How to improve your negotiation skills


Date: 27 August 2020

Sales people negotiate a difficult sales contract

We tend to believe that the best negotiating technique for dealing with anxiety is to calm down. However, it is recommended that you try to turn the high physiological arousal associated with anxiety into excitement.

That is easier said than done - even professional negotiators get nervous. A nervous state of mind can lead to costly decisions. But research has shown that subtle framing tactics that treat arousal as a plus rather than a minus increase genuine feelings of arousal and improve subsequent negotiating performance.

Making an initial offer

In any negotiation, the initial offer usually serves as a strong anchor, even for experienced professional negotiators. The person making the first offer is likely to influence the final discussion in their favour, according to a widespread heuristic decision known as "anchor bias," first documented by psychologists Amos Tversky and Daniel Kahneman. The discussion of a draft contract is anchored in the first offer, not in the final offer from the other side.

While such drafts are not always appropriate, they can increase the impact on negotiations, according to Jeswald Salacuse, professor at Tufts University. To gain even more influence, you could try to open the process of drawing up a draft contract or a standard contract form. Use it to your advantage, and it could save both sides time and money, making it a negotiating technique that could pay off.

Using silence

During discussions, we tend to rush to fill in the awkward silences that arise between argument and counter-argument. This is a mistake. The power of silence can be used much more effectively in a dispute, according to a recent study.

When your counterpart speaks, enjoy a few moments of silence to fully absorb what is said. Silence allows you to tone down your instincts and strengthen your resolve to listen. Using silence can also help to defuse our tendency to anchor ourselves.

If an opponent throws an indignant anchor into the negotiations, it can be defused by the use of silence.

Take advice

Professional negotiators often assume that seeking advice from the other party implies weakness or inexperience. But participants in a recent study rated partners who sought advice as more competent than those who did not. Researchers found that counsellors were flattered when asked for advice and it boosted their self-confidence.

So, take the opportunity to ask your opposite party for advice when you need it, and you will probably benefit from it and strengthen your relationship.

Test your offer

How can you reach an agreement that is fair to both sides when negotiations are stagnating or at odds? You may be frustrated by the fact that your counterpart seems unable to make or present a reasonable, good-faith offer. Test your fair offer with your final offer. If possible, test your fair offer before the other side.

Final offer arbitration

A promising but underused tool is Final Offer Arbitration (FOA), also known as baseball arbitration. Under FOA, both parties submit their best and last bid to a third-party arbitrator. It is the arbitrator who decides which party's offer wins. The arbitrator's decision is final and neither party can appeal the decision.

In Major League Baseball, where FOA is frequently used, players and teams are often motivated to settle contract disputes by uncertainty about what the arbitrator's final decision will be. If both parties agree to use FOA, their offers will be reasonable because they have an incentive to impress the arbitrator with their offer.

Next time you get into an argument with someone you think is unreasonable, suggest FOA. Your counterpart is likely to bluff his or her way to your proposal with a much more sensible offer.

Copyright 2020. Article was made possible by site supporter The Gap Partnership

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