The Different Approaches to Negotiation
Negotiation is a complex process, with many competing ideas about the perfect approach. Choosing the most effective strategy relies on your knowledge of the other party as well as their tactics, motivations, and walk-away point.
The Take It or Leave It Approach
This is an aggressive strategy that can be effective if one party is in a stronger position. As the name suggests, it involves making your offer and threatening to walk away if your terms are not met. This approach can be useful when it's essential that certain terms are met, or if a deal needs to be made quickly. The danger with this approach is that it can leave the other party feeling they have been strong-armed into a decision and damage business relationships in the long term.
The Only Asking for What Is Fair Approach
This approach takes the pressure off you to defend your position because you're asking for what is in line with industry standards. The other party must then find a compelling reason why they cannot accept these terms. The limitation of this approach is that it does not leave much room for flexibility. The other party may walk away if they feel your offer is unacceptable and you're unwilling to discuss alternatives.
The Offer-Concession Approach
A style of compromising negotiation, this approach focuses on building goodwill from the other party by making concessions that are acceptable to you. By making small concessions, you're encouraging the other party to reciprocate. The other party will leave satisfied that they have come away with a good deal if they feel that you have gone back and forth to find a compromise that's close to their desired outcome. Exercise caution however, make sure you know your bottom line and don't make damaging concessions just to close the deal.
The Getting to Yes Approach
First published in 1981, Getting to Yes: Negotiating Agreement Without Giving In, revolutionized the world of negotiation by suggesting that effective negotiation was not about trying to win but about working to find a solution that benefited both parties. Also known as mutual-gains or integrative negotiation, this approach focuses on creating value for both parties through open communication and concentrating on interests, not positions. This collaborative approach is now considered by many to be the gold standard for negotiations.
Whichever approach you choose, contract presentation is always a key component of successful negotiations. A good-looking contract is a great way to make sure your negotiations get off on the right foot. Make it clear and detailed, and use a PDF file merger to keep it looking neat and professional.
Preparation is Key to Choosing the Right Approach
No two negotiations are alike; personality, hidden motivations, lack of authority are just a few examples of factors that can have an impact on proceedings. Prepare as best you can by researching the other party and choosing an approach to suit.
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