How to Negotiate Anything - Negotiation Skills Step by Step
And the topic today is Negotiation. The reason I want to talk about negotiation now is for a few reasons. First, negotiation is everywhere. Anything you want to do, whatever your intention, whenever there are other people involved you will need to negotiate. And for almost anything we want we need other people, right? So, it's clear that having great negotiation skills will take you far.
Now, oftentimes when we hear about negotiation strategies, they seem very complicated. And so people have turned away from it. It seems like they need to fake something and that’s just hard.
I want to offer a different approach. We need to think about negotiation as a relational process rather than a transactional one. I want to offer clear steps that will help you achieve win-win outcomes for everyone.
The best thing is that you don’t need to learn any complicated strategies. All we will be using are the strategies you learned in our previous episodes. Yes and, open-ended questions, and labeling. That's all we need. If you master negotiation you will automatically become great at making requests, facilitating meetings. You will be more diplomatic you will handle difficult conversations better, you will be better at small talk and casual conversations too.
So let me share the steps with you.
Step 1 - you need to spend some time preparing for negotiation.
Step 2 – you open the conversation by building rapport
Step 3 – you use your opening statement that includes anchoring and framing,
Step 4 – you ask open-ended questions
Step 5 - you use labeling and more questions to discover your partner's positions,
Step 6 - you reframe and re-anchor.
And you repeat this process until you find win-win outcomes.
So let's break it down.
Step 1 is preparation. This means that before entering the negotiation first you need to know what you want. What are your goals here? What do you want to achieve? Now if you enter a negotiation without knowing what you want then it’s impossible to get what you want right because you don’t know what you want. You don’t know where to direct the conversation and the outcome will depend completely on the other party. So you need to be crystal clear on what you want. And you need a few options for your ideal outcomes. At least have 3 options ready but the more the better, which will give you more room for negotiation.
The first option will be like a complete dream. Absolute ideal scenario. The second option will still be great but a little more realistic and the third option will be also great and if you achieve this you will be satisfied but it's not like the best of the best. Be clear on that before entering the negotiation and I recommend you write it down to be really clear.
Then, you need to get into the right mindset. Remember what we said. Negotiation is relational, not transactional. You need to be empathetic and really curious about your conversation partner, what are their needs, wants, and interests and how can you satisfy them. You need to have their best interests in mind.
Once you get into this curiosity-driven mindset, you are halfway there, charming communicator.
That was the pre-work, step 1. Now, we’re entering the conversation.
Step 2 is rapport building. This doesn’t have to be long. It can be a few sentences. What we need to do is to show our conversation partner that we’re their allies, it’s not a competition, and it’s important to establish a friendly atmosphere. That way you and them will be able to relax and find much better outcomes for everyone.
How can you build that rapport?
Open with small talk and try to look for commonalities. If you can find something that you have in common with your partner, use that, talk about that. If it’s an online video you can comment on something in their background that you like for example. You can compliment them – now the compliment needs to be sincere, right? Don’t fake it.
Also, use matching and mirroring. Mirror their body language, if they smile, smile too, if they speak slowly, speak slowly too. Match and mirror to build that rapport.
Step 3 - once you established rapport you’re ready to open the negotiation with your ask. You will open with an opening statement. I encourage you to write this opening statement down and learn it before the conversation. This will give you confidence. And your opening statement will have 2 parts. Anchor and frame.
OK, so what is anchoring. Anchoring is your opening offer or request. So I’ll use an example, I want to offer my product to a client so I open with anchoring which could be:
"We offer you our online training services for a year for a price of 200K." That’s anchoring. Here, I used my best ideal option, which might be slightly unrealistic.
And then comes the second part of my opening statement - framing. Framing is basically the benefit of this offer and it’s important to frame it from their perspective so ask yourself what’s in it for them. Mention benefits for them. So in my situation, I could say:
“This way you will get all your training needs covered in one online platform for a year, plus, you will get 24/7 support from us.”
