Essential Negotiation Tips to Close the Deal

What not to do when negotiating

Despite your best efforts, one wrong move can tank a negotiation. We spoke with Molly Fletcher, consultant and author of A Winner’s Guide to Negotiating: How Conversation Gets Deals Done, about common negotiation blunders to avoid. 

1. Don’t wing it.

The key to a successful negotiation is to be prepared, which means much more than knowing numbers and facts.

“Failing to prepare is preparing to fail,” Fletcher cautioned. “Preparation means gathering and understanding the hard data — for example, your comparables — but it also means having 360-degree awareness.”

Preparing properly means knowing the needs, values, hopes and fears of the decision-maker and other parties. This means not assuming that anything is nonnegotiable.

“Gather as much data as you can in advance, and be prepared to ask strong diagnostic questions to gain clarity,” Fletcher said. “There is rarely a clear roadmap within a negotiation.”

The more prepared you are, the better you’ll be able to navigate the negotiation.

2. Don’t rush.

Negotiations take time, especially if you want them to go smoothly. For example, it’s crucial to take the time to establish a genuine relationship with the other party. 

“Share a little piece of personal information that signals your openness and desire for connection,” Fletcher advised. “Doing so can shift a negotiation from an adversarial battle to a productive conversation.”

Additionally, don’t be afraid to build in pauses, as they can help everyone regain perspective and remove undue emotions.

“A negotiation doesn’t have to happen all at once,” Fletcher said. Taking the time to communicate and negotiate effectively can help you build and maintain good business relationships for the long term. 

3. Don’t take anything personally.

Fletcher recognizes that it can be easy to let your emotions get the better of you during a negotiation, especially if the outcome affects you personally. But getting too emotional will hurt your cause.

Fletcher’s advice for making it through unscathed? “Challenge yourself to turn moments where you feel attacked and defensive into moments of curiosity where you can gain feedback,” she said. “Emotion can easily be used against you in a negotiation.”

Fletcher also advised being aware of your emotional triggers and knowing how to pull back when you feel things shifting in the wrong direction.

4. Don’t accept a bad deal.

Negotiation can be a long, tiring and stressful process. You may feel pressure to agree to an unfavorable deal. But according to Fletcher, settling just to get a deal isn’t good, no matter what side you’re on.

“It’s important to remember that a deal isn’t necessarily better than no deal,” Fletcher said. “That can be discouraging when you’ve invested time and energy into getting a deal done, but it’s important to have that clarity.”

Before the negotiation, make sure you understand precisely what you’re willing to give up. “Ask yourself, ‘What does success look like? At what point am I comfortable walking away?'” Fletcher said. Ultimately, walking away from a deal should always be an option.

5. Don’t over-negotiate.

If you’re lucky enough to have the upper hand during the negotiation, don’t push it too far, Fletcher cautioned. Consider the consequences of over-negotiating: You might get what you want, but at what price?

“Don’t put yourself in a position where you can’t go back to a relationship because you overleveraged,” Fletcher warned. “Recognize that, hopefully, this is a relationship and a conversation that will continue over time.”

What to do when negotiating

Avoiding a major misstep will keep you at the table, but you must act wisely to make a great deal. Here are some proactive tips for successful negotiations:

6. Be the first to make an offer.

Part of being a good negotiator is taking control of the deal. Making the first offer creates a standard for the contract, especially if you’re the seller. It’s an effective way to anchor the terms and conditions that are most important to you in the negotiations right from the get-go. 

7. Provide set terms instead of price ranges.

Providing a price range only gives the buyer the upper hand. Buyers will focus on the low end of the price range and get the agreement locked at that rate. 

Start with a higher-priced offer, taking into account the direct and indirect costs you’ll incur, and then find ways to add value to the deal without significantly lowering the price. When making concessions, do so incrementally and stay firm about your minimum price goal.

8. Use words wisely while negotiating.

You don’t have to talk about the entire negotiation. Say what you need to say, and combine that with direct contact. This direct approach establishes confidence, making the other party more likely to accept your proposed terms.

Keep in mind that you aren’t just trying to close a deal; your communication strategy should focus on managing a customer relationship that lasts.

9. Ask open-ended questions, and be a good listener.

Instead of asking yes-or-no questions, which don’t produce details and context, choose questions that help the other party understand how they benefit from the negotiation and ensure they understand the overall agreement. Listen to their concerns and objections, and counter them with answers that prevent doubt.

10. Offer a win-win scenario.

Any agreement that ends up benefiting only one side will lead to a faulty business relationship. One-sided negotiations decrease trust and rapport. Both you and the other party should be assured that you’re getting a fair deal.

Negotiation nuances to understand

There’s no such thing as a foolproof negotiation method, but some tactics are more productive than others. Here are some examples of negotiation nuances you should understand.

Close the deal while adding value.

When you’re closing the deal, try to add value to the contract instead of selling yourself short. 

For example, if you’re selling cable packages, you may be happy just to get someone to agree to subscribe to the service. However, a seasoned negotiator will go the extra mile by offering premium channels and upgraded equipment. Moreover, these add-ons will be better received if you throw in a discount that helps customers get more for their money.

When you go beyond closing deals and aim to create customer delight, you’ll build loyalty that boosts your company’s bottom line. 

Never denigrate the product or service.

If you include too many negatives in your negotiations, you’ll scare customers away. For example, if the customer who’s considering your cable package comments that the price is higher than expected, the worst thing you can do is agree with them. 

If a customer gives you their undivided attention, they likely want you to convince them to buy your service and products. However, by agreeing that the package costs too much, you’re simply affirming that the service isn’t worth the money.

Instead, counter this argument by acknowledging their concerns and providing more context. Try something like this: “It may seem like a lot, but with all the channels you’re getting, we are losing money,” or “Yes, some customers say that, but we do provide a bulk discount that makes it much more affordable than it seems.” 

Staying respectful of both the customer’s concerns and your product or service will present you in a much better light, ultimately boosting the customer’s confidence.

The importance of negotiation skills

Negotiating is a skill that goes hand in hand with the skills you need to become a better salesperson. You may be tasked with negotiating lower credit card processing fees, real estate transactions, conflict resolutions, company mergers, sales and purchases of merchandise, and employee salaries. You may even need to negotiate when asking for a raise. 

It’s not all about money; honing your negotiation skills can also help you become a better leader and improve your everyday interactions. Learning to prepare, communicate effectively and listen will benefit every aspect of your career, business and life.

All employees, not just business leaders and sales managers, can benefit from developing their negotiation skills, which will help them manage conflict and improve their communication skills, thus benefiting the business as a whole.

Sharpen your skills for success

Following these tips is a great start, but like all skills, effective negotiation takes practice. The more you train and participate in real negotiations, the more confident you will be in your abilities.

Of course, every negotiation is different, and what works in one situation might not work in another. But if you keep these tips in mind and feel secure in your skills, you’ll be sure to close any deal with success. 

Tom Anziano and Brittney Helmrich contributed to this article. Source interviews were conducted for a previous version of this article.