7 Strategies and Tactics of Negotiation You Need to Know

Negotiation is a skill that can help you achieve your goals, whether in business, personal or professional settings. Negotiation involves communicating with another party to reach a mutually beneficial agreement. However, negotiation is not always easy, and it requires some strategies and tactics to succeed. In this article, we will discuss some of the most effective strategies and tactics of negotiation, and how you can apply them in different situations.

Key Takeaways

Prepare well before the negotiation by researching the other party and setting your objectives.

Build rapport and trust with the other party by using active listening and empathy.

Focus on interests rather than positions by using why questions.

Be flexible and creative in finding solutions by using brainstorming.

Communicate effectively by using STAR.

Handle objections and emotions by using LAER.

Close the deal.

Strategy 1: Prepare well

One of the most important strategies of negotiation is to prepare well before the meeting. Preparation involves researching the other party, their interests, needs, goals, strengths and weaknesses. It also involves setting your own objectives, priorities, alternatives and bottom line. By preparing well, you can have a clear idea of what you want to achieve, what you are willing to compromise on, and what you are not willing to accept. Preparation also helps you to anticipate the possible challenges, objections and questions that may arise during the negotiation.

Tactic 1: Use the BATNA technique

BATNA stands for Best Alternative To a Negotiated Agreement. It is a technique that helps you to evaluate your options and determine your walk-away point. Your BATNA is the best outcome you can get if you do not reach an agreement with the other party. For example, if you are negotiating for a salary increase, your BATNA may be to look for another job that pays more. Knowing your BATNA helps you to avoid accepting a deal that is worse than your alternative and gives you more confidence and leverage in the negotiation.

Strategy 2: Build rapport and trust

Another key strategy of negotiation is to build rapport and trust with the other party. Rapport is the feeling of connection and mutual understanding that develops between people. Trust is the belief that the other party is honest, reliable and cooperative. Building rapport and trust can help you to create a positive atmosphere, reduce conflict, increase cooperation and find common ground. Rapport and trust can also make the other party more receptive to your proposals and more willing to make concessions.

Tactic 2: Use active listening and empathy

Active listening and empathy are two skills that can help you to build rapport and trust in a negotiation. Active listening means paying attention to what the other party is saying, asking clarifying questions, summarizing their points and giving feedback. Empathy means putting yourself in their shoes and trying to understand their feelings, perspectives and motivations. By using active listening and empathy, you can show respect, interest and appreciation for the other party, and make them feel heard, understood and valued.

Strategy 3: Focus on interests, not positions

A common mistake in negotiation is to focus on positions, rather than interests. Positions are what people say they want or demand, such as a specific price or deadline. Interests are the underlying reasons why people want something, such as their needs, desires or concerns. Focusing on positions can lead to a win-lose situation, where one party gets what they want at the expense of the other. Focusing on interests can lead to a win-win situation, where both parties get what they need or value.

Tactic 3: Use the WHY technique

The WHY technique is a simple way to uncover the interests behind the positions. It involves asking “why” questions to explore the reasons behind the other party’s demands or preferences. For example, if they ask for a lower price, you can ask “why do you need a lower price?” or “what problem are you trying to solve with a lower price?”. By asking why questions, you can discover their interests, such as saving money, increasing profit or reducing risk. You can then use this information to generate solutions that satisfy both parties’ interests.

Strategy 4: Be flexible and creative

Another effective strategy of negotiation is to be flexible and creative in finding solutions. Flexibility means being open-minded and willing to adapt to changing circumstances or new information. Creativity means thinking outside the box and generating multiple options or alternatives. Being flexible and creative can help you to overcome impasses, break deadlocks and find win-win outcomes.

Tactic 4: Use the brainstorming technique

Brainstorming is a technique that can help you to be flexible and creative in a negotiation. Brainstorming involves generating as many ideas as possible without judging or evaluating them at first. The goal is to come up with a variety of options that can meet both parties’ interests or needs. You can brainstorm by yourself or with the other party, using tools such as mind maps, lists or diagrams. After brainstorming, you can evaluate the ideas based on their feasibility, desirability and acceptability.

