Negotiation is an important skill for any business professional who wants to achieve their goals, resolve conflicts, and build relationships. While many people focus all of their time on learning how to handle themselves during a negotiation, they forget that a negotiation does not end once you sign the contract and shake hands. Rather, it is a continuous process that requires follow-up. Here are some of the benefits of negotiation follow-up as well as tips for doing so effectively. 

Why Follow-Up Matters

Following up after a negotiation is just as important as the initial discussion. Not only is it polite, but it also helps establish trust and builds lasting relationships. It shows the other person that you genuinely care about their well-being and you are committed to fulfilling your obligations. It also gives you an opportunity to clear up any misunderstandings, clarify goals, and address any issues that may have come up since the negotiation. It is an excellent way to build rapport and strengthen communication with the other party. 

How to Follow-Up Effectively

While there is no exact formula for following up, there are some general guidelines that make your follow-up more effective.

• Follow up as soon as possible. Generally, it is best to do so within 24 hours but if that is not possible, just be sure to check back in as soon as you can after the initial meeting. This shows the other party that are proactive, organized, and eager to do business. 

• Choose an appropriate method of communication that works best for you and your new prospect. Decide if it would be best to follow-up with a phone call, email, written note, or even face-to-face interaction. 

• Tailor your message to meet the specific needs of the other party. Paraphrase your agreement, thank them for their time and cooperation, address any concerns or issues, and confirm next steps. 

• Finally, make sure the other party knows how much you look forward to working together. In order to maintain the relationship long-term, make it a point to keep in touch regularly, check-in periodically, and even schedule face-to-face meetings to share information or gather feedback. This shows that you are committed to the business relationship and are willing to offer support or assistance as needed. It’s also a great way to celebrate achievements along the way and express gratitude for their business.

You will find countless tips and articles that offer advice for how to succeed and avoid missteps at the bargaining table. However, some of the costliest mistakes and most important conversations actually happen before the negotiation begins. While it’s great to have leverage and negotiation experience, planning is equally important when it comes to striking a deal. Poor planning can result in lost money, the other party taking more concessions than you planned, or even an inability to reach an agreement. The more time and preparedness you have before entering a negotiation, the better your final outcome will be. That’s why it is important to conduct a pre-negotiation meeting prior to sitting down at the bargaining table.

What is a Pre-Negotiation Meeting?

Pre-negotiation is the stage in the negotiation process that happens before the actual discussion takes place. It is often overlooked, but it is highly beneficial for both parties so they can determine the best course of action. During a pre-negotiation meeting, both parties discuss how and where the negotiations will take place. They will also define the problems that need to be solved and gather information to begin preparing for the negotiation.

What Must Take Place in a Pre-Negotiation Meeting?

Assess the Situation

Every negotiation is different and you will be negotiating with people who have different styles, goals, and objectives. Remember that people are coming from different circumstances and will value different things to always get to know the other party and their reasons for negotiating. 

Gather Information

Hopefully, you have already conducted some basic research regarding the company and the person you will be negotiating with, but this is your chance to gather even more intel that can help you develop a winning strategy. Ask open-ended questions so you can learn more about what is most important to the other party. What problem(s) are they facing? What are their goals and objectives? What are their pain points? What is motivating them to negotiate? How quickly are they looking to solve the problem? The more you can find out about the other party, the better you will be able to formulate a strategy that will appeal to them.

Consider Any Conflicts That Might Arise

Conflicts are bound to arise in any negotiation and a pre-negotiation meeting is a great opportunity to learn about any differences you might experience at the negotiating table. For example, you may experience conflicting opinions, beliefs, views, or ideologies. By analyzing beforehand what types of conflict might arise, you can frame your negotiation strategies more effectively. 

At the conclusion of the pre-negotiation meeting, you should have all the necessary information needed to prepare and develop an effective strategy. The information gathered at the meeting can help you develop a plan that will address concerns, respect the needs of the other party, and reach your target goals.

In any business negotiation, you can expect to make concessions. Negotiating is all about give and take, so it’s important to learn how to exchange value in a respectable way that encourages long-term relationships. That said, the most experienced negotiators also understand that concessions should be used sparingly and only with a defined purpose. If you concede too much or too little, your outcome will likely be unfavorable for both parties. To that same point, making strategic concessions at the right time can be an effective negotiation tactic. In order to reach the best outcome for all parties, you must understand how to make and manage your concessions. Here are some things to keep in mind in order to make concessions work best to your advantage.

