Top 10 Most Important Negotiation Skills You Need To Know

By Amanda Covaleski - May. 6, 2021
Skills Based Articles

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Negotiation skills are an essential tool, for both your professional and personal lives. We negotiate every day, from compromising with roommates at home to hammering out the details of a large contract at work.

Experts define negotiation as a dialogue meant to create a beneficial agreement between people or groups. There doesn’t have to be conflict between the negotiating groups before the negotiation, but sometimes that is the case. Regardless, the key here is that you want to create a positive outcome for both groups, even if it means compromising a little.

Negotiations take many forms, but they tend to function the same way at the end of the day. We’ll go over some key negotiation skills and how to improve them so you can be the best negotiator out there.

What Are Negotiation Skills?

Negotiation is one of those things that require a lot of other smaller skills to be good at. Let’s look at some of the basic skills that make up effective negotiation.

  1. Communication. Communication skills are necessary no matter what you’re doing, but they’re especially important when negotiating.

    These skills range from being able to get your point across clearly and effectively to being able to read nonverbal cues and understand how your partner is thinking. Being good at communicating is the first step to being a good negotiator.

  2. Organization. There’s a lot going on during a negotiation. With all the data, goals, and relationships you need to manage in a negotiation you need to make sure you’re staying organized and have the information you need when you need it. Plan things out and give yourself the best chance to succeed by being organized.

  3. Persuasion. At the end of the day, you want your desired outcome in a negotiation. Being able to speak persuasively or give a persuasive offer will help you reach your ultimate goal.

  4. Active listening. It can be tempting to tune out what people are saying during a discussion and instead prepare what you’ll say next, but you’ll actually do better if you listen attentively to others.

    You’ll have a chance to really understand what the other person is saying, allowing you to sidestep any potential conflicts because of misunderstandings.

  5. Curiosity. Asking questions is a great way of checking your understanding and pushing your counterpart for more information. Get in the habit of asking lots of relevant questions, especially those that don’t have simple “yes” or “no” answers.

    Other negotiation skills are more specific to actual negotiation tactics. Experts have come up with a lot of professional jargon to describe negotiation skills, but we’ll break it down for you.

  6. Know your BATNA. Before walking into a negotiation, you have to be familiar with your best alternative to a negotiated agreement, or BATNA.

    When negotiating, your only other option besides coming to an agreement is to walk away. If you develop a good alternative strategy for walking away from a deal, you’ll have a better bargaining chip since your counterpart probably isn’t as willing to drop the negotiation.

  7. Build a working relationship. Negotiations are just discussions between people and the better you can know the people on the other side of the deal, the more successful you’ll be.

    Research shows that taking the time to get to know your fellow negotiators, even just for 10 minutes, can improve your working relationship and ability to collaborate and compromise.

  8. Think big picture. Often negotiations can stall because of one sticking point. Instead of getting in the weeds about one thing like price, think about the big picture and other places where you could push for a tradeoff.

    Points that are lower priority for you but higher priority for the other party are good places to make concessions and force compromises on your high priority points.

  9. Pay attention to anchoring bias. Anchoring bias is the perception negotiators get when they rely on the first piece of information they get, usually the first price named.

    Whether that number is arbitrary or not, people get attached to it and it can influence their decisions and how they negotiate. Avoid being caught off-guard and be the first one to name a number, or be extra aware of the potential for anchoring bias.

  10. Use MESOs. Multiple equivalent simultaneous offers (MESOs) is just a tactic to make your counterpart think of the bigger picture. Instead of battling through a contract or deal one point at a time, offering multiple solutions can prevent a standstill and can help both parties come up with creative compromises.

  11. Set goals. Sometimes negotiations get stalled when people get into the details of implementation. Instead of hammering out every last detail before making a deal, contingent contracts and goal-setting can help both groups avoid an impasse and create an outline for the future.

    Try suggesting certain goals or milestones you and your counterpart want to hit within certain deadlines to keep everyone accountable.

Types of Negotiation

There are a few types of negotiation and knowing which kind you’re dealing with can be a great asset. You can frame your approach and your tactics once you know what kind of discussion you’re going into. Here are a few of the most common types of negotiations.

  • Distributive. This is all about resources. In this scenario, there are a limited amount of resources (like a service), so everyone assumes that if they get less of that resource, the others get more.

    People will negotiate to get the most that they can as opposed to negotiating what they actually need. These negotiations are common and come up often when pricing for a service is being decided.

  • Integrative. If you’re looking for a win-win situation, you’re looking for an integrative negotiation. Here both parties are satisfied and feel that all their demands have been met, but the price for that is longer discussion time.

  • Negotiating with management. Management negotiations can be stressful because of the inherent power dynamic, but they are some of the most important compromises you can make.

    When it comes to discussing things like your job benefits or salary, be as clear as you can and take it as an opportunity to ensure your satisfaction with your job or show off your communication skills to your boss.

  • Negotiating with coworkers. Negotiating with your coworkers is more of an everyday task than a full-on negotiation, but it’s important to be an effective communicator and good collaborator. This can help your team work more efficiently and build better rapport among coworkers.

  • Negotiating with vendors. Holding negotiations with vendors or any external partners is an important process since you not only represent yourself and your department, but also your whole company. Be prepared to use all of your skills to make sure these high-pressure situations go smoothly and practice beforehand with smaller negotiations.

Let’s take a closer look at the final three types of negotiation.

Negotiating With Management

Regardless of your occupation or employer, we all need to negotiate with management at some point in our careers.

