Mastering the art of the deal: Proven negotiation tactics for business leaders

By M. Muniru HUSSEINI, PhD

Negotiation is a powerful lever for much of human progress. It is the fulcrum around which businesses initiate, grow and strike their most impactful deals. Beyond all our routine and mundane transactions or dealings, the vast majority of achievements are the outcome of methodical, incisive and deliberate negotiation.

Therefore, anyone who aspires to achieve meaningful growth and make quantum leaps in their business or professional journey must learn to navigate a complex mesh of interests and interactions that involve a wide array of people. In your lifetime, you are likely to negotiate contracts, partnerships, salaries and wages, prices, payment plans and, even, love.

The objective is not to walk away from a negotiation feeling dissonant or an emotional disequilibrium. Rather, you want to emerge with a good sense of balance and value, knowing you received your money’s and your time’s worth.

The negotiation landscape – core principles

Principles drive the world of negotiation, and a failure to abide by these principles invariably leads to loss or less-than-desirable outcomes. One such principle is reciprocity, which involves offering the other party a clear quid pro quo and a tangible sense of what they are getting in return for what they would give up. It imbues a sense of equity and imposes a moral imperative that makes the other party more willing to offer something.

Studies show that being the first to offer a small gesture in the form of a free sample or a strategic concession can increase agreement rates by up to 34 percent (Sondern & Hertel, 2019). It is also important to offer social proof by demonstrating that several others have accepted similar proposals.

This builds trust and increases the possibility of a favourable decision from the other party. An effective way to build trust with social proof is through credible customer testimonials and citing expert reviews, opinions or endorsements in your negotiation materials, and making them relevant to your offer.

Another key principle is to discern the key motivations and interests of the other party. While some motives may be obvious and explicit, the most pervasive drivers of the other party’s actions are often latent and not expressly admitted. The ability to uncover their underlying needs and interests, rather than just their stated positions, can catalyse the negotiation process and lead to more mutually beneficial outcomes.

Additionally, creating a perception of limited availability boosts the perceived value of the offer and induces a sense of urgency in the other party. Their knowledge of the limited availability of a product or offer heightens their sensitivity to time and subtly induces a much quicker decision than it would ordinarily take for them to make.

You should always go into a negotiation with a clear understanding of your alternatives should the negotiation fail. Having a clear sense of your alternatives minimises the risk of appearing desperate and making potentially costly concessions. These principles are applicable across many different contexts, including contracts, merger talks, salary discussions and everyday purchases.

Core negotiation tactics

Armed with the knowledge of these principles, it is important to proceed with every negotiation by meticulously following certain key tactics that would almost guarantee a beneficial outcome. I discuss these as follows:

Active listening. In your attempt to dominate and appear self-assured, you might get into a negotiation and soon begin to pontificate in an almost gung-ho fashion. The critical starting point is to seek to understand the other party and identify their primary motives, interests and priorities.

This involves full concentration, recollection and appropriately responding to what the other party says, rather than simply waiting for your turn to speak. It includes maintaining steady and reasonable eye contact and nodding occasionally at the other party’s points without interrupting them. In responding, you might want to paraphrase and summarise their key points or ask questions to further clarify a point they made.

You might want to use phrases like: “I would first like to fully understand your viewpoint before we delve into any answers and solutions”, “Could you kindly elaborate on this point further”, “It seems to me you’ve been dealing with immense pressure on this issue”, etc. This way, you are able to build trust, clarify key issues right from the beginning, and demonstrate empathy – all of which are vital to propelling the negotiation forward.

Strategic questioning. This involves a deliberate and carefully thought-through approach to asking questions that steer the conversation in a manner that uncovers vital information, synchronises your interests and smoothens the process of achieving mutually beneficial outcomes. You must be purposeful, constructive and deliberate in maintaining a respectful tone in your wording.

Ask open-ended questions to instigate dialogue and get the other party to talk freely or tell a story. In contrast, closed-ended questions would only elicit simple yes-or-no answers, frustrating the conversation and hindering the flow of information. Additionally, asking loaded, rapid-fire and presumptuous questions could unnecessarily put the other party on the defensive and evoke emotional reactions that take away from having a productive dialogue.

These are ultimately manipulative, damaging to trust and time-wasting. Strategic questioning, on the other hand, clarifies your positions, explores mutually beneficial options and drives the conversation forward.

Anchor the deal. In negotiations, many people avoid making the first offer, either out of anxiety or fear of revealing too much. Indeed, several negotiation manuals strongly admonish against ever making the first offer, since you run the risk of showing your cards early, or you could unknowingly give away some of your bargaining leverage.

However, there are several instances where making the first offer is advantageous and potentially leads to a more favourable outcome. Making the first offer lets you set a reference point for the discussion and can influence your counterpart’s perception of what is fair or reasonable.

One instance where making the first offer is advantageous is when you have a good sense of the other party’s BATNA (Best Alternative to a Negotiated Agreement). You know the market value or going rate of what is at stake, you have credible industry information, market data, competitor benchmarks and you have an idea of what their budget range is. That way, you can steer the conversation along your terms and gain more out of the negotiation.

Build rapport. Building rapport means establishing trust and giving the other party a sense of comfort in dealing with you.  You need to demonstrate empathy by honestly expressing your knowledge and understanding of their needs and concerns. In building rapport, you show respect and esteem the other party a little more highly.

Demonstrate your shared goals by sharing personal stories and creating a sense of commonality and humanity with issues they can identify with. Additionally, you should subtly mirror the other party’s body language, tonality and communication style. You should understand their cultural nuances and adapt in a manner that immerses you in their world.

This creates natural desirability, increases trust and catalyses the progress of the negotiation. On the other hand, communicating (both verbally and non-verbally) in unfamiliar ways and demonstrating a form of superiority in your mannerisms would only generate adversarial reactions and diminish your chances of securing beneficial outcomes in any negotiation.

Know when to walk away. Negotiations can fail, and going into any negotiation with absolute certainty is most egregious and defeatist. Every negotiator must have a clearly defined BATNA (Best Alternative to a Negotiated Agreement), positions they consider untenable and boundary lines they would walk away from.

The lack of a clearly defined BATNA makes you appear desperate and may lead the other party to be exploitative. Decide in advance what you would do if the negotiation does not succeed. Additionally, you should expand your knowledge of all the alternatives available to you, gather competitive information and deliberately create new alternatives while you explore a fair and favourable deal.

A real estate developer who is not getting their preferred price for a property could earn via Airbnb while shopping for a good deal. Improve your BATNA by not making a single negotiation the be-all and end-all of a deal you want to make.

Negotiation is an art, and good negotiators attain mastery through time. The best negotiators have lost out on a deal at some point in their careers, but they continued to hone their skills by learning and growing from experience. Applying the principles and tactics outlined in this article would progressively make you a competent and effective negotiator and dealmaker.

About the writer

The writer is a marketing strategist and lecturer at the University of Professional Studies, Accra.

Email: [email protected]

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