Timing of Concessions

It is important not to make concessions too early in the negotiation process. Conceding too easily or too soon will raise expectations for the other side and they will take your offer for granted. Concessions that are made too quickly don’t feel like real concessions. Buyers are often more satisfied with gradual concessions because it makes them feel like they are actually gaining something of value. Not only can immediate concessions create negative reactions from the other party, but it can also put you in a position with much less leverage. 

Concession Strategies

Prior to the negotiation, write a list of any concessions you are willing to make and what you want in return. You should even prioritize the concessions in order of “most important” to “least important.” You also want to make note of how much your counterpart values each of your concessions.

Never make a concession without asking for something of equal value in return. Any concession you make should always be contingent upon a reciprocal concession of equal value. If you or your counterpart do not reciprocate, trust is diminished and the relationship becomes tarnished. 

Always start with a small concession. Large initial concessions weaken your negotiating power. Your counterpart will be thinking, “If they are willing to give me that much right out of the gate, I wonder how much more I could get out of them.” Always concede the least amount necessary to keep the negotiation moving forward. 

When you do make a concession, be sure to communicate exactly how valuable it is to the other party. Don’t assume they will understand. You want them to understand how much you are sacrificing and how much you’ve actually given away. Not only will this help the other party to be more appreciative, but it will also trigger their desire to reciprocate.

Present your concessions in a way that builds trust and credibility with your counterpart. You want all concessions to feel like they are a win-win for all parties involved.

Learning how to negotiate effectively is an important skill that requires a great deal of preparation. By planning ahead and accounting for all possible outcomes, negotiators stand a better chance of reaching their desired outcome while also setting a strong foundation for future negotiations. Negotiations can be unpredictable and challenging, so knowing when to push, concede, or take a break can greatly increase the likelihood of success. Planning can mean the difference between success and failure, so consider the following tips to help you prepare for your next business negotiation. 

1. Do Your Homework

Before sitting down at the negotiating table, always take time to do your research. You should come to the meeting with as much information as you can get about the person and company you are dealing with. Start by familiarizing yourself with the other party’s products, services, industry, and competitors. This will help you determine their strengths and weaknesses as well as what items are most important to them. You also need to understand your own position and what things you bring to the table. 

2. Identify Your Goals

Setting clear goals is one of the most important parts of negotiation preparation. It is essential that you know what you’re aiming to accomplish. Make a list of your non-negotiables and concessions and be sure you have them prioritized. You need to have specific, tangible goals so you can steer the negotiation in the right direction. Making decisions on the fly can cause later regret. 

3. Consider All Possible Scenarios

Once you have a solid understanding of both your needs as well as those of your counterpart, it’s time to hypothesize and plan for all possible outcomes. By thinking through potential scenarios, you can anticipate possible reactions and counter proposals so you will be more prepared to respond appropriately. 

4. Know Your BATNA

Before approaching the bargaining table, you need to know the conditions of the negotiation. While you will likely need to compromise and make concessions in order to reach a win-win outcome, you want to be sure you don’t concede so much that it prevents you from achieving your desired outcome. Unfortunately, you may not always be able to reach an agreement with the other party, so you need to consider your best alternative to a negotiated agreement (BATNA) in case the negotiations don’t go as planned. 

5. Develop a Strategy

Developing an effective negotiation strategy is another critical component of your preparation. Consider various factors including your desired outcome, priorities and interests, the other party’s goals and objectives, as well as any leverage or alternatives you have. Determine what is motivating the other party and how you can create value for them. A well-developed strategy can help you stay focused and keep the negotiations moving in the right direction.

Successful negotiations rely on strong negotiation tactics as well as an understanding of what your desired outcome looks like. As with any undertaking, success starts with a keen awareness of potential pitfalls and mistakes that could sabotage your ability to reach an agreement. Here are some of the most common pitfalls to avoid in business negotiations and how to steer clear of them. 

1. Failing to Prepare

Successful negotiations begin with adequate preparation and planning. All too often, individuals rush into negotiations without doing their due diligence. Before you begin any conversation, you must understand not only your own goals and desired outcomes, but also those of your counterpart. You also need to establish a strong understanding of the person and the company you are negotiating with. Know their strengths, weaknesses, and what motivates them. Furthermore, you need to know your own bottom line and your walk away point. Once you have gathered all of this information, you should prepare a written analysis for yourself so you can develop a winning strategy. 

