Whether we like it or not, our daily lives are filled with negotiations. Whether it’s trying to negotiate a lower television bill or sell our online business for six figures, working in the digital space requires that we hone our negotiation skills.
In business, negotiation skills are an absolute requirement. Even if you aren’t working in sales, the business world requires you be capable of negotiating for yourself and your company.
Since 2007 (when I started my company, Quiet Light Brokerage), I’ve found myself knee-deep in negotiations and have learned valuable lessons about how to approach negotiations to achieve your goals. Here are some of the lessons I’ve learned that may help you as well.
Let Them Win
I have four young children. If I want them to do something quickly, I’ll tell them that I want to race them. Of course, they always win the race and celebrate by saying “I won!”
Of course, they are excited, but I’m just as excited because I got what I wanted.
Understand that the person with whom you are negotiating has their own goals and requirements. Negotiate your deal in a way that helps them get their win.
Never Draw a Line
One of the biggest mistakes people make in a negotiation is to take a non-negotiable position. No one likes to lose a battle, so if you draw a line in the sand, expect your negotiating counterpart to draw their own line.
Shut Up and Listen
One of the most valuable skills I’ve learned in negotiations is to simply shut up. People don’t like silence, so they’ll often talk to fill the silence. When they do, listen. You’ll learn a lot about what you need to do to win the negotiation.
Listen to What Isn’t Being Said
If you are in a high-stakes negotiation, such as the sale of your online business, pay a lot of attention to the silence. Whenever we have a buyer who goes silent, it sends cautionary signs.
Many people are anxious to show all the reasons why their position should be the winning position, but they fail entirely think through objections. Spend some time thinking about possible objections and answer them before a your counterpart brings them up.
Surprise Your Negotiation Partner
One of the most effective negotiation techniques I’ve learned is to surprise the person with whom you are negotiating (but only in a good way). Give them something they don’t ask for, tell them something that doesn’t necessarily help your position, or raise an objection against your position that they missed.
Surprising the person you are negotiating with has the great ability to disarm them and helping the two of you work together towards a common goal of getting a deal done rather than simply trying to win.
Drop the Boiler Room Mentality
Because most of us aren’t involved in heavy negotiations on a daily basis when we find ourselves in a negotiation, we feel as if we should act like we are operating in a boiler room. We decide to “play hardball”, watch “Wall Street” a few times, and go into the negotiation as adversaries.
Hardball negotiations exist, but they aren’t as productive or fun as people may think. It is far more efficient to get your negotiation partner on your side and work towards a common goal.
Be Willing to Walk Away
“Leverage” is a fundamental concept in any negotiation. Without it, you can’t negotiate. The best leverage you always have is to be willing to walk away, preferably amicably, from the negotiations. The fact is, sometimes a deal just doesn’t work. You need to plan for this possibility and be willing to walk away.
Sunk cost bias is a real thing. If you give into sunk cost bias in a negotiation, it is a sure way to lose that negotiation.
Avoid Bad Surprises
The fastest way to derail a negotiation is to surprise the person you are negotiating with in a bad way. Negotiations are all about building trust. You can either have the person build confidence in you personally or in what you are negotiating, but that trust has to exist.
Negative surprises are a quick way to destroy any trust that was built and only serve to make building trust that much more difficult.
Always Have a Backup Plan
Being able to walk away from a deal requires that you have a sufficient backup plan. Many people walk away from a negotiation because they are rash, but when they realize that they walked away without a backup plan, they come back to the negotiation in a weakened position.
Know What You Want
It is hard to negotiate if you don’t have a goal. Know ahead of time what your goals are and what you want from your negotiation.
Know What You Need
What you need is probably different from what you want. If you find yourself losing the negotiation for what you want, you can always call it a wash and win the negotiation for what you need.
Don’t Be Greedy
I’ll never forget my investments professor in college drilling into our heads the old saying “Bulls get rich, bears get rich, pigs get slaughtered”. It’s cliche, but true. Greedy people may get some wins, but over time, most will lose more than they ever win.
Don’t Be Demeaning
You might find yourself working with someone who doesn’t know as much as you do. Don’t parade your knowledge or try to use this as a negotiation tactic. Condescension is not a winning technique. When you have to make a point, use phrases that assume they already agree with you:
“As you already know…”
“I’m sure you’d agree with me that…”
One great way to surprise your negotiating partner in a good way is to be honest and straightforward about mistakes. Owning up to a mistake proves your honesty and also helps take away negotiation leverage you may have lost by making a mistake.
Understand Their Pain
When we negotiate, we can often become so focused on what our goals are that we forget the person also has goals. To win a negotiation, you must be creative to craft a solution that satisfies their goals while also meeting your goals.
Shut Down Non-Negotiable Requests Immediately
If the person with whom you are negotiating attempts to request something that you can’t agree to, be quick, firm, and polite in your response. Don’t let a negotiating item gain momentum if it is truly a non-negotiable request.
Visit in Person
Visiting the person you are negotiating with in person is a great way to build trust. An in-person visit not only shows that you are serious about the negotiation, but it also makes you more real as a human being.
Find Unrelated Common Ground
Negotiating can be tiresome and can definitely wear on the people who are negotiating. That’s why it is very helpful to find some common ground on something not related to the negotiation. When things heat up, you can fall back on topics less consequential.
Build in Ready Negotiables
One of the arts of negotiation is to learn when it is OK to lose and when you need to win. Before you negotiate, build into your negotiation areas that you are OK with compromise. The person you are negotiating with will want to experience some “wins” as well, so be prepared to give them some.
Don’t Ever Lie (Even a Small Lie)
Low-skilled negotiators rely on lies to win negotiations. Skilled negotiators know how to use the truth to win a negotiation. You might be able to get away with lying in a negotiation, but if you don’t, the only result is that the negotiation will die.
Being a skilled negotiator is largely about how you approach other people rather than technique. Developing a good ear for listening (both to what a person tells you and what they don’t tell you), developing perspective, and keeping things honest and simple do more for getting what you want than any individual technique.