Contract Negotiation Techniques: Everything You Need to Know
You should learn contract negotiations techniques to maximize business opportunities that could grow your business. Outcomes from contract negotiations have a large impact on how well your business performs. 3 min read
You should learn contract negotiations techniques to maximize business opportunities that could grow your business. Outcomes from contract negotiations have a large impact on how well your business performs. Regardless of your profession, you must negotiate in some capacity. You may be required to negotiate in the following instances:
- Developing structured agreements
- Agreeing on travel itineraries
- Selling a company
Before reaching a business agreement, you need to negotiate first. To get the best deal possible, you need to sit down with other parties involved and work out the details of an agreement. If you’re new to the world of contract negotiations or need to be reminded of core negotiation concepts, you should review some important strategies. Certain negotiators may believe that hard tactics are essential to success and many make the mistake of engaging in unrealistic demands and outright threats to finalize a deal.
Negotiators who rely on such tactics demonstrate a lack of knowledge about the gains in achieving successful negotiations. When negotiators use hard tactics, they only view such negotiations within a win-lose confine.
Business negotiations that only pertain to a single issue, such as price, could be viewed as a win-lose negotiation. With that, business negotiations involve multiple aspects. Therefore, so-called integrative negotiations allow parties the chance to forge win-win end-goals or agreements that benefit all parties. Negotiators may negotiate by thinking of creative strategies that spot differences in preferences that could be useful for building trusts or tradeoffs.
Moreover, parties tend to resort to harsh negotiations, and they risk missing vital benefits. The opposing party is also more likely to respond in a harsh fashion. To stop negotiations from falling apart due to hardline tactics, you need to form a commitment to yourself not to engage in such strategies. You should also remember that there are better alternatives when it comes to obtaining your goals.
You do need to prepare for hard tactics that may come from the counter party. To accomplish this, you must identify what they may demand.
In general, when it comes to negotiations, you are better off in the long-run if you can spot demands and defuse issues beforehand.
Watch out for the following 10 commonly-used hardball strategies:
- 1. Harsh demands and slow, small concessions: The most common of hardline tactics, this strategy protects a dealmaker from conceding too hastily.
- 2. Commitment tactics: Opponents will mention that their hands are tied or that they only have a limited ability to negotiate. Do what’s possible to find out if such commitments are true. You may discover that you have to negotiate with someone with more authority.
- 3. Take it or leave it: Such offers should rarely be non-negotiable. To get around such a tactic, ignore it and pinpoint the content of the offer. Follow by making a counteroffer that meets the needs of both parties.
- 4. Invitation of unreciprocated offers: When making an offer, you may discover that a counterparty asks you to concede before making a counteroffer. Do not lower your demands. Rather, state that you await a counteroffer.
- 5. Making you flinch: There are times when you discover that your opponent keeps making more demands, waiting on you to reach a breaking point and give up. Therefore, you should name the hardline tactic and make it clear that you will only participate in a reciprocal offer exchange.
- 6. Ruffling feathers and insults: Personal attacks could reveal insecurities on your part, making you more vulnerable. If this occurs, take a break, and tell the opposing party that you will not tolerate cheap stunts and insults.
- 7. Lying or bluffing: Misrepresenting the facts or exaggeration may catch you off guard. You should be wary of claims that are too good to be true and you should scrutinize such claims more closely.
- 8. Warnings and threats: The first in dealing with threats is to identify them. After, you should ignore them as a way of defusing such heat.
- 9. Making light of alternatives: The opposing party may attempt to force you to concede by belittling your alternative offer. If this happens, do not yield and maintain your position.
- 10. Good cop, bad cop: When squaring off in a two-person team, you may discover that one plays the tough guy, while the other is more accommodating. You must realize that they are working in unison, and it is another ploy.
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