You may need to negotiate with management about:

There’s an inherent power dynamic at work when you’re negotiating with a superior. The most important point is to understand what the manager values most and to present your case as beneficial for them.

For most managers, that means speaking directly to the bottom line — how are they going to get more value out of you if they give you what you want?

Negotiating With Coworkers

Not all negotiations in the workplace are about dollars and cents. Sometimes, it’s just about figuring out how a team is going to complete a project.

You may need to negotiate with your coworkers about:

  • Who will complete what tasks

  • What the deadlines are for each task/the project as a whole

  • Interpersonal conflicts

  • Fair distribution of work

  • A standard of quality

Negotiating With Businesses and Clients

Not every role needs to negotiate with folks outside of the company, but those that do need to be excellent negotiators. Your actions represent the whole company, after all.

You may need to negotiate with third-parties about:

  • Price

  • Terms and conditions

  • Subscription services

  • Supply

  • Scheduling

  • Legal settlements

Tips to Improve Your Negotiation Skills

  1. Practice. The best thing you can do is practice negotiating. Not only will your communication, listening, and other negotiation skills improve but you’ll also be better equipped for the sometimes stressful discussion environment.

    You can start small, just working on improving your negotiation skills with coworkers and management until you feel comfortable enough to tackle external negotiations.

  2. Be aware of your limitations. You can only improve upon areas that you identify as weaknesses. Without knowing your strengths and where you need improvement, you won’t be able to dedicate time to getting better at those skills. Though it can be hard to admit faults, it will make you a much more effective negotiator in the end.

  3. Remove yourself from the equation. Not taking “no” personally is a great way you can improve your skills. Once you realize that the other party isn’t rejecting you as a person, but rather the proposals you and your company provide, the easier it will be for you to focus on improving your negotiation skills.

  4. Keep your goal in mind. The outcome you need should always be your north star. Keeping it in mind will help you stay focused and work toward that goal instead of getting distracted by smaller issues in the negotiation. Staying focused and delivering the result expected of you will prove your great skills as a negotiator.

How to Prepare for a Negotiation

Negotiations boil down to a six-step process. Knowing this and how your goals line up with each step is a great way to prepare for negotiating, along with practicing. Here’s a look at the steps of negotiation.

  1. Preparation. This happens before you even step foot in the negotiation room. Make sure you have your goals clear, a good understanding of the situation, and all the data you need. Though it can be time-consuming, being well-prepared is one of the best things you can do to get a good outcome from your negotiation.

  2. Presentation. Here both parties present what their objectives are, what they need from the final agreement, and what they’re willing to concede.

    You can’t reveal everything here (like the bare minimum that you’ll settle for), but you need to give a comprehensive overview of what you want to achieve. Your counterpart will provide the same and you need to listen carefully to properly address what’s on the table.

  3. Clarification. This step is an opportunity for both parties to make sure they understand the goals and terms of the negotiation, before actually discussing the details. Here you can find common ground and places to begin the actual discussion.

  4. Discussion. Now you’ll actually get to the negotiation. You can hammer out details and try to come to compromises that work for both groups. This won’t be a quick step, but it’s the core of the negotiation.

  5. Agreement. Once everything is squared away and agreed upon, there’s usually a formal contract that’s created to hold everyone to their promises. An agreement can’t happen unless everything has been properly discussed, so make sure you’re ready to move to this step before proposing an agreement.

  6. Implementation. After the negotiation comes the implementation of whatever was decided. Like mentioned earlier, contingent contracts and goal-setting are great ways to make sure everyone is upholding their ends of the bargain.

How to Use Your Negotiation Skills

Let’s turn to the actual process of negotiation. Here’s what that looks like:

  • Set clear goals. From the start, you should know what the best possible conclusion looks like and what the worst outcome you’d be willing to accept looks like. The end result will fall somewhere in the middle, but it’s essential to have these goalposts clearly defined before kicking things off.

  • Choose a strategy. A big part of strategizing for negotiations is knowing what motivates the opposing party. If you’re negotiating your salary with your boss, it’s important to know what exactly she values in an employee. And if you’re negotiating prices with a client, it’s critical that you take their needs into consideration.

  • Don’t be overeager. It’s natural in any negotiation for there to be one eager party and one that’s more hesitant. From the get-go, the reluctant party has more leverage — they can take the deal or leave it and not be too fussed. It’s incumbent on the eager party to make concessions in order to please them. With that in mind…

  • Pay attention to your body language. Don’t lean forward and tense up; sit back, plant your feet firmly on the floor, and round your shoulders. Don’t stop there, though. Other cues, like the tone and volume of your voice, can communicate reluctance. Reluctant parties are usually quieter, slower-speaking, and calmer.

Negotiating in the Workplace

One of the biggest challenges we face now with negotiations is how we do them. Now that most things have moved online, a lot of negotiations are done over the phone or over virtual meetings. While they’re still effective options, they’re not the same as real in-person conversations.

Reading body language and other physical cues is key to being an effective negotiator. Without in-person meetings, it can be hard to tackle negotiation and all the little skills that go into it.

The good news is that like any other skill, you’ll get better with practice. You can also ask to switch from an email discussion or phone conversation to a video conference so you can see who you’re dealing with and get to know them.

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Author

Amanda Covaleski

Amanda is a writer with experience in various industries, including travel, real estate, and career advice. After taking on internships and entry-level jobs, she is familiar with the job search process and landing that crucial first job. Included in her experience is work at an employer/intern matching startup where she marketed an intern database to employers and supported college interns looking for work experience.

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