In the twelve months that have passed since the global COVID-19 pandemic reached the United States, businesses in every industry have undergone the kind of radical changes that would normally take several years. With social distancing guidelines still impacting consumers around the country, businesses have been forced to transfer many of their previously in-person services to online platforms. Negotiation, one of the most integral components of all business activities, must now be effectively handled online for a business to remain competitive in this new market.
Successful negotiation relies strongly on body language cues given during physical interactions. Compared to virtual interactions, face-to-face interactions result in a higher likelihood of reaching an agreement, higher satisfaction with the interaction, and a higher degree of trust in the other party. Therefore, when negotiating online, it becomes exponentially more important to implement the most effective negotiation tactics to be successful. Fortunately, it is still possible to apply in-person negotiation tips to negotiations that must now be conducted virtually.
If you are concerned about how to negotiate deals in this unfamiliar environment, read on to discover the twelve best tips for negotiation, then contact Shapiro Investigations to schedule negotiation training to bring your business into the future.
1. Be Prepared
A frequently repeated maxim in the sales world states, “90% of negotiation happens before you even sit down to negotiate.” Before you consider any other tips for how to negotiate deals online, your first step should be to complete the appropriate research before the negotiation so you become aware of any crucial information that can have an impact on the potential success of the negotiation. Proper preparation consists of thoroughly reviewing the other party’s business in as many ways as possible.
First, check out their website and read any press releases they have issued, as well as articles written about the business. Learn about the deals they have completed, the terms within these deals, their compliance with these terms, and the overall quality of their relationships with other companies. When determining the specifics of a deal, it can be incredibly useful to compare their offerings and prices with their competitors. Finally, find information about the person you will be negotiating with by reading their biography on the company website and conducting an online search.
2. Understand the Deal Dynamics
Use the information you find in your research to comprehend the dynamics of the deal you will be coordinating. This includes considering the constraints faced by the other party, the alternatives they may have, the amount of money you can expect to spend to close the deal, and which one of you is more motivated to reach an agreement. Examining these components will provide you with an idea concerning who ultimately holds the leverage in the upcoming virtual negotiation, a crucial aspect to reaching the best agreement for both parties.
3. Negotiate With the Real Dealmakers
This may seem like a glaringly obvious tip for how to negotiate deals, but many people unknowingly make the serious mistake of conducting negotiations with the wrong person. When you start virtual negotiations, you must be aware of the authority held by the person you are in communication with so you can avoid wasting your time talking to someone unauthorized to make the necessary decisions or approve concessions. If you begin negotiations with the wrong person and make any concessions during this time, you will be held to these concessions when you reach the real dealmaker, greatly reducing your chances of reaching the optimal outcome for your business.
4. Ask the Right Questions
While preparation is the first step for successful online negotiation, probing for information during the deal is often considered the most crucial. Along with the data gathered during your research, you will be probing for information during the actual online negotiation by asking the other party the right questions. Their answers can significantly inform the rest of the negotiation. Some questions you may ask:
- Is this the best possible deal or pricing you can offer me?
- What benefits will you gain from this deal?
- What is your desired timeframe for this deal?
- What assurances can you provide that your product or service will be successful?
- How do your products or services compare with the competition?
- How can you guarantee that we will avoid unreasonable contracts?
5. Consider Timing
Successful negotiation is a time-consuming process that typically requires multiple meetings and several iterations of a contract before a deal closes. Recent research demonstrates that it can take up to thirteen separate interactions with a potential client before a sale occurs, meaning you must manage your expectations about how long the online negotiation process may take. While moving too quickly to close a deal can result in rushed terms and avoidable concessions, allowing negotiations to prolong unnecessarily can be just as detrimental. The longer negotiations continue, the more likely you are to experience obstacles in successfully closing the deal.
Another timing aspect to keep in mind when considering how to negotiate deals is the time of day you schedule your virtual negotiations. Aim to be either the first person the other party speaks with during the day or the last. Being the first negotiator of the day allows you to create a favorable first impression and set the standard for any following negotiations with other companies. As the final negotiator of the day, your terms will be the latest information they hear, meaning they are most likely to be at the forefront of the dealmaker’s mind during the decision-making process.
6. Draft the First Version of the Contract
One of the fundamental principles for how to negotiate deals of any type is that you should be the one to make the first move by preparing the original version of the proposed contract. This allows you to construct the framework of the deal and focus on the points you consider the most important, as well as providing you with much-needed momentum because you have initiated the process on your terms. When you spend the time and effort on creating the first version of the contract, the other party is more likely to agree to your terms without proposing extensive changes.
