A Classic Negotiation Framework

Having a strong groundwork for negotiations can allow you to be more confident during discussions and lead to better outcomes. When you are required to negotiate often for your business and your clients, it’s essential that you have a systematic approach to negotiations that is flexible and dependable. No matter how negotiations play out, it’s important that you’re prepared to find a beneficial outcome or determine when an agreement isn’t possible. A successful company requires strong and reliable negotiations to increase profits and opportunities.

Illustration by Storyset

Importance of Negotiation for Business and Clients

Negotiation is a skill that takes time and effort, but the returns create great benefits. Many professionals need effective negotiation daily to create value. Here are some benefits to improving your skills in negotiation, for you, your business, and your clients:

  • The creation of mutually beneficial deals
  • Less frustration in determining beneficial outcomes
  • Improving business relationships, even creating permanent partners
  • Increase personal confidence levels
  • Closing deals more quickly and with higher-valued outcomes
  • Improve your company’s bottom line
  • Better collaboration both externally and within the company

The better grasp you have on negotiation, the more improvements and value you’ll see from negotiations.

Integrative Negotiation

Negotiation creates the most effective outcome when both parties collaborate to reach their goals. Integrative bargaining is also called cooperative bargaining, interest-based bargaining, or win-win negotiations. For one party to achieve its goals, the other party doesn’t have to lose.

A strict mindset of win-lose negotiations is harmful to many negotiations. Not only does it sour the negotiations and a potential business relationship, but it may affect future negotiations. If you or your business gain the reputation of having to “win” negotiations at the expense of the other party, you will see fewer opportunities as others are unwilling to negotiate with you.

Win-lose negotiations, also known as distributive negotiations, are sometimes the only option in negotiations when no value can be created. It also includes strategies that can be useful once you’ve reached the end of value creation and need to divide up that value between parties. Ultimately, if you want to establish good relationships between parties, integrative negotiations are more useful. Distributive bargaining is often a harmful first step or mindset. It assumes no value can be created through collaboration, and you must take as much of a portion as possible.

Integrative bargaining instead pushes for discussion and understanding. Collaboration toward an alternate solution that benefits both parties will likely create value, lead to better business relationships, and open future opportunities with this party and others. When you understand the steps of integrative negotiation, you’re able to be prepared for a number of negotiation outcomes and eventualities. By practicing working toward a win-win outcome, you’re more likely to find it  — and create more value and better margins.

Shapiro Negotiations Institute uses professional negotiation training to provide a systematic approach to integrative negotiations. The more practice and preparation negotiators have, the better outcomes they will see. Professional negotiation training can enhance preparation abilities and provide exceptional opportunities to practice and improve negotiation skills. By learning the basics of classic negotiation and how they can improve integrative negotiation, you can begin to improve your negotiation efforts.

The Classic Negotiation Steps

Every negotiation is a unique process, and your ideal outcome may require specific preparations. Negotiations can take several forms, but these steps are useful no matter the style of negotiation you encounter.

  1. Prepare

Preparation for negotiation takes time. You, as the negotiator, must effectively research the other party and determine what outcomes could benefit you both. As this is the only negotiation stage where you have complete control, it’s important to put the appropriate time into it to ensure a strong standing for beginning negotiations.

Beginning negotiations unprepared will be catastrophic for your goals. Not only will you appear unprofessional, but the other party may rope you into a bad deal. Preparation means understanding the needs and goals of the other party, how they align with yours, and practicing the likely events of negotiation. Some questions to consider include the following:

  • Who are all the parties in negotiations?
  • What data and information will help me in negotiations?
  • What is the best possible result of negotiations? What is the best alternative to a negotiated agreement (BATNA)?
  • Where are the limitations of the other party? Where are mine?
  • What are the other party’s positions?
  • What does the other party want to gain through negotiations?
  • What is a mutually beneficial outcome?
  • What professional relationship should we build through negotiations?

