Negotiation Skills: 6 Techniques Every Manager Should Master

Key highlights

• Top 6 negotiation skills that every manager should master are effective communication & active listening, emotional intelligence & empathy, strategic planning & preparation, problem-solving & conflict management, persuasion, influence, & building trust, and making strategic concessions and counteroffers.

• Managers have to do negotiation every day, either on deadlines, targets, expectation or budgets.

• Good negotiation skills does not mean winning every argument. Rather it means reaching to a conclusion benefitting both parties.

• In this blog, you’ll learn about negotiation skills, the ten techniques every manager should know, two main strategies, five stages of a negotiation and practical ways to improve your negotiation skills.

Do read: How to Become a Manager: 7 Steps to Start Your Career Path  

What Are Negotiation Skills and Why Are They Important for Managers?

Negotiation skills are the abilities which help you reach an agreement where both sides accept the decision. Since a big part of being a manager means a lot of negotiation in day-to-day life. Hence, it's very important for managers to acquire this skill. Good negotiation starts with understanding what both parties want and what can be done in the scenario. Then come up with a strategy to balance the negotiation so that both parties agree to it.

Here are the reasons why these skills matter so much for managers:

• Money and resources. A better vendor contract or budget split goes straight into your results.

• People. How you handle a raise request or a team conflict decides whether good employees stay.

• Time. Clear agreement reduces the time spent on back-and-forth discussions.

Also read: 10 Major Leadership Theories for Workplace Success  

6 Negotiation Skills and Techniques Every Manager Should Master

Here are the most important 6 Techniques Every Manager Should Master:

1. Effective Communication & Active Listening

Communication always starts with active listening. When you listen and understand what the other person is saying, you can respond better. This means listening to their arguments and also understanding what they are trying to say. State your opinion straightforwardly. Do not use vague terms. 

Communication is a two-way street, and you can master this only when you listen to others intently. You can negotiate well when you are able to communicate clearly. 

2. Emotional Intelligence and Empathy 

Someone with emotional intelligence always reads the room before they respond or react. It gives them the benefit of understanding the mood of the other person so that they can react accordingly. The better you can handle your emotions, the more you can counter the other person’s arguments.

Anger causes people to dilute their logical capabilities. Hence being emotionally aware along with having empathy helps you to get to a conclusion better. 

3. Strategic Planning and Preparation

Before you enter the room for negotiation, begin by defining the following three things. Your goal, your minimum goal, and your bottom line. Also include your best alternative in case negotiations do not work, often called BATNA. 

When you prepare for a negotiation, you have better counteroffers.

4. Problem-Solving and Conflict Management

Focus on what is required to manage the problem. Don't treat the other person as the problem. It creates conflict. 

Treat the issue as a shared responsibility and not an individual one. So that it doesn't become an ego clash. Focus on facts rather than emotions. Take in consideration what each one’s expectations are. 

5. Persuasion, Influence, and Building Trust

You have to use facts to persuade people. And trust always comes with transparency. Keep the promises you make. And do not commit to everything and anything. This will not make your words unreliable. Hence, agree only when you can keep the promises. Reply when you said you would.  Keep your small promises. 

Ask about your teammates. Show genuine interest in their work problems. Care about them. These will build trust automatically. 

6. Making Strategic Concessions and Counteroffers

Never give something for nothing. If you reduce prices, ask for a longer-term contract. Reduce your concessions gradually, indicating that you’re reaching your bottom line.

When receiving an offer you can’t accept, don’t respond with a simple “no.” Respond with an alternative and a reason why, keeping the discussion going.

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What Are the Different Types of Negotiation Strategies?

There are two main types of Negotiation Strategies:

Distributive Negotiation 

In a distributive negotiation, one side will win, and the other side will lose. Every gain for you represents a loss for the other party. Price is generally the only consideration at stake. For example, the purchase of a second-hand delivery van or the sale of some piece of equipment just once falls under this scenario. 

It would be very unlikely that you will ever do business with this person again, so the personal element of the transaction has no value.

This transaction scenario applies to the following criteria:

• Only one significant issue to resolve, usually price.

• No future relationship.

• No point in exchanging information.

The only problem is if you push too hard, the other side is gone. If you push too soft, you lose money. So you have to do research to get your negotiation better.

Integrative Negotiation

It isn't free of problems. This requires more time and, of course, integrity. Otherwise, one cannot form reasonable compromises, and the discussion will again become nothing but price negotiations.

The goal of integrative bargaining is to uncover the possibilities of exchange that would benefit each party. Suppose that your software vendor is looking for a long-term agreement, and you need a reduced rate.

As a solution, you offer three years of business for a fifteen percent reduction. Both parties sacrifice less valuable resources for something more valuable.

This approach applies to circumstances that have the following characteristics.

• Several items being negotiated

• A continuous relationship

• A willingness to share preferences

Also read: What Makes a Good Leader? 10 Essential Qualities and Skills   

What Are the Five Stages of Negotiation?

A negotiation goes through five stages. 

Here are the five stages:

Must read: Leadership Management: Meaning, Skills, Styles & Importance   

How Can Managers Improve Their Negotiation Skills?

For managers having Negotiation Skills are a must. So how to improve it? 

Here are a few steps to improve them:

• First, prepare for negotiation mentally. Think of all the points you have. Keep your counterpoints ready for what they may say. 

• Think about your past negotiations. How you managed it. How you persuaded the other party. And what can you do better next time? 

• Build your confidence. You can role-play with someone you trust. Take feedback from them. This will help you to hone your skills.

• Learn from your seniors when they negotiate. See how they manage the situation. 

• Read about negotiations. You will gain knowledge and some insights.

• Start with low-stakes negotiations to help you practice in real life.

• Take hold of your emotions. You may feel anxious or you may overtalk in few hard ones. But that's okay. It will teach you how to do hard negotiations.