Negotiation: It’s Not a Dirty Word
To haggle, barter, liaise, or come to terms are all words or phrases synonymous with or related to negotiation. Yet, despite the prevalence of negotiation in the language, many people have an aversion to the process.
A 2017 PayScale survey polling 31,000 people found that 57% of participants never asked for a raise in their field. Nearly half of those participants stated discomfort, lack of confidence, and negative public perception as reasons for not asking for a raise or negotiating their salaries.
The aversion to negotiations is robbing people of potential income and savings. A savvy negotiator can debate better terms for:
- Rent
- Auto purchases
- Cable and internet
- Cellular plans
- Health care
- Event spaces
- Credit card fees
- Travel
Yet, confidence is a significant part of negotiations. A lack of confidence leads to mistakes. When negotiating, you must know your worth and the value of your stance. Establishing a convincing argument for compromise is about leading the conversation and avoiding predictable pitfalls.
Common Negotiation Mistakes
Like accidents, mistakes happen. Mistakes in negotiation will have financial and contractual consequences. You must hone your skills to avoid common pitfalls while negotiating to reduce the risks of an unfavorable outcome. The most common negotiation mistakes include:
- Lack of preparation
- Viewing talks as competition
- Ignoring micro details
- Losing moral ground
Most people fail during negotiations because they do not prepare. Preparation is about knowing the interests of both sides. If you completely understand the topic, including all interests, you can better argue and defend your point, resulting in potential concessions.
The loss or gain of value during negotiation can make the entire process feel competitive, but it is not a competition. Negotiation is a compromise or a cooperative effort to find a beneficial arrangement.
When people get competitive, they often lose sight of the micro details of a contract, focusing all efforts on the macro points, such as salary over time off, travel, or other benefits.
A negotiation is emotional and includes high stakes for both sides. The more you have invested in talks, the more tempting it is to make questionable choices, such as misrepresentation or selective disclosure. Remember, no result is worth sacrificing your character.
Essential Negotiation Skills: ZOPA and BATNA
Two terms essential to negotiation are ZOPA and BATNA, both acronyms. ZOPA refers to the zone of possible agreement, meaning the areas of a negotiation where there is room for concession. Preparation and discussion are the only ways to define potential areas of give-and-take.
The BATNA is the best alternative to a negotiated agreement. Essentially, BATNA refers to your backup plan if negotiations fail. If you are negotiating a car price and the dealer refuses to budge or provide any concessions, the BATNA would refer to your choice to walk away or purchase.
Do not confuse BATNA with an ultimatum. Ultimatums are counter to compromise. Despite your best efforts, salespeople, executives, property managers, etc., sometimes cannot concede to more favorable terms.
Learning to haggle, barter, or come to terms before signing contracts or making purchases can result in savings and earnings potential. Still, you do not want to enter discussions lightly. The keys to effective negotiation are preparation, knowing your worth, and understanding the other side. If you acknowledge potential zones of agreement but maintain the confidence to stick with your best alternatives should compromise fail, you will represent a strong and clear voice in any contractual or business conversations.