To perform any business transaction, negotiation is going to be an absolute necessity. Sometimes, these negotiations will shape formal affairs with clearly defined objectives. In contrast, other business negotiations are an ongoing process—instead, they evolve in whatever way best suits the parties’ business goals.
If you are looking to succeed as a business professional (regardless of whether you’re negotiating on behalf of a small business or a massive corporation), then strong negotiation skills will be essential. Through successful business negotiations, the participants can begin generating more revenue, as well as better profits. Conversely, if you can’t negotiate efficiently and confidently, these objectives will be severely stunted.
Further, not all negotiation scenarios should be approached in the same way, with the same set of skills. For instance, the way you should handle negotiating with a business-to-customer (B2C) company isn’t perfectly in line with the way you should approach a negotiation with a business-to-business (B2B) company.
No matter the type of business you’re involved in, and no matter the kind of company you are currently negotiating with, negotiation is foundational to doing business. However, negotiation is an art, and it takes practice and strategy to master. That’s why we have compiled 10 strategies to help you identify and achieve your business goals via the art of negotiation.
- Keep Your Business Goals in Mind
If you don’t have business goals, then what’s the purpose of negotiating in the first place? These goals can be either concretely defined or otherwise, but your goals (as well as the goals of the other party) should be leading you through the negotiation, giving you a sense of the agreement you’re working toward.
However, it can be easy to lose sight of the bigger picture in the heat of the moment. Therefore, you must keep your business goals (long-term or short-term) in mind throughout your interactions with the other party. Otherwise, you may end up guiding the conversation in a direction that doesn’t benefit your goals once a compromise is reached.
- Adapt Strategies to Interpersonal and Environmental Circumstances
Every business negotiation is different. This isn’t only because the topic of negotiation is going to change—the interpersonal and environmental context will be different from negotiation to negotiation.
Adaptation is one of the most critical components of mastering negotiation. IF you’re unable to communicate in a way that’s effective for the specific situation, then your ability to reach a favorable outcome is going to quickly fall flat.
Before beginning any negotiation, make sure to examine who you’ll be communicating with, as well as the relationship that you currently hold (or don’t hold) with them. For instance, if you’re negotiating with someone you’ve been in business with for the past decade, you’ll likely approach negotiations differently than if you’re speaking with a party you’ve just met. In a similar vein, how contentious has your relationship been with the particular party in the past? This could also impact your approach.
Also, be sure to account for any environmental or situational circumstances of the negotiation, as well.
- Show Your Openness to the Negotiation Process and the Needs of the Other Party
Negotiation is a two-way street. Ultimately, your goal is to reach an agreement that benefits both yourself and the other party—and, in an ideal outcome, benefits you just a bit more.
If you focus your tactics on your needs alone while dismissing the other party’s, this will only lead to conflict and poor communication. Instead, make sure that your negotiation partner understands that you care about their goals and objectives, and they will be far more willing to account for your needs, in turn. This will also lead to a far smoother and more efficient negotiation process, where both parties can remain civil and goal-oriented.
- Set Business Negotiation Objectives
As we’ve already mentioned, you need to have goals in mind if you’re hoping to negotiate successfully. Similarly, you will also need to keep track of your business objectives throughout the conversation.
In this particular negotiation session, what are you hoping to gain or accomplish by the end? Then, how will these objectives allow you to reach your goals in the long run?
These objectives should be clearly defined before you even begin negotiating. According to Craig Berman in the Small Business Chronicle, “entering a negotiation with specific goals, as well as a clear understanding of your next best alternative, puts you in a stronger position.”
This is another crucial way for you to keep the exchange on track and headed in a direction that will benefit you and your business goals—both long-term and short-term. Don’t enter negotiation blindly without clear objectives.
- Prepare, Prepare, Prepare
If it isn’t already clear from our previous advice, successful negotiation depends on preparation. Although the level and type of preparation you perform can vary depending upon the context, there are no instances of business negotiation where you won’t be impaired by lack of preparation.
