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Business Negotiation — 8 Strategies You Should Know
- Business negotiation can range from a simple negotiation for cooperation between businesses, discussion over procurement issues, and anything the like.
- Business negotiation is not just about winning, although it can be used as if playing hardball – using a win-or-lose approach.
- There are more than 8 business negotiation styles you can use.
The art of business negotiation is pretty much the same as with any old style of negotiation. Whether you prefer to go gung-ho aggressive or you want to give the other side some concessions because you want to earn the goodwill of your rivals, there are plenty of strategies one can use in order to get their objective.
For this article, we are going to study the art of business negotiation. We’ll reveal 8 tactics never before revealed to other negotiators out there. After reading this article, you’ll realize the power of our strategies and you’ll most likely be using these business negotiation strategies to win your negotiations in the future.
Definitionof Business Negotiation
Business negotiation is, of course, negotiations that take place over matters of business and the like. It could be a simple negotiation for cooperation between two businesses, a discussion of issues over procurement of materials from a supplier to another company, or the takeover of a bigger company towards a smaller franchise. Nevertheless, no matter how big or small the negotiations are, there will always be the matter of how one side is able to push their agenda over the other party. That is pretty much the basics of negotiation.
And just like any other negotiations, there are many ways how to go over business negotiations. We at Procurement Tactics use many styles of negotiations, but with most businesses, the most basic negotiation styles always come with the following:
Using the Competitive Negotiation Style
Want to win a business negotiation without problems? Then simply charge gung-ho and use the most hardball negotiation style, which is the competitive negotiation style.
The competitive style is probably the easiest one to detect. You’re out to win at all costs. It’s often described as a win-lose approach. Playing hardball.
In this approach, one party is looking to get everything they want without giving anything in return that meets the needs of the other party.
The competitive negotiation style is frequently described as the disagreeable negotiator. Dealing with a disagreeable negotiator opponent is considered tough and should be avoided if possible. If possible, look for alternative solutions to avoid a disagreeable negotiation.
Listening is Key
The art of negotiation is also the art of war: the one who listens and observes the most wins. The worst negotiators are always those who simply talk and talk and never listen to the other party. By adopting a strategy where you listen, observe, and understand what the other party needs, you can create a very good offer based on the information you’ve heard.
Of course, not all information is accurate and true. This is why you need advice number 3.
Take Everything with a Grain of Salt
The art of negotiations is a tricky one. That’s why we at Procurement Tactics came up with the Negotiation Course For Procurement Professionals in order to help fledgling negotiators become seasoned ones.
In any case, the seasoned negotiator also knows to take everything that the other side says with a grain of salt. In other words, learn to discern which is true and which is not. If the other side also has a negotiator who is known for being tricky, then all the more you need to watch what they’re saying. Because if you get lucky, you might spot the other party’s weakness!
The Enemy of my Enemy is my Friend
Ever heard of this saying? If yes, then know that you can also apply this to your business negotiations.
If you know anyone who managed to lock horns with the current opposing negotiator or negotiating team, then get information from them. Learn how they were able to negotiate their way against these people. And if your contact lost the negotiations, it could also be helpful for your team to learn from their mistakes!
Don’t forget your BATNA
BATNA means Best Alternative to No Alternative. It’s your key to getting something despite facing a losing battle during negotiations. It’s your assurance that your team might still get something from the negotiations rather than walking away empty-handed. Keep in mind that your BATNA should never be stagnant; you should always be ready to change and/or modify it in case you notice a critical moment from the other party.
Of course, your BATNA may not work at all times. In cases where there is absolutely no point in talking with the other party, you can use Step No.6.
Walking Awayis Also an Option
Walking away from a negotiation is a very powerful business negotiation move. When used correctly, it can turn the tide when faced with a difficult negotiation. It’s also a move that makes you look cool and confident.
However, just like any Spiderman movie, with great power comes great responsibility. When you walk away from a negotiation, there is no turning back. Don’t assume that the other party will come running back to you for re-negotiations. Using the walk-away point is a double-edged sword that should be used after a lot of thinking.
Learn to be Analytic
To handle business negotiations is like solving a huge puzzle with the highest difficulty possible.
Well, the statement above may sound too much, but if you’re going to face a seasoned negotiator thanks to our Negotiation Gamechanger Course, then he/she is going to be a force to be reckoned with!
When facing professional negotiators, it is important to be as analytical as you possibly can. Ask about their offer, check for body movement when they’re talking, learn the pattern behind their offer and counter-offer; these things should be analyzed while you listen to what the others have to say. Analyzing this important information will definitely help you and or your team in coming up with a better offer or counter-offer, recognizing a walk-away point, or using your BATNA.
Be Cool and Calculated
We know. This should be on the top spot of this list. However, we at Procurement Tactics placed this at the bottom as sort of a reminder for all negotiators out there.
Losing your cool during an important business negotiation is a big no-no. Not only are you going to lose the negotiations, but you’re also going to look like an unprofessional. Because your mind is too clouded to make rational decisions, you risk losing important information from the other party.
Being overly emotional during negotiations is the sign of a newbie negotiator, so always be calm, be composed, and keep your emotions in check.
Mastering the art of business negotiation involves strategic approaches and crucial tactics. Whether adopting a competitive negotiation style or emphasizing the power of active listening, negotiators must be astute and adaptable.
Key principles such as discerning information, leveraging past experiences, and embracing alternative strategies like walking away contribute to successful negotiations.
A keen analytical mindset, awareness of BATNA, and maintaining composure amid pressure are indispensable for navigating intricate business dealings.
As negotiators implement these revealed tactics, they gain a valuable edge, ensuring favorable outcomes and positioning themselves as seasoned professionals in the realm of business negotiation.
What is BATNA, and why is it crucial in business negotiations?
BATNA stands for Best Alternative to No Agreement. It’s essential because it provides a fallback plan, ensuring you gain something from negotiations, even in challenging scenarios.
How can active listening impact the outcome of a business negotiation?
Active listening fosters understanding and builds rapport. It encourages honest communication, making the other party more cooperative and open to collaboration.
Why is walking away considered a powerful move in business negotiations?
Walking away signals confidence and can shift the dynamics of a negotiation. It demonstrates that you won’t settle for an unfavorable deal, prompting the other party to reconsider their terms.
About the author
My name is Marijn Overvest, I’m the founder of Procurement Tactics. I have a deep passion for procurement, and I’ve upskilled over 200 procurement teams from all over the world. When I’m not working, I love running and cycling.