That was the frame that I added to my anchor. So anchoring is my offer and framing is the benefit for them. And in my opening statement, I need to use both and make them crystal clear.
Now, in the next step, step 4 you will ask an open question. Do you remember from episode 3 that these questions start with What, How, why, when, where? Great question, very flexible for almost any situation is “How does that sound?” I encourage you to keep this question in mind and use it.
In episode 3 you learned about open questions and now you will get to use them. This open question will help you discover your partner's wants, needs, and concerns. It will open the negotiation. So often people who are not skilled in negotiation will make an offer and ask Do you take it or not? And let’s say the answer is no. The conversation is over before the negotiation part even started. So, remember, anchor, frame, ask an open question and only then the negotiation starts.
So let’s return to my example. So let’s say the answer to my offer is. “200 K is over our budget for this program.” Don’t close it, don’t say OK, well bye. Right? Now, the negotiation is beginning.
Here, we’re getting to step 5, which is labeling. Remember from the last episode that labeling always starts with "it sounds like" or "it seems like" and then names the partner’s dominant position. So basically, you will label their position to discover more. You can say: “It sounds like there are some budget constraints.”
They will say “Yes, our budget is 150k per year”.
Now that’s valuable information that you can work with. Here you can make another question"
“What would be the ideal length of the program for your needs?”
They would say:
“One year is minimum but we’re looking for long-term solutions.”
You could label again: “It sounds like 2 or 3 years would be ideal.”
They’d reply: “Yes, two years is what we’re looking for”.
So now you’ve got the information you needed and now you go back to your ideal outcomes, and your second ideal outcome was to sell the training for 175 k per year. You’d also like to sign a contract for 2 years. So, this outcome is still amazing for you, and it might work also for your partner.
So now, comes step 5. You anchor and reframe, basically make another adjusted offer. In this case, it’s your second ideal scenario.
This could sound like this:
“What if we sign a contract for 2 years for a price of 175 k per year. Because the contract will be longer, we can offer a discount and you will get our training and support for 2 years. And we can offer additional live training for your HR team to learn to use the system. How does that sound?”
Notice that I re-anchored, re-framed, and asked another open question – How does that sound.
This way the conversation can continue until we find the best win win outcome for everyone.
They might like this offer and accept it, or they might express another concern, you would label again, ask another diagnostic question and re-anchor and reframe.
You need to stay open for more options. This is the yes and strategy. In negotiation never close the door by saying NO. Whatever they say even if you can’t accept it, say yes and work around that, find new options, new alternatives. Maybe you can make an additional offer, you trade other things but don’t close the negotiation with a NO.
Notice how I introduced another variable in the negotiation – the training for HR. What this does is it allows us to create additional outcomes that work for everyone. Because let’s say that for you to offer this training is not a big deal because you have all the materials prepared you have done it many times. But for them, this can be of huge value for them, because they will need to train their staff, right? So this way you increase the value for everyone. That’s a win – win.
Let me repeat the steps:
Step 1 is preparation where you get clear on your goals and create the right mindset which is that you get curious about your partner and their interests. You have their interests in mind.
Step 2 – is rapport building with small talk and through finding commonalities, matching, and mirroring body language, making compliments
Step 3 – is opening the negotiation with your opening statement. Your opening statement consists of an anchor and a frame. The anchor is your offer and frame is the what’s in it for them.
Step 4 – you ask open-ended questions like How does that sound?
Step 5 – labeling which is it sounds like or it seems like and naming your partner position. You also add more questions to discover your partner's positions,
Step 6 - you reframe and re-anchor.
And you repeat until you generate a win-win outcome.
This is all you need to be successful in any negotiation. Stay open to different options, stay curious, and discover and address your partner's needs. And remember, negotiation is relational.
I invite you to listen to this episode a few times and also go back to previous episodes on questions and labeling, yes and… and practice these strategies in your daily life. Not only in an official negotiation, but every day, in conversation with your colleagues, bosses, business partners, family friends, everyone! You will be surprised by your results. Let me know what results in you’re getting and thank me later.
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