Before you begin to negotiate, you should have already determined your goals and objectives to help guide the conversation. You should also have tried to understand the other parties’ own goals and objectives, as this can dramatically impact the compromises you propose. Finally, make sure to learn whatever information you can about your negotiation partner—you could even get in contact with them before the start of negotiations if this is feasible for you.
Essentially, do your research, and make sure to have a game plan in mind.
- Listen Carefully
You’re not going to be able to compromise or reason with your negotiation partner if you’re not listening to them—and not just any listening will do. Therefore, during negotiation, you must practice active listening rather than listening passively to the opposite party.
Listen to what your partner is saying, but also make sure you understand the implications of their words and how what they’re saying could impact your approach. Listening carefully will allow you to refine your understanding of your partner’s goals and objectives, providing you with more opportunities to propose solutions—solutions that they would be in support of, as they account for both parties’ needs.
- Do Not Get Distracted
You need to listen carefully to successfully negotiate in the business world—this is precisely why you should be careful not to get distracted and lose focus on the conversation.
Getting distracted during a negotiation can take several forms. For instance, maybe you inadvertently led the conversation off-topic, away from the objectives of you and your partner. Getting distracted could also involve poor or passive listening, as was mentioned previously. Ultimately, this will likely result in the conversation being led in a less productive direction—it can also result in miscommunication between you are your partner.
- Look for Business Negotiation Alternatives
It would be unreasonable to expect all negotiations to succeed. Sometimes, you will be unable to reach an agreement with your partner—this doesn’t mean that you should settle on an unfair outcome or compromise your values or ethics. Occasionally, it will be in your best interest to step away.
When this sort of scenario occurs, you’ll need to have alternatives at the ready. So, before any critical negotiation, make sure to put some thought into this topic. Hypothetically, try envisioning the position you’d find yourself in if your negotiation and conflict-resolution techniques were to fail. What actions or steps would you take next? Then, prepare for the possibility of this outcome.
- Consider the Long-Term Business Goals
Even if they seem to be in the far future, it’s still essential to have a grasp on your long-term business goals to negotiate at your peak. For instance, when you formulate your objectives or what you’d like to receive from the conversation, understanding your long-term goals can help guide you in the right direction.
In business, it isn’t already a good idea to live “in the moment.” At the very least, you shouldn’t be living solely in the moment. Instead, keep an eye on the future at all times, and take this perspective into any business negotiations you participate in.
- Be Fair
The ability to compromise is one of the core tenets of any successful negotiation. However, if you are looking to be fair during negotiations, you’ll also need to keep the goals and objectives of your partner in mind—rather than just your own. If you focus solely on your own objectives, you are more likely to propose an unfair deal to the other party.
Of course, this doesn’t mean that you should allow your negotiation partner to walk all over you or dominate the conversation; it simply means that you should respect their needs and wishes, as well as your own.
B2B Versus B2C Negotiations: Is There a Difference?
At their core, negotiations with B2B businesses should be approached using the same fundamentals as B2C negotiations. However, there is a difference in environment and context, and adaptation is fundamental to any negotiation, regardless of the type of business you’re engaging with.
For example, you may need to account for the short cycle marketing that is more typical of B2C businesses versus the longer-term strategy that B2B companies will often focus on.
Grow As a Business and As a Professional With SNI
Returning to the heart of the matter, remember that business negotiations are fundamentally key to growing a business, as well as growing as a professional. Negotiation isn’t simply an innate trait, which some individuals possess, but not others—instead, business negotiation is a learned skill, and it takes practice to develop and refine. One of the best ways to quickly improve your negotiation abilities is through receiving training from Shapiro Negotiations.
We provide professionals, across industries, with expert negotiation training. If you’re interested in learning more, you can read more about us on our website. Or, you contact Shapiro Negotiations via our contact form.