Negotiation, a fundamental aspect of business interactions, demands skill and strategic insight. In business, negotiation tactics are used everywhere from closing multi-million dollar contracts and settling legal disputes all the way to negotiating a pay raise with your manager.
In this guide, we’ll provide you with a quick list of negotiation tactics both basic and advanced to help you succeed in business. If you’re new to negotiation, you should check out the introduction to legal negotiation for a quick primer!
Basic Negotiation Tactics
Negotiation is an art form – one that requires finesse, strategy, and a keen understanding of human behavior. The ability to effectively prepare, establish rapport with opposing parties, listen actively, and emphasise compliance with relevant laws sets apart those who excel in this field from those who falter.
Negotiation can be competitive or cooperative, and the tactics below can help you increase your chances of gaining favourable outcomes in both.
1. Preparation is Key
- Conduct extensive research about the opposing party.
- Understand the framework, industry standards, and precedents related to the negotiation.
- Anticipating possible objections and preparing well-founded counterarguments is also a part of negotiation fundamentals.
- Do as much homework on your counterparty as possible. This will give you a clue as to why they’ll want what they want (interests).
- You can also check out our negotiation preparation list.
2. Building Rapport and Trust
- Establish a professional and respectful rapport with the other party.
- Find something about them that you can appreciate and find commonalities
- Demonstrate integrity and authenticity to foster trust, which can facilitate smoother agreements
- From your preparation, you can be the first to share information to get them to reciprocate and share more about what they want
- You can also read more about building rapport here.
- When you are soft and supportive of the person and hard on the problem – at the same time – it creates cognitive dissonance, which can help in your negotiations.
3. Know When to Focus on Interests and Not Positions
- Positions focus on ‘What I want’ while interests focus on ‘Why I want that position’
- Focusing on positions leads to bargaining, where it goes to ‘what I can win so he gets less’ while focusing on interests can find value to both sides and creates more flexible options.
- While focusing on interests can make the pie bigger for all parties, it requires a level of rapport and trust first. If you’re not careful about when you start focusing on interests instead of positions, you could get taken advantage of.
4. Active Listening
- Practice active listening to comprehend the other party’s concerns and priorities.
- Respond thoughtfully to demonstrate understanding and build rapport.
- Be aware of your own cognitive biases and take time to review what they’ve been saying. You might have missed key information that they are presenting.
- Cognitive biases include anchoring, gain and loss framing, and more
5. Emphasize Legal Compliance
- Ensure all proposed agreements adhere to legal regulations and industry standards.
- Highlight compliance as a cornerstone of the negotiation, emphasizing the importance of legal integrity. This is important when signing off on the deal or contract.
Advanced Negotiation Tactics
Imagine that you’re surrounded by high-powered executives and sharp-witted lawyers engaged in a tense legal negotiation that could make or break your company’s future. How can you ensure that you have tried your best and emerge as the victor in this high-stakes game?
Remember that legal negotiations are not just about compromise; they are opportunities to assert your value proposition while staying within legal boundaries.
Here is an advanced list of negotiation tactics designed specifically for business settings.
1. Creating Leverage
It is essential to identify your strengths and leverage them during the process. Whether it’s offering unique services, high-quality products, or having a market reputation for excellence, highlighting these advantages can give you an edge at the negotiating table. By researching and citing relevant cases that support your position or argument, you can provide solid evidence to back up your claims.
Legal precedents carry weight and can be persuasive when presented in a negotiation setting. They demonstrate your knowledge of applicable laws and add credibility and legitimacy to your arguments.
2. Use of BATNA (Best Alternative to a Negotiated Agreement)
It is crucial to have a strong BATNA (Best Alternative to a Negotiated Agreement) as a safety net. This refers to an alternative option or plan you can fall back on if the negotiations do not result in a satisfactory agreement. It provides you with leverage during the process.
By asserting your position without appearing aggressive, you can maintain a constructive and collaborative atmosphere, increasing the likelihood of reaching a mutually beneficial outcome.
You can read more about this in our post about limit prices and BATNAs.
3. Keep the ZOPA in Mind (Zone of Possible Agreement)
The Zone of Possible Agreement (ZOPA) is the range within which you and your counterparty can find common ground during negotiations. For sales negotiations or bargaining, the ZOPA exists between the buyer’s highest willingness to pay and the seller’s lowest acceptable price. If an overlap exists between these points, a mutually beneficial agreement can be reached.
Understanding and identifying the ZOPA can help you focus on realistic terms and avoid impasses. If there is no overlap, reaching an agreement may be impossible without adjusting expectations or terms.
You can find out more about this in our post about ZOPA.
3. Employing Silence as a Tactic
Silence can prove to be an incredibly effective weapon in negotiation. By strategically maintaining silence, one can prompt the other party to divulge additional information or potentially make further concessions.
The power lies in the discomfort that silence creates, as it compels individuals to fill the void with their own words. This often leads to unexpected revelations and insights, providing a significant advantage to those skilled at this technique.
4. Conditional Offers and Contingencies
When negotiating, you can present conditional offers that link concessions to specific actions or reciprocations from the other party. This approach helps establish a sense of fairness and ensures that both sides contribute to the agreement. Additionally, utilising contingencies can be beneficial to safeguard against legal issues that affect negotiations.
Ethical Considerations in Legal Negotiations
1. Transparency and Honesty
- Maintain transparency throughout the process.
- Avoid misleading statements or misrepresentations, which could lead to legal consequences.
2. Avoiding Unethical Pressure Tactics
- Refrain from undue pressure tactics or coercion, which can make agreements void.
- Uphold ethical standards, even when negotiations become intense or competitive.
Negotiation tactics in business and law are multifaceted, requiring a nuanced understanding of principles and human psychology. By integrating legal compliance, strategic preparation, and ethical considerations, negotiators can navigate the complexities of business negotiations with finesse and integrity.
At The Negotiation Academy, our courses teach a list of negotiation tactics and instill a deep understanding of the nuances involved. Join our programs to master the art of negotiation while upholding legal and ethical standards.
Check out our online courses and customized live training and embark on your journey to becoming a skilled negotiator!