2. Focusing Only on Your Interests

Negotiators who only think about their own interests often approach negotiations with a win-lose mentality. They will both enter the ring but only one will come out victorious. Unfortunately, this self-centered way of thinking damages relationships and causes individuals to miss out on valuable opportunities. If you don’t recognize and understand the needs of your counterpart, you will be blind to solutions that could lead to better outcomes for both sides. Remember that the goal of  every business relationship should be a win-win outcome rather than a win-lose. 

3. Letting Emotions Get the Best of You

This is one of the most common pitfalls for novice negotiators. It is very easy to feel frustrated and angry when things aren’t going your way in a negotiation. However, the worst thing you can do is let your emotions take over. Studies have shown that negotiations that start with anger or confrontation consistently lead to poorer outcomes. Be sure to reign in your emotions and know when it’s time to take a break before returning to negotiations, 

4. Succumbing to Pressure Tactics

Anyone who has ever bought something impulsively is familiar with the pressure tactics employed by businesses when they say “only two left” or “sale expires at midnight.” Don’t fall prey to these pressure tactics. Learn to recognize when your counterpart is applying pressure intended to influence your decision and plan ahead for how you will react. 

5. Rushing to Get Things Done

Accepting a deal too quickly just to get things done can lead to regret. Sometimes no agreement or a future agreement is the best alternative. You must always consider the lasting impact of an immediate decision and don’t allow yourself to make decisions out of desperation. Remember that you have a walk away point for a reason.

Business negotiators often feel tremendous pressure to deliver, but it’s not always easy to close the perfect deal. Successful negotiations require thinking outside the box and focusing on the quality of the deal rather than accepting terms for the sake of reaching agreements. Being a skilled negotiator starts with adopting the idea that it requires a deep understanding of each party’s needs and wants. If you seek to learn more about the opposing party, only then can you work collaboratively to reach a mutually beneficial agreement. While negotiations will always require the back and forth exchange of ideas, here are some strategies and best practices that will contribute to a more successful outcome for both sides. 

1. Know the Objectives of Both Parties

Having a clear understanding of your own goals is certainly a founding principle of any negotiation. At the same time, understanding the needs of the other party is equally important. By focusing not only on your needs but on those of the other party, you open your eyes to new possibilities and outcomes that are beneficial for all parties involved. This way of thinking paves the way for a win-win outcome which not only results in a win for both parties, but also strengthens business relationships for future negotiations. 

2. Seek to Provide Value for Both Sides

Oftentimes negotiators are so preoccupied with achieving their own goals that they lose sight of the bigger picture. On the other hand, negotiating with a win-win strategy in mind allows individuals to seek solutions that provide value to all parties. The key is to identify any issues or pain points and turn them into valuable opportunities that are beneficial to everyone. 

3. Confront Tough Issues Head On

It is easy to bury your head in the sand and avoid raising concerns and difficult topics during a negotiation. After all, the last thing you want to do is offend the other party and strain the business relationship. However, ignoring the issues and potential risks isn’t a wise move either. Rather than sweep these tough issues under the rug, address them openly and honestly. This allows both parties to share their concerns and come up with a solution to mitigate risks and avoid potential problems. 

4. Ask Open-Ended Questions and Be a Good Listener

Effective negotiators understand the importance of listening. Some individuals spend so much time talking about themselves and selling their products that they forget to ask questions about what the other party needs and wants. Ask open-ended questions and seek to truly understand the needs and motivations of the other party.  Listen to their concerns and objections and be mindful of their role in the negotiation. Sometimes, listening is the best way to gather details about the other party. This, in turn, allows you to offer solutions that meet their needs as well as your own. 

5. Be an Honest Communicator

Open and honest communication is the key to successful collaborations. You should approach the negotiation with complete transparency, making sure to document everything to avoid misinterpretation. Honest communication is the foundation for strong business relationships and will lead to more fruitful outcomes. 

Many people enter into negotiations with the notion that they might have to be strategic and play “hardball” in order to get what they want. They might even avoid negotiations because they don’t want to sour working relationships. After all, someone will be the winner and someone will end up the loser, right? Not necessarily. There are actually strategies you can employ to ensure everyone walks away feeling like a winner. Here we will explore strategies that can help you achieve a win-win outcome. 

What is a win-win strategy?

It is important that any negotiation is fair and well-balanced, so that all parties involved feel like their arguments are being heard and validated. A negotiation is not about one party winning and the other party losing, but rather two parties seeking to create a mutually beneficial solution. During win-win negotiations, all parties agree to collaborate and work together for the benefit of the group. If both parties walk away happy with what they’ve gained, then it’s a win-win!

