Written by Anna Bernstein on 13 May 2014
Business negotiations can be extremely difficult; obtaining what you want whilst maintaining order, good communication and a working relationship takes skill and practice to master. Strong negotiation boils down to an understanding of the situation versus the style of negotiation that should be applied. This is a formula that all top negotiators understand and apply; this post aims to introduce you to this way of thinking so that you too can succeed when faced with a difficult negotiation.
Let’s start by looking at the 5 negotiation styles you must first know and understand.
Bargaining is the most common style of negotiation, as well as the easiest to apply. Most commonly applied to situations that involved sales, bargaining can be an extremely effective style of negotiation in which both parties often walk away feeling like they have won. For this to work however, you need to have a clear idea of what you wish to achieve before negotiations even begin. Whether it is a price or simply the terms and conditions of a contract, you need to know exactly what you want to walk away with before you commence negotiations.
Real life situation: You are in talks with a new supplier of paper for your company, as your old supplier has increased their prices. You need to negotiate at least a 20% discount to remain within your budget. Having listened to their sales pitch, the new supplier looks keen to have your business. You start negotiations at 30% and bargain back and forth until you both agree on a 25% discount.
When negotiators use a compromising style it can often be regarded as a bit of a failure as you did not succeed in achieving exactly what you wanted. Inexperienced negotiators often find themselves resorting to a compromising style because they lack the skills, experience and confidence to approach the situation any other way.
However, there are times when even a highly experienced negotiator will apply a compromising style, such as the negotiation of a contract.
Real life situation: You have succeeded in being offered a new job, and you must sign an employment contract. A contract by nature is a set of terms, conditions and rules that both parties must agree to. As expected, a contract will not always suit both parties needs and requirements, so compromise must be applied in order for both to come to an agreement that they can sign upon.
A logical approach to negotiation refers to delivering facts, data and results that will hopefully win the negotiation for you. Due to its nature of quashing any opposition through solid factual evidence, this is an approach that carries a high success rate. Armed with a logical approach you can enter negotiations confidently and focus your efforts on achieving your goals.
Real life situation: You may need to pitch an idea to the boardroom that requires more funding. With facts, data, statistics and results that prove that your idea is a viable investment for the company, the situation becomes less of a negotiation and more of an easy sell.
The emotional style relies on your ability to appeal to the other party’s emotions in order to sway the negotiation in your favour. This is a difficult style to master as it requires a firm understanding of human emotion and behaviour, as well as impeccable communicative skills. However, applied correctly, the emotional style of negotiation can be highly effective.
In order to apply this style you must first put in the ground work. This means researching into the other party’s background, history, visions and values. Loaded with this information you can then use it to appeal to them on an emotional level.
Real life situation: You require donations from several businesses in order to continue as a non-profit organisation. You have found out in your research that several of these businesses actively support local charities that you work with. With this information you can then adopt an emotional style of negotiation that demonstrates how you too help and support these charities through your organisations work.
As the title suggests, the combined style is a mixture of all of the above; this is the style that top negotiators use. Having fully studied and understood the first four negotiation styles you will begin to familiarise and recognise when a situation calls for one, two or several of the above negotiation styles. The more situations that you get to practice your new skills the more confident and successful you will become at winning.
Real life situation: You’re pitching for a new client; you use the logical style to show them exactly how and with what results you could achieve for them. As well as this you apply the emotional style to show that, although you are a small company, you are a dedicated and hardworking local start-up business that prides itself on achieving results for its clients.
Although interested, the client doesn’t want to pay the fee that you proposed and instead suggests a trial period. You adopt the compromising style and agree on a fee that covers your time, yet is more attractive to the client. After the trial period you have achieved outstanding results for your new client. You adopt the bargaining style to ensure that you negotiate a new fee that is more profitable to you.
As you can see each of these negotiation styles have their place, used correctly and confidently, each can be used to gain the results you require.