How to Master the Art of Negotiation

Many people believe that negotiations are all or nothing, and that there has to be one winner and one loser. Nothing could be further from the truth.

While the goal of negotiation is most certainly getting what you want, the fact is that the best deals (and the ones that stick) incorporate ideas and terms from all parties.

In this article, we'll provide some tactics and tips that good negotiators use to get what they want. These suggestions may be used in virtually any negotiation process.

Before the Negotiation

Before any formal negotiation, it is important for an individual to review what they want to attain and how they might achieve success.

Get Prepared

1. Define your specific goals or desirable outcomes. Be optimistic. Ask yourself what a "home run" would look like? This could range from getting some of what you want to all of it.
2. Next, identify several alternate scenarios that you'd be comfortable with that would still get the deal done.
3. Then, identify any potential weaknesses in the opposing party's position. For example, in a real estate transaction, one party may know that the other party has to sell or face a liquidity crisis. Having such knowledge of weaknesses is important because it can help you turn negotiations to your favor. At the very least, it may help both/all parties pinpoint a valuable area of middle ground.
4. List the reasons why your proposal may also be beneficial to those with whom you're negotiating. Bring up these reasons in the actual negotiation to try to advance your cause and/or help to identify some common good.

Using real estate as an example again, one party could argue that their bid is more favorable than others, even though it's lower in terms of dollars, because it's an all-cash offer and not a riskier financing scheme or a stock swap.

By explicitly pointing out the advantages to both parties, a negotiator increases the odds of getting the deal done.

The Negotiation

In-Person

Ideally, each party should identify their goals and objectives at the outset so that everyone knows where they stand. It also establishes a basis for a give-and-take conversation. At this point, each party may offer its fall-back proposals and counter-proposals to hammer out a deal.

That said, beyond the initial back-and-forth of proposals, there are also other things that negotiators can do to enhance their chances of turning the deal in their favor.

Let's use body language analysis as an example.

Was your proposal well received? Positive signs include nodding of the head and direct eye contact. Negative signs include folding of the arms across the chest, the avoidance of eye contact, or a subtle head shake as if to say "no." 

Pay careful attention when you ask someone a question. You'll see that more often than not, a person's body language can yield a lot of information regarding their underlying feelings.

By Phone

If a negotiation is done over the phone, body language can't be determined. This means that you must do your best to analyze your counterpart's voice.

As a general rule, extended pauses usually mean that the opposing party is hesitant or is pondering the offer. However, sudden exclamations or an unusually quick response (in a pleasant voice) may indicate that the opposing party is quite favorable to the proposal and needs a little nudge to seal the deal.

By E-Mail or Mail

Negotiations done through e-mail or the mail (such as those concerning residential real estate transactions) are a different animal altogether.

Here are some tips:

• Words or phrases that leave ambiguity may signal that a party is open to a given proposal. Look specifically for words such as "can," "possibly," "perhaps," "maybe," or "acceptable." Also, if the party uses a phrase such as "anxiously awaiting your reply" or "looking forward to it," this may be a signal that the party is enthusiastic and/or optimistic that an agreement may soon be reached.
• When the opposing party makes an initial offer or a counter-proposal, see if you can incorporate some of those ideas with your own and then seal the deal on the spot. If compromise on a particular issue is not possible, propose other alternatives that you think would be favorable to both parties.
• Finally, a more formal contract reflecting the terms agreed upon during the negotiation is a must. To that end, have an attorney draft a formal contract soon after the negotiation process is completed and make certain that all parties receive and sign it as requested.

No Agreement? No Worries

If an agreement cannot be reached in one sitting or one phone call, try to schedule a follow-up meeting to continue discussions, or make sure it's understood that you're open to future negotiations.

By making such an effort, you'll be seen as sincerely believing that a deal can reached. You are willing to work to make that happen.

In between negotiations, review what happened in your initial meeting. Did the other party reveal any weaknesses? Did they imply that other factors may have an impact on the deal? Did your offers and suggestions strike a chord or leave them cold? Pondering these questions before the next meeting can give the negotiator a leg up on their counterpart.

The Bottom Line

Not every negotiation can result in a deal that all sides will be happy with. Whatever happens, if an agreement can't be reached, be gracious and agree to part as friends.

Under no circumstances should you burn your bridges. You never know when you might have to deal with the same people or company again.