How many life-changing, growth-catalyzing deals didn’t get done this year because the two sides weren’t able to see eye-to-eye on the value they could create together? How many opportunities did you miss to make real magic happen -- for reasons that perhaps had nothing to do with the deal itself?
I see it all the time -- a great deal left undone because one side didn’t have the negotiation skills to convince the other of the value they could have created together.
For a lot of people, negotiation can seem a bit mystifying, and as a result, artful negotiation remains an underutilized skillset. But the truth is, negotiation is a skill like any other -- and anyone can master it. That’s why I’ve put together these 10 tips -- the top things I've learned at places like Harvard Business School and that I use everyday in my decade-plus entrepreneurial career to help create win-win scenarios for myself and my partners.
So whether you’re making the case for a better salary or trying to close a million-dollar real estate deal, here are the top 10 tips that will help you make your next blockbuster deal happen.
For a more detailed breakdown, check out my podcast on the subject:
Tip 1 -- Connect on a personal level.
I can’t stress it enough -- human connection is paramount in negotiation, and your attitude and energy going in will set the tone and affect the outcome. In other words, if you go in anticipating a war, that’s exactly what you’ll experience. On the flipside, if you go in expecting that you’re going to make a deal that satisfies the interests of both parties, you’re much more likely to have that outcome.
It starts with a mindset. You need to set aside the idea of negotiation as contest between two adversaries, and instead realize that you’re working with the person across the table, with the ultimate goal of creating a mutually beneficial arrangement. To get there, you need to connect with the other party on a human level.
Don’t forget -- it’s almost impossible to truly connect with someone over the phone, over Skype, and especially over email. Face-to-face meetings are always the way to go.
Finally, keep in mind that language, both verbal and nonverbal, matters. Use words like “long-term” and “common-ground” to convey a sense of common interest and lasting value. Your body language and tone should be relaxed as well, never confrontational.
Tip 2 -- Know who you’re dealing with.
No, really know them. In my experience, most deals don’t get done because one side didn’t know enough about the other party.
In order to make a deal happen, you have to know what the other side wants. And in order to know this, you have to really get to know the other party -- their background, needs, motivations. What makes them tick? What gets them out of bed in the morning? What keeps them up at night?
So, how do you get there? There’s no shortcut. You have to do your research, and ask tons of questions from the outset. A common mistake that I see holding up progress all the time is people’s tendency to assume that the other party is just like us -- that their internal logic is exactly the same as ours, that they have the same wants, fears and motivations as we do. It’s almost never the case.
If you understand where they’re coming from, you can also explain things in terms that are meaningful to them, and you will be better prepared to adapt to the dialogue as terms change.
Tip 3 -- Include more items to negotiate, not less.
Another mistake I see people make is not asking for more than the bare minimum. This is mostly done out of fear -- a fear that asking for too much might upset the other party and kill the deal before it ever has a chance. But usually this fear is overblown, and only coming to the table with your deal breakers means that one or more of them will end up on the chopping block.
Here’s an example. If you’re negotiating with your landlord to paint your apartment, ask for several additional, reasonable improvements -- new landscaping, a new dishwasher or new kitchen flooring. Asking for more gives you items to trade and wiggle room until you get to the make or break items. You’ll be more likely to get what you want. Then again, there’s always the possibility that you get everything you ask for.
Tip 4 -- Disclose as much information as possible.
Information creates trust. When you keep your cards too close to your chest, people become wary. Open up and share as much information as you can with people to give them the full scope of your thinking. This will only make your desired outcome seem less foreign.
Details also lend credibility. They demonstrate that you’ve done your homework, you’ve thought things through, and you are approaching negotiation from a thoughtful, reasoned perspective.
If you’re negotiating a commercial real estate project on the coast, anticipate questions and integrate detailed information on the environmental impact of the development. Of course, make sure that the disclosures are in line with your goals, but don’t be afraid to air on the side of transparency.
Tip 5 -- Integrate as many intangibles as possible.
Intangibles fill the spaces between all of the legal and financial components of a deal. This is often where you can win.
What do I mean by “intangibles?” These are the things that matter to the other side that you can easily give -- the things that have virtually no downside for you, but have lots of upside for the other party. If your brand has a robust social following, for instance, offer to run social media campaigns for the other party. This will have little cost on your end, but will be attractive to a partner who doesn’t have access to a large social audience.
If you’re an employer negotiating a salary, consider throwing in remote days, flexible hours and other intangibles. Again, extremely valuable for the employee, but of little to no cost to the employer.
Tip 6 -- Remember life is not all about money.
We’d all be better served to remember that money is a currency, a mere proxy for human needs and nothing more. Don’t assume that money is the end all, be all for everyone. It’s not. This is even more pronounced in the Millennial generation, most of whom value their time, experiences and overall quality of life over and above financial incentives.
If you’re stuck at an impasse, ask yourself, is there anything besides money that is important to me? Is there anything besides money that’s important to the other party? If it’s easy to concede, hone in on that.
Tip 7 -- Create relatability by getting “yeses” out of the way.
The more you can agree to early on creates more relatability between the two parties. To achieve this, get a lot of yeses out of the way first. On your side, pre-plan for a lot of agreements. That way, by the time you reach the sticking points, the common ground you’ve established will increase the likelihood that you’ll be able to reach an agreement.
Tip 8 -- Be incremental.
Many people also can’t deal with the pain of initial rejection. They go in thinking that they have to hit a home run right away and wrap the deal up in a day. When they hear their first no, they give up.
So often, progress is incremental, and the deal is a six-week, or perhaps six-month process. Don’t swing for the fence right off the bat. Be satisfied with incremental progress, and keep pushing talks forward.
Tip 9 -- Don’t use deadlines.
Most people think deadlines help in big negotiations, but they almost never do. Instead, they breed more irrationality and irritability and are likely to sabotage your deal before it gets off the ground. Deadlines don’t increase scarcity. In fact, they often have the opposite effect, and the party attempting to impose the deadline comes off looking desperate. Deadlines also make negotiations feel like they’re transactions, and transactions are the opposite of what good deals are about.
Tip 10 -- Don’t be afraid to think big!
Finally, ask yourself, are you thinking big enough? Just getting a deal done isn’t always enough. What else could have been done? Could something have been tied to the back-end? Again, this comes down to the confidence that comes with truly knowing the other party.
If you know that you’ve got an idea or a product that will add value to their business, be confident in asking for what you think it’s worth. You’ll never get things that you don’t ask for. Don’t just focus on the cake, go for the bakery!
Putting it all in practice.
So there you have it -- the 10 tips that will help you negotiate like a boss. So often, it’s just as important to remember what not to do. Be sure to avoid these common pitfalls:
Don't assume other people’s internal logic is similar to yours. Exercise true empathy to determine the other party's motivations.
Don't believe the mantra "it's just business." All business is personal, and this phrase is usually trotted out as an excuse to mistreat people.
Don't use power and leverage. Doing so puts the negotiation in the realm of the purely transactional, which is usually bad for both parties.
Now go out there and make magic happen.
Want more tips like this? Subscribe to my podcast, the Awesome Office show on iTunes.