Strategies for reaching a win-win outcome:

Separate the people from the problem. 

First and foremost, you need to avoid identifying your counterpart as your “opponent.” Instead, work on finding common ground and seeking ways to compromise. Be sure to focus on the issues at hand and ignore any personality differences. Remain calm and observe the emotions of the other party. Be willing to listen and let them share their ideas and concerns and use your emotional intelligence to gauge when the conversation might be getting tense. Don’t let your emotions take over and make an effort to understand the needs and interests of the other party.

Focus on interests, not positions.

Very seldom are people difficult just for the sake of being difficult. More often than not, there are justifiable reasons for people’s beliefs and there are many things that can influence their decisions. Therefore, try to keep all conversations polite and avoid placing blame. Rather, listen with an open mind and try to understand the other person’s position. When everyone sees that their interests are being considered, they are more likely to be receptive to different points of view.

Seek opportunities for mutual gain.

Once each side has a clear understanding of the other person’s interests, it becomes easier to find valuable solutions. If a solution is not immediately obvious, be open-minded and willing to explore new options. Brainstorm as many ideas as you can and be receptive to any suggestions. The goal is to create opportunities where both parties can walk away feeling like a winner. 

Negotiation is an important skill for any business. Whether you are hammering out the details of a contract, discussing deadlines with team members, or trying to get a group to come to an agreement, you will struggle in your career if you fail to negotiate effectively. Even the smallest mistakes can cost you time and money. As with any other skill, success starts with a keen understanding of potential pitfalls and traps to avoid. Here are some of the most common negotiation mistakes and how you can avoid them. 

Not Preparing Enough

You may be familiar with the saying, “Fail to prepare and prepare to fail.” All too often individuals approach negotiations with the mindset that they are going to “wing it.” Unfortunately, this leads to poor outcomes. Before you begin any negotiation, you must have a clear understanding of both your position as well as the needs of the other party. This means gathering information about what is motivating the other party in order to prepare a well-rounded conversation. You also need to know your own must-haves, concessions you are willing to make, as well as your BATNA. 

Going in with a Win-Lose Attitude

Inexperienced negotiators often feel like there is only one option for a negotiation, and that’s to have a winner and a loser. Approaching negotiations with a win-lose mentality without exploring opportunities for mutual gain will result in missed opportunities and strained business relationships. 

Taking Things Personally

Don’t fall into the trap of letting your emotions take over at the bargaining table. It’s difficult to negotiate effectively if you allow it to affect you on a personal level. In those moments where you feel attacked, try turning that into an opportunity to ask questions to gain helpful information. A great negotiator knows their triggers and doesn’t let their emotions get the best of them. 

Not Building Relationships

There may be times when you go into a negotiation with someone you barely know. At times like this, try to establish a relationship with the other party. A little small talk can build trust and give you a better insight into the goals and values of the other person. You are more likely to reach an agreement if you build a solid relationship early on. 

Competing Instead of Collaborating

As mentioned above, it’s not always smart to enter into a negotiation with a competitive mindset. When you see yourself as competing with the other person, you might miss opportunities to build relationships. A smarter approach is to be open and transparent and look for ways to better understand the other party’s needs. Then, you can find a solution that best suits everyone involved. 

Succumbing to Pressure

If you have ever bought something because it said there was “only one left” or the “sale ends today,” then you have succumbed to pressure tactics. Don’t let this happen at the bargaining table. Learn to recognize when another party is applying pressure that is intended to influence your decision. Remember what your goals are as well as you walk-away point and don’t accept a deal you don’t really want. 

Not Knowing Your BATNA

The term BATNA refers to your “Best Alternative to a Negotiated Agreement.” While the aim of any negotiation is to get what you want, you should always be prepared with your next best option. This allows you to know when it’s time to cut your losses and walk away. Decide on your BATNA before you enter the negotiation so you can push harder during the discussions and potentially get a better deal.

When it comes to business negotiations, what kind of negotiator are you? Do you look for ways to coax the other party to submit to your demands? Do you confidently make an offer that the other party just can’t refuse? Perhaps you are the peacemaker, always looking for a solution that benefits everyone. Regardless of which type of negotiator you tend to be, wouldn’t it be nice if you could simply convince your counterpart to do what you ask simply with the wave of your hand? While this type of magic might not be possible, there are psychological tools that can be used during negotiations. Here are some effective negotiating techniques that are backed by psychological research. 

