Whether you’re looking for commercial real estate to rent in Melbourne or asking for a pay rise in Manchester, knowing how to negotiate helps you get what you want. The first step in mastering that crucial skill is successful preparation. How do you do it?
Below are five tips to get you started:
1. Know who you’re negotiating with
Knowledge is power as they say, and that applies to negotiations just as much as anything else. Knowing who you’re negotiating with is crucial, and it’s best to learn this before you meet.
Before stepping into the room, learn about the other party’s history, past negotiations, current areas of sensitivity, and what they hope for in the future. The more information, the better.
Negotiations always involve some degree of spontaneity, so the more you know, the easier time you’ll have adapting to emerging conditions. Of course, you’ll need to have your key points down. But, expand beyond that to address any extra concerns that may arise.
2. Prepare multiple offers
If you only have one offer and the other party rejects it, your negotiations can get stuck. To avoid reaching such an impasse, prepare multiple offers.
Even if the other party rejects all your offers, you can ask which one they liked the most and why. From that crucial feedback, you can create offers that better appeal to both of you. In addition, having multiple offers fosters outside-of-the-box thinking and creative solutions.
3. Identify your best alternatives
Regardless of what you’re negotiating, it’s important to show that you can walk away at any moment to take another deal. Also known as your BATNA, or Best Alternative To A Negotiated Agreement, this strategy lets the other party know that they aren’t the only game in town.
Even if you don’t explicitly tell the other party your BATNA, knowing them will help shape how you negotiate. In particular, knowing you have alternatives will help you avoid the sunk cost fallacy (accepting a bad deal simply because you’ve invested a lot of time and effort into it).
4. Practice active listening
You can listen passively and actively. Passive listening is when you hear the words another person says but are far more focused on what your response will be. It makes the other person feel like you don’t really understand them.
Actively listening does the opposite. Instead of preparing what you’ll say next, you listen to what the other person says, paraphrase it in your own words, repeat it back, and ask for confirmation. This lets them know you’re considering their point of view and understand any concerns they have. In addition, it provides valuable feedback and builds up rapport fast.
5. Be aware of anchoring biases
Regardless of whether the first offer in a negotiation is favorable or not, it has a huge influence on every counteroffer that follows. This phenomenon is known as the anchoring bias. It’s important to be aware of this bias so you don’t fall prey to it.
One way to do that is to use it to your advantage by making the first offer. Unfortunately, that’s not always possible. However, it is possible to prepare with a plan B. Tap into your BATNAs, know what’s a dealbreaker for you, and don’t be afraid to pause mid-negotiation to regain your focus.
Negotiating is a crucial skill to master for success in your personal and professional life, and it all starts with a bit of preparation. Keep the above five tips in mind to ensure you’re able to negotiate favorably with whatever life throws at you.
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