Negotiation is often considered an art form. People either believe they know how to negotiate well or that skill set is significantly lacking. The good news is that negotiation is a skill that can be refined and strengthened to be used in different situations.
People think negotiation is used in very specific areas — a boardroom or some sort of contract discussion. The truth is, however, the need to negotiate crops up in many areas of life, especially when making large purchases.
There are a few strategies you can use to better your negotiation skills. You can learn how to negotiate lower prices, better options or terms, and even learn how to negotiate a better price for insurance.
What is negotiation?
The first step in developing or improving negotiation skills is to understand exactly what negotiation is. In the simplest terms, negotiation is a conversation meant to reach an agreement between multiple people or parties.
Rarely is negotiation aggressive or overly forceful. The hope and aim are that both groups involved in the negotiation come out with agreeable terms or outcomes. Negotiation requires some outside-the-box thinking, but it can result in highly satisfying results.
Who does negotiation benefit?
Negotiation is not strictly a compromise. Negotiation aims to provide beneficial outcomes for both parties. Negotiation helps people avoid conflicts, establish and grow relationships, and maximize mutual gains.
What can be negotiated?
Negotiation isn’t isolated to one area or another. In fact, there are many different situations that require a little bit of haggling.
Terms and Conditions in a Contract
When signing a contract or agreeing to a large purchase, there are often terms and conditions to consider. In some cases, these terms and conditions can be discussed and changed. In other words, these terms can be negotiated.
Consider the payment terms when entering into a new phone contract. You can often negotiate these terms depending on your relationship with the phone company, your personal payment history, or how you are entering the contract.
Prices of Large Purchases
One of the most common areas of negotiation is price. Think of some of the larger life purchases like a home or a car. These purchases are often big purchases. Frequently, the final cost is discussed between two parties before an agreement is reached.
The buyer is looking to make a nice profit, but the seller is usually looking to save a little bit of money. Both parties understand the nature of the purchase and both want to come to an agreement. Negotiation can and does help both parties walk away happy.
Various benefits can also be subject to negotiation. Most commonly, the benefits of a job can be negotiated. The hourly or yearly pay amount can often be negotiated when starting a new job or after some time in a position with excellent performance.
Some employers also work with employees to negotiate paid time off. Employees can negotiate for more sick or vacation time, but that is not always a possibility.
An insurance policy is one area where negotiation can come in handy. Many people want to carry a lot of coverage on their vehicles but don’t want to pay high premiums or deductibles. Luckily, there are ways to negotiate better terms or prices for that automotive insurance policy.
If you notice your insurance rates steadily creeping higher, then you might consider negotiating with your insurance company. Insurance companies consider a number of factors when determining coverage and rates.
Some of these factors, like your age, simply can’t be talked around. Other factors like credit and driving history can be used to start a conversation. It’s usually in the best interest of everyone to maintain a business relationship and negotiation allows both parties to see positive results.
What are the best strategies for negotiation?
There are many hacks for success that promise big results. The same is true when it comes to negotiation. Here are five strategies that can help you and the other party see major benefits.
#1 – Negotiation is a Process
The first thing to remember is that negotiation is a process. It doesn’t happen in the first few minutes of a conversation. Look for ways to strengthen and improve standing business relationships.
#2 – Stay Positive
A big portion of negotiations is keeping a positive attitude. Underestimating your ability to successfully negotiate will negatively affect the outcome. Believe you bring something powerful to the table and that the other party needs it.
#3 – Be Prepared
Do your research. Understand the other person, the business, and the industry. The more you know, the more authority you bring into the negotiation.
#4 – Think it Through
Before you enter into negotiations, weigh the benefits and disadvantages. You should understand the full scope of the situation, and you will also be able to better adapt and cope with situations that may arise.
#5 – Give and Take
Negotiation requires some give and take. It’s part of the process. The important thing is to meet the other party when they concede something in the negotiation process. Don’t just take; give a little.
Learn to Negotiate Well
The conversations where negotiating can be used should not be rushed into. There are ways to prepare and strategize to get the best results possible. Consider these strategies and see what kinds of benefits you can reap.