Think of all the times you need to negotiate: whether it’s a bidding war on eBay, a pay rise at work, selling your product or service to investors, or hammering out the terms of a contract. Everyone should know how to negotiate, but sometimes we make mistakes that can lose you the game.
Of course, there are the obvious common mistakes people make during negotiations, from not building relationships, to not actually listening to feedback. But here are some lesser-known mistakes you probably make that hurt your position during negotiations.
#1. Go for a win-win situation
When going into a negotiation, you want to keep it positive, avoid any potential conflict, and keep your counterpart on good terms — but avoiding the inevitably disagreement only puts you at the losing end later down the line.
Looking for a “win-win” situation from the very beginning of the negotiation means you could give up something you didn’t need to or give it up without getting anything in return — just the deep feeling of regret.
According to a study called “Journal of Organizational Behavior,” it found that those who seek out a win-win situation feel better, but ultimately, end up doing worse in negotiations than those who seek a win-lose.
The 💜 of EU tech
The latest rumblings from the EU tech scene, a story from our wise ol' founder Boris, and some questionable AI art. It's free, every week, in your inbox. Sign up now!
Make sure you lay out all your concerns early on, be honest and open about your expectations, and fairly debate on an outcome that works for you both — just be a little selfish.
#2. Skip the small talk
There’s a myth that when negotiating, there are only two ways to behave: either in an unfriendly and an antagonistic way to get what you want or playing too nice to avoid hurt feelings. But, according to Harvard Business Review study from 2018 on how to negotiate without being a pushover, treating a negotiation like a relationship rather than an impersonal business deal can improve the final outcome for everyone.
While it may seem like diving into the deep end of a negotiation is the logical first step, a skilled negotiator will start with smart small talk. It’s simple: just get to know the other person and you’ll get more insight into their interests and concerns about the deal.
It’s (hopefully) not in your nature to go around offending people all the time, but when negotiating, you don’t want to come across as a complete pushover who can easily be taken advantage of later. Being firm doesn’t mean you should come across as cold-hearted, but it does mean you’re confident and know what you want.
#3. Ignore your emotions
Since we’re all human, switching off emotions is impossible (unless you’re a psychopath). Most “How to negotiate” tips advise you to not let emotions take over, which is true to an extent, since you don’t want to be screaming through angry tears at Lisa across the table.
When most people negotiate, they attempt to disregard or overcome their emotions. According to a study by Harvard Business Review on negotiating with emotion, both positive and negative emotions are valuable assets to take into a negotiation. But the key is to recognize during the negotiation what emotion you’re feeling, and deciding whether it will help or hinder you in negotiating.
When negotiating you’ll probably feel a mix of feelings from nerves, excitement, anger, and possibly even regret. Instead of ignoring these feelings, use them to your advantage, or recognize how they won’t benefit you.
For example, excitement makes you sound passionate about what you’re negotiating. But if anger is wielded as a weapon, trust will be lost, and chances are, things will take a turn for the worse.
Wondering when your emotions have gotten the better of you? You’re probably twitching, holding creepy eye contact, or smiling for a second too long.
#4. Meet in fancy restaurants
According to new research from the University of Chicago Booth School of Business, when people in a business negotiation share not just a meal but a plate, they collaborate better and reach deals faster.
In the study “Shared Plates, Shared Minds,” researchers found that sharing requires people to coordinate, and in turn, it prompts people to coordinate their negotiations.
The participants were invited to have a snack of chips and salsa with their partners. Half of the pairs received one bowl of chips and one bowl of salsa to share, while the others each had their own bowls.
Then, the negotiation took place. One person in each pair was randomly assigned as “management’ and the other as a “union representative.” Their goal was to arrive at a wage for the union within 22 rounds of negotiation, with each round representing one day of negotiations.
Teams with shared bowls took nine strike days, on average, to reach a deal, four fewer than pairs that had eaten from separate bowls. This difference translated into significant dollar values, saving both parties a combined, if hypothetical, $1.5 million in losses.
So basically, every meal you’re eating alone is a missed opportunity.
#5. Negotiate against yourself
I mean, obviously? But this is especially true if you don’t know the position of your counterpart, or their intentions. Even if you know absolutely everything about your ideal outcome in a negotiation, you’ve disregarded the other 50 percent of the debate.
Failing to prepare for a negotiation if essentially negotiating against yourself: you don’t know their worries, their stance, or their preferred outcome so you won’t know what to offer — it’s like going into an exam without doing any revision.
Not only does doing your homework make you feel more confident, but you also prove you know your stuff when you’ve foreseen other angles of the negotiation. Covering every possible bit of ground in a negotiation is key as it’s extremely difficult to get new demands accepted after the negotiation has taken place.
6. Threaten to walk away
Like in any situation, when you feel like the odds aren’t in your favor, your flight-or-fight response kicks in. In a negotiation setting, most people see their best option at this point is to simply walk away.
You’re most likely negotiating in the first place because you want something from the deal. For example, you want a pay rise of $3,000 but your manager says they can only stretch to $1,500 — what are you going to do, quit your job? No, probably not.
Unless you have no intention of coming back, never walk away from the negotiation. By walking out of the meeting room, after your boss said they couldn’t meet your expectations, only prolongs the process.
7. Use the phrase “does that make sense”
Sounding confident in negotiating is an obvious requirement, after all, everyone is there to meet an agreement on whatever you’re negotiating — be that a sales negotiation or a pay rise. Using filler words including “like” and “does that make sense” makes you sound like you’re seeking approval on something you’ve just said.
Whoever you’re negotiating with is most likely looking for confidence from you, just as you are them, and the last thing you want is an investor or potential client doubting you.
Does this make sense?
8. Agree to something straight away
Before a negotiation even starts, you’ve probably planned out the ideal situation in your head — be that the final price of a sale or a contractual agreement. Even if, 5 minutes into the meeting, your counterpart has said your desired outcome, don’t agree straight away.
Instead, respond with either “Let me get back to you on that” or “Let me see if that’s possible.” By doing this, you’re making sure you’ve covered all ground, since the chances are, your preferred outcome is most likely their lowest offer.
By bargaining more time to reflect on their offer, and what you thought was your ideal outcome, you can now make sure there isn’t anything missing. The moment you agree with Lindsey when she says “Let’s do $25,000,” there’s no going back, it’s definite.
By agreeing immediately, you could walk away feeling dissatisfied because there probably was wiggle-room for you to get more from the negotiation.
Basically, take your time. Evaluate all areas. And don’t let Lindsey do you over.
9. Cling on when all hope is lost
Sometimes, things just don’t work out. As frustrating as it is, at any point during a sales negotiation it’s possible to reach a point where an investor or client is simply asking too much of you or they’ve got cold feet and things just fall flat.
If this happens, especially at the closing stages of a negotiation, most people’s first instinct would be to scream “Don’t give up now, we’ve come so far!” but this won’t do anything other than pushing your investor or client further away and even potentially damage an existing business relationship.
Simply pick up your pride, keep your dignity, and move onto another investor or client and keep the relationship strong. After all, they’ve probably made a mistake, right?
For most people, negotiating doesn’t come naturally — it’s a skill that deserves careful attention and a lot of trial and error. But having negotiation skills won’t just land you the perfect sale or contract, it’s a transferable skill making you sound confident, knowledgeable, and trustworthy.
Get the TNW newsletter
Get the most important tech news in your inbox each week.
