Negotiation Skills: The Complete Guide
You negotiate every day of your life. If you're not negotiating, you're likely not living the satisfying life you could be living. Negotiation is nothing more than communication—and communication is necessary with everyone you encounter, from your spouse and kids in the morning to your boss and coworkers during the day. This guide teaches the fundamental skills needed to navigate the sometimes murky waters of communication, from preparation and goal-setting to clear expression, active listening, and closing the deal. By the end, you'll understand and be able to apply these skills to become a more confident and successful negotiator in every context.
Part 1: Understanding the Negotiation Process
Before beginning any negotiation, you must understand what's involved. Negotiation occurs every time you ask someone a question that requires a yes or no answer. From asking your kids to take out the trash to requesting a raise from your boss, negotiation skills determine the outcome.
The negotiation process consists of several stages: preparation, determining what you want and setting goals and limits, communicating clearly, listening actively, and closing the deal. Each stage matters, and understanding how they fit together gives you control throughout the interaction.
The Importance of Preparation
There is no substitute for preparation. Preparing beforehand gives you the power and confidence needed to follow through and emerge successfully. Whether negotiating with a car dealer or your children, you need to know everything possible beforehand. If you're negotiating with your child to take out the trash, understand what's important to them—what can you offer in exchange that they value? With a car dealer, know the actual dealer cost so you understand how far down you can negotiate while still allowing them a profit. Preparation also means knowing what you'll do if the deal goes badly. Having an exit strategy before you enter the room prevents you from accepting terms you'll regret.
Establishing Goals and Limitations
Almost everything you want to accomplish requires goal setting and establishing limits on those goals—such as what you'll settle for or when you'll walk away. Set realistic, well-defined goals. Determine in advance what you will accept as a final outcome and at what point you'll end the negotiation. When you've carefully researched, set goals and limits, and are prepared to walk away knowing you did your best, you'll be more satisfied with the outcome regardless of whether it went your way.
Communicating Clearly
Your message, intentions, and goals must be beyond question in every aspect of your communication. That means your body language, tone of voice, word choice, and actions during the negotiation process should be flawless and well thought out. You will communicate differently with your children or spouse than with your boss, but the message should always be clear beyond reproach. If you're negotiating for a position at a company, don't try to impress the interviewer with industry jargon. You'll be far more effective sticking to your plan and remaining consistent in what you say.
Active Listening
Listening skills sometimes must be learned to be effective. You may think you're an excellent listener, but deals are lost when you're not focused on the other person, when you interrupt the speaker, or when you speak before processing the information just given. Active listening means engaging fully—not just hearing words but understanding the complete message being conveyed.
Closing the Deal
You must have skills in finishing the conversation and closing the deal definitively. The deal may not be closed when you think it is, so you must recognize the signs of a done deal. Closing may take more time than expected—in some ways, it's just the beginning because you'll need to rehash all the information and terms discussed. You'll need to recognize when to push forward and attempt to close, and how to deal with people so afraid of making a bad decision that the process continues endlessly. Remember that bad deals are worse than no deal at all. Don't leave the negotiation table feeling bad about your performance. It's better to walk away with your head held high, knowing you did your best.
Part 2: The Importance of Preparation in Negotiations
Anything becomes easier with preparation and forethought. You cannot be over-prepared. Every piece of information you gather can make the event go your way. Whether trying to get a raise or close a multi-million-dollar deal, you must prepare by educating yourself about the situation, assessing it, and applying your negotiation skills.
First Comes Research
Preparing means knowing who the other person is, what the situation involves (if negotiating a raise, know how the business is performing), and above all, knowing yourself. Knowing yourself means understanding your goals and limitations, which requires research to determine what is realistic. If you know you're a morning person, don't schedule a negotiation meeting in the late afternoon when you're not at your best. Be aware of your long-term wants and needs and how important this particular negotiation is in getting where you ultimately want to be.
Find out everything you can about your counterpart. What is he or she trying to achieve? If they're selling cars, they want you to pay a higher price. If you're educated about the marketplace for that type of car, you'll fare much better. Knowledge of the other person is paramount. It's also easier to establish rapport if you know something about them beforehand—perhaps you share a hometown, which establishes a point of connection from the beginning.
What authority level does your counterpart possess? If speaking with a CEO, you'll know they likely have final say on hiring or promoting you, which may change your approach. Don't be afraid or intimidated to ask questions during the negotiation. Asking questions shows interest and conveys your desire to learn.
Negotiating the Location
Part of your success depends on the location you choose. If you can select the room or location, make it neutral. Long, intimidating conference room tables don't work to your advantage. Keep the location more intimate, but ensure there's plenty of room for everyone. Never choose a noisy or crowded location like a coffee shop. You want to hear and be heard. Your own turf is best, but if you must go to another office, find out everything possible about that space beforehand. Traveling to another location presents problems, but arriving a day early lessens them by ensuring you'll be on time and mentally and physically prepared.
Part 3: Establishing Goals and Limitations
An important aspect of negotiation skills is knowing how to identify something you want and then planning and taking the steps to acquire it. Before sitting down at the table, do some soul-searching—ask yourself what you really want from the negotiation. Write down everything you want. Some of it may sound fanciful or unattainable, but this process helps you identify and visualize your goals. Then refine them into more realistic pursuits until you have the core of what you want. If you work with a team, ask others what they see as goals. Their input provides great feedback and ensures future cooperation.
