving issues in a timely and acceptable manner. For example, with purchasing negotiations, the buyer is in the superior position while both sides own the responsibility to reach an agreement. A visibly shared attitude of cooperation and compromise shows everyone's interest in moving the negotiations towards a successful conclusion.

Knowledge

Building your knowledge about the issues, the opportunities and the history of the parties in the negotiation increases and improves your participation. Gather as much information about the costs to the business of the points under negotiations and the business strategies of the other party. Knowing the businesses issues that you and the other side face now and risk facing soon puts you in a powerful position for negotiations.

Planning skills

Negotiation involves planning to help you decide what you want. Write down the best possible outcome, the least acceptable offer, the potential offers you expect from the other party and what happens if an agreement isn't possible. Preparing, planning and thinking ahead helps you make a better deal and decide how to execute the terms of a final agreement.

Interpersonal skills

Strong interpersonal skills allow you to relate well in meetings with the other side, during formal negotiations and in less formal discussions. These skills include the ability to listen well to the other party and your internal negotiating team. Interpersonal skills that connect to effective negotiation include verbal communication, reading body language, building rapport, problem-solving, decision-making, assertiveness and dealing with difficult situations.

Related: Interpersonal communications: definitions and examples

Emotional intelligence

Emotions play a role in professional negotiation. Positive emotions that you show by smiling and being polite increase trust at the bargaining table while you may channel emotions such as nervousness or anxiety to display excitement and energy. Reading the other sides' emotions allows you to better understand their perspective and feelings and shows your high degree of emotional intelligence.

Patience

Negotiations often take a day or even weeks to complete because they can require multiple discussions, often involving others with expertise and knowledge and developing counteroffers. Rather than seeking a quick conclusion, negotiators often practice patience to assess a situation appropriately and reach the best agreement. Displaying patience shows the other party that reaching a high-quality agreement is important, long-lasting and requires time.

How to use negotiation tactics

A negotiation tactic is an action you take to gain the best outcome. These tactics match the form of negotiations you use and change the course of your discussions towards an agreement. Here are some negotiation tactics:

1. Make the first offer

Many people are reluctant to go first in negotiations for fear that their bid may be too low or too high. Making the first offer may give you the advantage as you provide a price near your target price. Your opening offer is a way of communicating your price range so that negotiations move ahead.

2. Reflect on discussions

A quick way to create a rapport with the other party in a negotiation is to repeat the last point they say to you by paraphrasing their remarks. This negotiation tactic builds trust, shows that you listen and can encourage the other party to negotiate in good faith. It also buys you time to consider the other party's latest offer and prepare a thoughtful response.

3. Appeal to moral principles

This tactic reminds everyone that the goal of the negotiation is mutual satisfaction. You can raise issues and ask questions by appealing to the other party's sense of fairness. You may use language that explains how the point under negotiation is in each other's best interests and answers to everyone's desire to reach an agreement.

4. Know your price target

The target price is the price you hope for in your final agreement. Some negotiators also enter discussions knowing that an offer with a specific bottom price can trigger them to walk away without reaching a deal. Failing to decide both the target and walk-away price before negotiations may place you in a disadvantaged position.

Related: How to calculate fixed costs quickly and conveniently

5. Set deadlines

Deadlines pressure both parties in a negotiation to make choices and create movement on points of discussion. Deadlines can be external from the other party or internal within your own organisation and both may not be firm. Come to the negotiating table knowing your internal deadline and prepare yourself to test deadlines from the other party by asking the consequences of an extension or missing the date or time communicated.

6. Communicate authority limits

As a negotiator, you may communicate your limited ability to decide on certain aspects of the agreement. This tactic provides time for further discussion and broadens the understanding of who in the company has authority for levels of decisions. Negotiators often describe the limits on authority as falling within their mandate as part of openly communicating with the other party and building trust.

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