Diminishing Marginal Losses & Gains

Research shows that people tend to be happier with smaller gains rather than a single gain of the same size.

Example: Imagine you are walking down the street and you find a $20 bill. Now, imagine you are walking down the street and find a $10 bill and the very next day it happens again! Most people would be happier with the latter. In other words, people prefer to receive payments in installments as opposed to one lump sum. On the other hand, most people would rather lose $20 at once than lose $10 a day for two days in a row. This demonstrates that people would rather lose money in one lump sum. 

This same theory applies to negotiation. Your opponent is more likely to accept an offer that includes several small gains rather than a single gain of the same amount. Conversely, your opponent would rather accept a single loss rather than an offer that includes multiple losses of the same value. 

Loss Aversion

Studies have shown that people are more motivated to avoid losses than to achieve gains. In other words, your offer is more likely to be accepted if you frame it in a way that demonstrates what your opponent stands to lose if they reject your offer rather than in terms of what they will gain if they accept your offer. 

Example: An car salesman tries to sell you an electric vehicle by telling you how much money you will save if you make the switch. Now, the next salesman tries to sell you the same car by telling you how much more money you will spend on gas every year by not switching to an electric vehicle. While both are giving the same information, most people are more likely to be swayed by the second offer. 

In terms of a negotiation, your offer is more likely to be accepted if you state it in terms of what your opponent stands to lose rather than telling them what they have to gain.

Disclose Some Personal Information

Self-disclosure is a process in which a person reveals something about themselves to another. People may reveal something personal about their lives in an effort to develop a closer bond with the other person. 

Example: When you sit down at the negotiating table, you begin making small talk and share personal information about your family in an effort to find common ground with your counterpart. 

Self-disclosure is a great way to build rapport and connect with others on a more intimate level. This in turn affects the way in which they communicate with you. It could make them less aggressive and more agreeable toward finding a solution. 

Give Your Counterpart a Surprise Gift

There is a psychology term known as the reciprocity norm that says people feel inclined to return a favor when a favor has been done for them.  

Example: You show up to the next business meeting with coffee and pastries for the group. This simple gesture would make the other party more likely to compromise during the negotiation in an effort to reciprocate your kind gesture. You could also offer to give something, such as a discount or expedited shipping services, to your counterpart and use cooperative language such as, “That’s what partners are for.” 

Giving a gift or something of value can motivate the other person to reciprocate during a negotiation.

No matter your business or industry, there will always be times when you need to negotiate. Negotiations allow all parties to resolve differences and come to agreements. During the process of negotiating, not only are different opinions taken into consideration, but also individual needs, interests, backgrounds, and cultures. Not only is negotiation intended to help one or more parties reach a solution, but it can also be an opportunity to build and strengthen business relationships. 

The Win-Win Approach to Negotiation

Many professionals choose to aim toward a win-win solution. This involves looking for solutions that allow both sides to gain something of value. In other words, this type of negotiation requires negotiators to work collaboratively to find a solution that results in both parties walking away satisfied. 

In an ideal win-win negotiation, both parties are willing to make concessions and comprise. If one party gives something away, the other party reciprocates by negotiating some form of compensation. In the end, both parties feel comfortable with the outcome. 

Focus on Building and Strengthening the Relationship

Disagreements are a normal part of negotiation, but it’s important to maintain the integrity of the relationship. This means leaving your emotions at the door, not placing blame on the other party, and aiming to separate the people from the problem. You must remember that you will be communicating with these people in the future, so you want to build and strengthen those interpersonal relationships. Seek to resolve differences in a respectful manner and remember that the goal is to find an agreeable solution to the problem. 

How to Reach a Win-Win Agreement

• Focus on Interests, Not Positions

People aren’t usually difficult just for the sake of being difficult. Rather, there are almost always underlying issues and valid reasons behind their position. The person may be influenced by their values, beliefs, or responsibilities. Therefore, try to keep the conversation courteous and be receptive to different points of view. 

• Listen to the Other Party

It is so important to not only look out for your own interests but also seek to understand the needs of the other party. Actively listening and understanding the other person will make them feel heard and validated. It is important that everyone has the opportunity to clearly express their own needs, desires, and concerns in order to reach an amicable solution. 

• Seek Options for Mutual Gain

Once each side has a better understanding of the other’s needs, a solution might be easier to reach. If not, brainstorm and explore options that might help solve the problem. Be open to all suggestions and bring any new proposals to the negotiating table.