Strategy 5: Communicate effectively

Communication is an essential part of any negotiation. Communication involves expressing your ideas clearly, persuasively and respectfully. It also involves listening carefully, understanding accurately and responding appropriately. Effective communication can help you to convey your message, persuade the other party, resolve misunderstandings and build rapport.

Tactic 5: Use the STAR technique

STAR stands for Situation, Task, Action and Result. It is a technique that can help you to communicate effectively in a negotiation. STAR involves describing a specific situation or problem, explaining the task or goal you had, describing the action or solution you took or proposed, and highlighting the result or benefit you achieved or expected. For example, if you are negotiating for a promotion, you can use STAR to demonstrate your achievements and value to the organization. By using STAR, you can provide concrete evidence, examples and facts to support your claims and proposals.

Strategy 6: Handle objections and emotions

One of the challenges of negotiation is to handle objections and emotions that may arise during the process. Objections are the arguments or concerns that the other party may have against your proposals or suggestions. Emotions are the feelings or moods that may affect your or the other party’s behavior or judgment. Handling objections and emotions can help you to overcome resistance, avoid conflict and maintain a positive relationship.

Tactic 6: Use the LAER technique

LAER stands for Listen, Acknowledge, Explore and Respond. It is a technique that can help you to handle objections and emotions in a negotiation. LAER involves listening to the other party’s objection or emotion, acknowledging their point of view or feeling, exploring their reasons or causes, and responding with a solution or reassurance. For example, if they object to your price, you can use LAER to understand their budget constraints, acknowledge their need to save money, explore their value proposition and respond with a discount or a value-added service.

Strategy 7: Close the deal

The final strategy of negotiation is to close the deal. Closing the deal means reaching an agreement that satisfies both parties’ interests and needs. Closing the deal also means confirming the details, clarifying the expectations and documenting the terms. Closing the deal can help you to achieve your objectives, secure your benefits and finalize your relationship.

Tactic 7: Use the ABC technique

ABC stands for Always Be Closing. It is a technique that can help you to close the deal in a negotiation. ABC involves constantly moving towards an agreement by asking for commitments, testing for acceptance and suggesting actions. For example, if you are negotiating for a contract, you can use ABC to ask for their approval on each clause, test for their agreement on the overall terms and suggest signing the contract as soon as possible. By using ABC, you can avoid delays, prevent changes and seal the deal.

Tips

Negotiate with a win-win mindset rather than a win-lose mindset.

Negotiate with people rather than against them.

Negotiate with facts rather than opinions.

Negotiate with options rather than demands.

Negotiate with confidence rather than fear.

Strategies and Tactics of Negotiation: How They Affect Global Demand

Negotiation is a vital skill in any business, especially in a globalized market where different cultures, values and interests may clash. Negotiation can help parties reach mutually beneficial agreements, resolve conflicts, build trust and foster long-term relationships. However, negotiation is not a one-size-fits-all approach. Different strategies and tactics may be more or less effective depending on the situation, the goals and the personalities of the negotiators.

In this blog post, we will explore some of the common negotiation strategies and tactics, and how they can influence the global demand for products or services in various industries.

What are Negotiation Strategies and Tactics?

Negotiation strategies are the overall plans or frameworks that guide the negotiators in achieving their objectives. They define the style, tone and direction of the negotiation process. Some of the common negotiation strategies are:

Collaborative or integrative strategy: This strategy aims to create value for both parties by finding win-win solutions that satisfy their interests and needs. It involves sharing information, building rapport, generating options and using objective criteria to evaluate them. This strategy is often used when the parties have a long-term relationship, a complex problem or a common goal.
Competitive or distributive strategy: This strategy aims to claim value for one party by maximizing their gains and minimizing their losses. It involves concealing information, making demands, using threats or pressure and exploiting weaknesses. This strategy is often used when the parties have a short-term relationship, a simple problem or an opposing goal.
Compromising or accommodating strategy: This strategy aims to reach a quick agreement by making concessions or sacrifices. It involves splitting the difference, accepting less than desired or giving in to avoid conflict. This strategy is often used when the parties have a moderate relationship, a moderate problem or a moderate goal.