These questions are a good starting point to prepare for negotiations, but every negotiation will come with its own challenges. Your goal is to be fully prepared for all potential aspects of negotiation and have full knowledge of how it may play out. Determine if you and the other party may reach a lasting business partnership after negotiations or if you’re likely to only collaborate for this negotiation. This will alter the strategies you use.

Above all, work to create value through integrative bargaining and find a solution that benefits both parties. Working to get the most out of negotiations at the expense of the other party will sour business relationships and even future negotiations. Use your preparation time to understand the other party and how you can both benefit.

  1. Probe and Listen

During this stage, you should be reassessing the information you gathered in preparation. Though you may feel confident you understand the other party’s goals, listen to what they say they want. Use that to correct assumptions or clarify things you were unable to discover in preparation. Ask probing questions to check your information and listen carefully to the other party’s answers. The best negotiators listen.

At the beginning of negotiations, both parties should share openly what they wish to gain. Then, you can begin to see if a beneficial solution is possible. When there is an open exchange of information, these solutions are easier to find.

During the negotiations start, you should also begin to build trust and a conversational rapport between you and the other party. This will make both negotiators feel more comfortable to openly exchange sensitive information with the other. Your preparation should include an understanding of the culture and values of your negotiating partner.

In building rapport, several things can be learned about the other party:

  • Are they a competent negotiator and business owner?
  • How trustworthy and dependable would they be as a business partner?
  • Would you work well with the other party?
  • Do you each have similar business interests?
  • Would you each benefit more from a short-term or long-term partnership?

This isn’t a step you want to rush through. Shapiro Negotiations Institute believes in learning mindful listening and how to effectively probe to get to the heart of the party’s interests. This allows you to create better deals and relationships. The better a relationship you create during this stage of negotiations, the more likely you’ll be heard, and your ideas will be given merit.

During this stage, you may determine that the best possible outcome is no longer viable. If this is the case, switch over to your BATNA or make other necessary adjustments. This stage may also present an opportunity to create more value than you anticipated in your best possible outcome. It may be a good time to propose your best possible outcome, with added value through a joint agenda.

  1. Propose

This is the final step in negotiations, where real solutions could be reached. Skilled negotiators are aware of the most effective time to make offers and enact satisfactory outcomes. Once you propose a mutually beneficial solution, there will likely be some back-and-forth between you and the other party. Don’t feel discouraged if your best solution isn’t accepted. This discussion is another time when value creation is likely, and even better outcomes may be reached.

The bargaining part of the proposal stage requires you to understand what concessions you’ll allow yourself to make and the concessions the other party will and won’t accept. Understanding these limits is necessary for fruitful negotiations and to bring a solution that’s satisfactory to all parties. You want to negotiate in a way that maximizes the benefits to you and your business while enabling the other party to leave negotiations satisfied and with a valuable deal.

Once you propose a solution, don’t assume you’re trapped in this negotiation stage. If discussions begin to fail and there’s no forward progress, it may be a good idea to step back a stage and ask probing questions. This will help both parties reassess each of their wants and limits and establish better potential solutions.

Once you reach an agreement in negotiations, it’s a good time to write a full summary that includes the interests of both parties. That way, both sides will be held to follow through on their promises. Determine further steps and if a follow-up meeting will help to ensure the agreement is followed and strengthen your working relationship. Even in a negotiation where discussions fell through, be sure to be appreciative of the other party’s willingness to negotiate.

How Negotiation Training Benefits Your Business Professionals

Negotiation training improves the skills of business professionals more effectively. Negotiation can help you build better profits, close deals, and open more doors for your business and clients. Shapiro Negotiations Institute offers professional training that helps to increase collaboration and discussion confidence. These services can help business leaders and representatives who negotiate for their company or their clients.

Improving negotiation abilities takes practice, and we’ve determined effective and holistic ways to improve these abilities, such as with keynote speeches, consulting, and direct training. Contact Shapiro Negotiations Institute today to strengthen your understanding of effective negotiation.

Scroll to Top