Prioritizing Your Goals
After brainstorming, prioritize your goals properly. It's rare that all goals will be achieved in one negotiation, so determine which are most important and concentrate on making those attainable. Be specific—don't be vague when writing goals. If you want a better job, give yourself a timeline, then break it into steps. Narrow your goals to a limited number that won't overwhelm or confuse the process. Qualify your goals—be sure they're realistic. Don't underestimate your skills, but don't overstate them either. After the negotiation, you want to feel you got exactly what you wanted rather than thinking you could have achieved more.
Don't put all your hopes and dreams on one negotiation. If you don't get the job or raise, all isn't lost. Have a backup plan and move forward to the next negotiation.
Setting Limitations on the Negotiation
What is the absolute bottom line you'll accept? This is a personal decision. Examples include the maximum hours you'll work per week, the highest price you'll pay for a product, or the point at which you'll walk away. All limitations should be set before entering the negotiation, and you should be firm in your thinking. Setting boundaries makes you more decisive, which increases confidence and strength. Set realistic boundaries—if you set your limit for a car price far below market value, you're setting yourself up for failure.
Consider your alternatives. If you need a higher salary and your company won't oblige, think about moving to another company, improving your skills through education, or starting your own business. Work with others—whether a team at work or family members, other opinions provide valuable insight, especially for major changes like relocating. Standing firm becomes easier when you've carefully thought through what you want and need. Even if you walk away with nothing, it's better than caving in and regretting it later. Also consider what limitations your counterpart might have. Thinking through their possible constraints helps you adjust your own.
Part 4: Communicating Clearly to Get What You Want
"You can have brilliant ideas, but if you can't get them across, your ideas won't get you anywhere." —Lee Iacocca. Clear communication involves not only words but your appearance, tone of voice, and ability to assess the person you're communicating with. You don't communicate with a coworker the same way you communicate with a CEO. How you communicate during negotiation is one of the factors that determines whether you leave the table with what you want. You can bore the person, insult the person, or talk over their head, but you cannot be too clear.
Organizing Your Thoughts
Organizing your thoughts for negotiation is almost scientific. First, clarify the main point of the entire process—likely your primary goal, such as obtaining a raise. Then explain why you should have it. This is simple logic. List your main points clearly and make them as logical as possible. Avoid fillers that consume time and drift from the main thought. Break down negotiating points into simple language initially; you can add technical terms later once your counterpart clearly understands. If presenting many numbers, simplify them with graphs or charts. Avoid jargon—don't make your counterpart guess at what you're defining. Spell everything out exactly. Pause and ask if you're being understood. It's perfectly acceptable to check whether your counterpart comprehends what you're conveying.
Barriers and Distractions to Clear Communication
Most barriers to clear communication come from you. Distractions can occur anytime, but careful choice of time and location reduces them. Hurt feelings may cause you to avoid clarity out of fear of confrontation. Never avoid being clear because you fear distressing someone, but remain aware of their feelings and let them express themselves by listening carefully. Rejection is another barrier you must overcome. Even knowing your information may end the negotiation, you must deliver it clearly and without fear. Confusion from poor communication can damage all parts of the negotiation and make it impossible to return to the table. Never interrupt the person speaking. Wait until they finish, then ask for clarification or share your interpretation. If fatigue prevents clear thinking, reschedule or take a moment to refresh with a caffeinated beverage or a walk for fresh air.
Part 5: Improve Your Chances with Active Listening
During negotiations, it's not enough to listen with your ears. You must engage in active listening using your eyes too. With your eyes you can assess the other person's body language and gauge how engaged they are and how well they're listening to you. Most people communicate through more than words. To be a successful negotiator, learn the art of active listening, which involves much more than simply hearing.
You can hear every word and still lose the negotiation because you didn't fully understand the subtle nuances such as tone of voice, facial expressions, and body language. Ensure active listening by negotiating in a clutter-free environment—plan ahead to eliminate distractions. Turn off cell phones and find a place of relative peace. Time your responses—wait until the person has stopped talking before responding, and ensure any question reflects the message they conveyed. Stay fully focused on what the other person is saying and convey that focus through alertness in your eyes, body language, and responses. Take a break if needed to maintain attention. Repeat by paraphrasing from time to time, letting them know what you're understanding so they can restate if necessary. Be sure you get it right. It may take several attempts of asking the person to restate a point until you understand perfectly. Always be respectful and bring humor into the situation, possibly saying, "I just want to be sure I understand your terms," then repeat your interpretation.
The Importance of Body Language in Negotiations
Understanding how to communicate a point without words greatly aids the negotiation process. How a person sits, stands, dresses, expresses themselves, and moves can tell you far more than words ever could. Familiarize yourself with body language nuances before beginning negotiations—they apply to you as well as the person across the table.
Changes in facial expressions reveal whether the person is fully tuned in or becoming distracted, losing interest, or growing restless. A faraway look, grimace, or head leaning on a hand signals boredom or waning interest. A break may be appropriate, or ask directly if you're losing them or if they have questions. Interpreting a response—a nervous laugh, pursed lips, or other facial motions indicating reservations—can help you redirect the negotiation. Other negative body language signs include locked ankles, gripping an arm, crossing arms over the chest, and squinting. When a person speaks positively but displays negative body language, they may be moving away from what you're saying despite their words. Pause and ask if they understand everything or if they'd like to comment—or perhaps you simply need a break. Tuning out is indicated by specific body language. If you suspect tuning out, try taking a break. If you continue receiving signs through words or body language that the other person is disengaging, realize the negotiation may be over.
One of the best preparations for negotiation is learning all you can about body language—both what you want to present and what you want to avoid presenting at the negotiating table. Practice observing others in public places. Practice with a friend or family member before a crucial negotiation and get feedback afterward. The skills of active listening and body language interpretation compound with practice and transform your ability to navigate any negotiation successfully.