Research suggests that negotiations feature a psychological phenomenon referred to as the “anchoring effect.” This priming effect occurs when initial exposure to a specific number, or price in the sales context, results in this number being considered a reference point, impacting subsequent judgments. We are susceptible to this cognitive bias often without even being aware of it. It has been proven to influence decision making in a range of contexts, from purchasing decisions to legal rulings. By drafting the initial contract, you set the course of the negotiations on your conditions and are more likely to reach an outcome that most successfully benefits your business.
7. Define Your Concessions in Advance
Throughout the online negotiation process, it is likely both parties will end up making some type of concession, or “trade-off,” in which one party yields or grants something to another in the hopes of gaining a different advantage. Determining how to negotiate deals with the best results involves managing the timing, frequency, and extent of the concession to influence the other party’s decision making. When implemented effectively, concessions can serve as a formidable negotiation tactic and often are the only means of reaching an acceptable outcome for both parties.
Before you reach the virtual negotiating table, define the concessions you would be willing to make to close the deal. Precisely defining limits for what you consider an acceptable concession in a negotiation ensures you will not be caught off-guard by offers that seem attractive but actually include terms you are unable or unwilling to accept. Concessions you make signal procedural fairness between parties during an online negotiation. Frequently asking for small concessions may suggest aggressive, unfair tactics and can lead to the other party feeling alienated. In contrast, requests for large concessions can cause frustration or anger by slowing the pace of the negotiations.
8. Quote Specific Figures
While conducting a virtual negotiation, always quote specific figures rather than providing an acceptable range. A study from Columbia Business School suggests that negotiating with precise figures indicates to the other party that you have completed thorough research into this number, making it seem more authoritative and appealing. By working with one figure and adjusting it higher or lower when necessary, you remain in control of the terms. Presenting your terms using words like “between” re-frames the online negotiation in a manner that allows the other party to focus on the figure at either end of the range that most benefits them, ultimately restricting your options for counteroffers.
9. Encourage Conversation
Encouraging professional, courteous conversation with the other party is vital when considering how to negotiate deals. Practice active listening on virtual platforms by giving the speaker your full attention, absorbing everything they say, and interpreting the intentions behind the information they share. This allows you to understand the other party’s point of view, priorities, limitations, and ability to be flexible. When composing a response, make it clear that you are ready to resolve any remaining doubts so the other party feels you have truly listened to them and take their concerns seriously.
Effective conversation instills a sense of confidence in the other party concerning your professionalism and dedication to seeking a mutually beneficial outcome. Taking the time to encourage conversation greatly assists you throughout the rest of the online negotiation and sets a positive, collaborative tone that enhances the likelihood of developing a long-term relationship with the other party.
10. Demonstrate Your Value
An integral part of learning how to negotiate deals virtually is ensuring you hold an accurate view of your product’s value and are capable of demonstrating that value to a prospective client. One of the most successful ways to accomplish this is by presenting statistical data concerning past deals to provide hard evidence of the quality of your work. Supplement this data by directing potential clients to explore reviews and testimonials so they can hear candid feedback from your existing clients. This combination of proven results and personal success stories convinces them of your excellent record for results and your exceptional reputation for satisfied clients.
11. Consider Alternatives
Maintaining competitive alternatives between several viable clients rather than locking into an exclusive negotiation with one party benefits you in a few important ways. Conducting simultaneous online negotiations with multiple parties significantly enhances your strategic position and helps you make the most advantageous decisions in your negotiations. When a potential client knows other candidates are interested and ready to make an offer, this enhances the desirability of your product and reaffirms its value. Competition allows you to determine which option offers the best terms and pricing, then use this information to negotiate better terms or pricing with the other parties.
12. Participate in Negotiation Training
Scheduling virtual negotiation training for your team is one of the most profitable steps you can take to improve your business. Comprehensive negotiation training provides your employees with the knowledge, skills, and practice required for successful negotiations of any kind. It teaches them how to identify when a negotiation is taking place, how to listen fully and ask the right questions, create persuasive proposals, and negotiate deals online in a manner that results in the best outcome for your business. Even salespeople confident in their negotiation abilities can benefit from training to discover gaps in their skill set, enhances these crucial skills, and offers practical advice for gracefully navigating unpredictable situations.
Coordinate Expert Negotiation Training Today With Shapiro Negotiations
At Shapiro Negotiations, our strategic negotiation training program implements a methodical approach that enhances both internal and external deals to enhance every aspect of your business. Through our comprehensive approach, we develop the negotiation skills of your employees in terms of how they relate with one another during everyday conversations, as well as how they conduct themselves in formal interactions with existing and potential clients. We also provide tips on what you can do to support your team to ensure successful virtual training.
To learn more about how Shapiro Negotiations can teach you how to negotiate deals online, contact us today by calling (410) 662-4764, emailing us at email@example.com, or filling out the form on our website.