Negotiation tactics are the specific actions or techniques that negotiators use to implement their strategies. They can be verbal or non-verbal, direct or indirect, cooperative or competitive. Some of the common negotiation tactics are:

Foot-in-the-door technique: This tactic involves making a small request that is likely to be accepted, followed by a larger request that is more likely to be accepted after the initial compliance.
Door-in-the-face technique: This tactic involves making a large request that is likely to be rejected, followed by a smaller request that is more likely to be accepted after the initial refusal.
Take-it-or-leave-it method: This tactic involves presenting a final offer that is non-negotiable and giving an ultimatum to accept it or walk away from the deal.
Leveraging the competition: This tactic involves creating or implying a sense of scarcity, urgency or exclusivity by mentioning other potential buyers or sellers who are interested in the deal.
Bogey: This tactic involves pretending that an issue is more important than it actually is, in order to trade it off for something else later.

How do Negotiation Strategies and Tactics Affect Global Demand?

Negotiation strategies and tactics can have a significant impact on the global demand for products or services in various industries. Depending on the context, they can either increase or decrease the demand by influencing factors such as price, quality, quantity, delivery, reputation, trust and loyalty.

For example:

A collaborative strategy can increase the global demand by creating value-added solutions that meet the needs and preferences of different markets and customers. It can also enhance the reputation and trust of the parties involved, leading to repeat business and referrals.

A competitive strategy can decrease the global demand by creating win-lose outcomes that leave one party dissatisfied or resentful. It can also damage the reputation and trust of the parties involved, leading to disputes, litigation or boycotts.

A compromising strategy can have mixed effects on the global demand depending on the situation. It can either increase the demand by reaching a quick agreement that satisfies both parties to some extent or decrease the demand by reaching a suboptimal agreement that leaves both parties unhappy.

Similarly:

A foot-in-the-door technique can increase the global demand by establishing a positive relationship with the other party and gradually increasing their commitment and satisfaction.

A door-in-the-face technique can decrease the global demand by alienating the other party and reducing their willingness to cooperate or compromise.

A take-it-or-leave-it method can have mixed effects on the global demand depending on the situation. It can either increase the demand by creating a sense of urgency or exclusivity that motivates the other party to accept the offer or decrease the demand by creating a sense of pressure or resentment that drives the other party away from the deal.

A leveraging the competition tactic can increase the global demand by creating a sense of scarcity or opportunity that stimulates the other party’s interest or desire.

A bogey tactic can decrease the global demand by creating a sense of deception or manipulation that undermines the other party’s trust or confidence.

Negotiation is a complex and dynamic process that requires careful planning, preparation and execution. Negotiators need to choose the appropriate strategies and tactics that suit their objectives, situations and counterparts. Negotiation strategies and tactics can have a significant impact on the global demand for products or services in various industries, either positively or negatively. Therefore, negotiators need to be aware of the potential consequences of their actions and adjust them accordingly to achieve optimal results.

Frequently Asked Questions

Q: What is negotiation?
A: Negotiation is a process of communication between two or more parties who have different interests or goals, and who seek to reach a mutually beneficial agreement.

Q: What are some examples of negotiation situations?
A: Negotiation situations can occur in various contexts, such as buying or selling a product or service, requesting a raise or promotion, resolving a conflict or dispute, making a decision or plan, etc.

Q: What are some benefits of negotiation?
A: Negotiation can have many benefits, such as saving money or time, increasing satisfaction or happiness, improving relationships or trust, enhancing reputation or credibility, etc.

Q: What are some skills required for negotiation?
A: Negotiation requires various skills, such as research and analysis, communication and persuasion, listening and empathy, problem-solving and creativity, flexibility and adaptability, etc.

Q: What are some common mistakes in negotiation?
A: Some common mistakes in negotiation are not preparing well enough, focusing on positions rather than interests, being too rigid or too eager, not communicating clearly or respectfully, not handling objections or emotions well, not closing the deal properly, etc.

References:

https://deepblue.lib.umich.edu/bitstream/2027.42/26263/1/0000344.pdf

https://web.archive.org/web/20070926065715/http://home.medewerker.uva.nl/g.a.vankleef/bestanden/Van%20Kleef%20et%20al.%20(2004a%20JPSP).pdf

https://www.cfa.harvard.edu/cfawis/bowles.pdf