Negotiation – What Is A Negotiation?

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Negotiations are an important part of our everyday lives – both professionally and privately. You can negotiate with your employer about a raise, with business partners about important agreements, and with your friends about what to do when you meet. But what exactly is a negotiation, and what is required to achieve a successful result? That’s something we’ll go through in this blog post.

What is a negotiation?

Negotiation is a process in which different parties try to reach an agreement. Negotiations are used in many different contexts – for example, in working life, in private contexts, in conflict resolution, or when several parties want to agree on a collaboration. The result of a successful negotiation process is that all parties feel that they have reached a favorable agreement.

In professional contexts, negotiations take place, for example, in sales processes, in agreements between suppliers and buyers, and in connection with collaborations between companies. This type of negotiation often requires a good strategy with good knowledge of the industry in question as well as the participants’ positions and backgrounds.

You can also negotiate in private contexts. For example, it can be about the price of a used car. In some cases, you as a private individual even have the right to negotiate. For example, the Act on Co-determination in Working Life gives employees and trade unions the right to participate in decision-making and negotiations concerning issues that affect the work environment and the workplace, such as terms of employment, pay, and working hours.

Different steps in a negotiation

Depending on what is being negotiated, the process can be divided into different stages. Some negotiations can be completed in seconds. In other cases, it can be a lengthy strategic process that takes a long time. It simply depends on what is to be agreed upon, how much is at stake, and whether you need to compromise a lot.

In general, however, the negotiation process is divided into three phases:

1.   Preparation

Before entering a negotiation, some preparation is required. This may mean, for example, that you define what the negotiation should include, set goals and alternative goals, prepare arguments and do relevant research that can support your position.

A definition of the negotiation should include helping all parties involved to understand what the goal of the negotiation is. For example, it may be that you must agree on terms, prices, or what a collaboration should look like.

It may be wise to gather relevant evidence that can strengthen your arguments. It clearly shows that there is evidence for what you are arguing for. In many cases, preparation may also involve putting together visual material for the negotiation phase itself. For example, if you base many of your arguments on data and statistics, it can be beneficial to complement your words with visual elements.

Since negotiation is very much about give and take, it may also be wise to consider what counter-arguments other parties may present. In this way, you can stay one step ahead and already set limits in advance for what you can compromise on and not.

2.   Negotiation phase

During the negotiation phase, it is time to reach an agreement. In this part, all parties present their arguments, and they agree together on what is possible with the given conditions.

The negotiation phase can be seen as a bit of a balancing act. All parties must be prepared to give in and compromise on certain points in order to be able to make demands on other points.

Once the negotiations begin, all parties must be clear and concrete with their demands and expectations. Everyone should also be given a fair chance to put forward their views and arguments.

This is a moment that can sometimes arouse strong emotions. For some it is nervousness, for others there may be a lot at stake. The main thing is to keep a good tone and respect the different positions of all parties involved. In this way, it is easier to come up with a solution that works in practice and at the same time benefits everyone.

3.   End phase

A negotiation is not complete until a decision has been hammered. In most cases, all parties sign a contract that clearly states what has been agreed. Until then, the negotiations are still ongoing, and things can change. It is therefore important not to charge anything in advance.

Succeed in your negotiation

Successful negotiations are often the result of a large dose of skill and a good understanding of the situation of all parties involved. For example, a skilled negotiator often has a well-thought-out negotiation strategy as a guiding star but gradually analyzes the course of the negotiation to be able to make any adjustments during the negotiation.  This makes it easier to achieve your own goals even if the conditions change during the process.

However, it is equally important to remember that the overall objective of a negotiation is to find a solution that is beneficial to all parties involved. If you strike a balance between achieving your own goals without other parties feeling that they are losing anything – then you have succeeded in your negotiation!

Do you want to learn more about how you can increase your chances of success with a negotiation? Explore our Revenue Mastery Program that covers everything you need to take your sales and negotiation skills to new levels. We have also collected 15 tips on how to sharpen your negotiation techniques here.

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Simon Blanche