Negotiation is an essential skill in both business and personal life. However, even experienced negotiators can fall into common traps that undermine their effectiveness.
Our research showed that skilled negotiators have a low perception gap in their behaviours, or in other words, they are aware of what they were doing. If we took that idea one step further, skilled negotiators are using the right behaviours at the right time.
The first step in development is to be aware of what needs to be done differently and the second, is understanding how to do it. As you read through this blog, reflect on your own behaviours, and/or the behaviours of your team. Think to yourself, do any of these sound familiar? You’ll also find guidance and strategies to overcome them.
The top 5 common negotiation mistakes
1. Underestimate the other party’s power
Power is in the head. If you go into a negotiation believing you don’t have power, you will not behave powerfully. Or in other words, if you feel powerful, you will behave powerfully, and this can impact the other party's perception of their own power.
We work with sellers, buyers and procurement teams. A common theme is that most participants feel as if they have less power than the other party. How can this be, if all the parties across the table feel they are in a weaker position? Simply put, it can’t. This is down to a mindset issue, rather than based on evidence.
We’ve found that reflective questions help to challenge the mindset and increase awareness of your situation. Power comes from a few areas, consider:
- What is your competitive situation – can you differentiate yourself from the competition?
- Do you have alternative options with whom you could make a deal? E.g. other buyers / suppliers
- What about your negotiation skills – when was the last time you improved the skills you use before and during a negotiation?
First, you need to understand the power balance and then plan how to shift the power in your favour.
2. Give things away for free to get the other party to make a deal with them
A common trap for negotiators is giving things away without getting anything in return. How often have you received something for free, to then later never use it? As humans, we put less value on something that is given for free than something that is paid for.
In my previous role, I used to run employee training days on outdoor equipment. Brands would kindly offer products to the staff afterwards for free. I would then hear mixed reviews about these items, like “If only it was this style/colour instead.”
One day, a brand did something different. For those who didn't want to buy it, they could return the items after the day out on the hill, but those who did could buy the item they wanted for a significantly reduced price. Nearly all the staff purchased items, and the feedback was overwhelmingly positive. Employees were amazed they could buy something at an 85% discount. The brand put value on the items, even if nominal, and it reinforced the value the employees were getting.
In business negotiations, it is slightly different, but the idea remains the same. Don't give things away for free, trade them for something – ideally for something that you value. Giving things away in an attempt to persuade the other side to do a deal with you becomes ineffective.
By giving it away, the other party doesn’t value it. They may want more or not see what you have offered as of any value to them. Demonstrate that any move away from your original position costs you. If the other party is looking for a discount, in return for what? If they increase volume, a discount could be appropriate.
Again, reflective questions are the way forward here. Link issues together, focus on trading what you value for what they value. This will create movement from both parties that creates mutual satisfaction.
- How do you get to your agreement?
- Do you concede to the other party’s proposals, or do you only move when the other party agrees to move as well?
Interested in learning more about these common negotiation mistakes? Watch the webinar
3. Having a combative mindset
Another common negotiation mistake I see is when negotiators view the negotiations as something they should approach with aggression.
Yes, there are often areas of disagreement between negotiating parties, but there are also areas of agreement. By not focusing on these areas of agreement, the only thing left is to focus on the areas of disagreement. This can put both sides at odds, if – and it often is – paired with aggressive language, it results in a breakdown in the relationship and results in deadlock.
When getting ready for a negotiation, focus on the areas of agreement between you and the other party and consciously raise these points at the start of a negotiation. This will create a positive climate that you can refer back to when, inevitably, the negotiation turns to the areas of disagreement.
Focus on the issues and don't make it personal. Our research found that skilled negotiators avoided using verbal behaviours that went after the individual, rather than the issue. We call this a Defend/Attack behaviour. For example, "It's just typical of you to come up with such a preposterous idea." Instead, focus on explaining the reason why you disagree with the idea. For example, "Because of the changes in the market and the increased availability of competitor products, I cannot agree with your price increase."
In your next negotiation, identify areas of agreement between you and the other party, and then highlight these at the start – and throughout – your negotiation. Reflect on previous negotiations:
- Have things become personal?
- Have you used Defend/Attack behaviours?
To use less of this behaviour, focus on doing more of something else. Explain why you disagree with the issue to avoid bringing in the other party personally.
4. Close down rather than open up discussions
Related to the previous point, disagreeing certainly is part of negotiations, but disagreeing should not happen as much as people believe.
Time, goodwill, and climate are all negatively affected when disagreeing becomes the focus of a negotiation. Without resolving the disagreement or more effectively navigating the disagreement, deadlock can occur – or the negotiation will take longer than is necessary, maybe with both parties feeling less than satisfied with the outcome and/or the relationship.
A natural reaction to hearing a proposal is to first think, do I like it? Yes or no? When focusing on areas of disagreement, the answer is usually no, and the common response is, ”No, I don't agree, and let me tell you why…”. The common result is the other party then explains why they are right, often followed by multiple reasons. This goes back and forth, without any movement from either party, which can lead to deadlock.
Skilled negotiators, rather than giving multiple reasons why they disagree, focus on one or two of their strongest reasons.
Additionally, they focus on opening up the dialogue and they do this in two ways. Firstly, they share their feelings in reaction to the other party's proposal or argument. For example, they use adjectives like surprised, shocked, disappointed or unhappy. These feelings let the other side know what is going on internally and it is difficult to disagree with how someone is feeling.
Skilled negotiators seek to understand more about the other party's proposal with questions like, “Why are you saying this?” or “What sits behind this?” to understand the motivating factors that has led to this decision. This can help to open up the conversation and explore alternative options. The original proposal can't be met, but the underlying interests could be met.
If you find yourself closing down discussions instead of opening them up, here are some reflective questions you can ask yourself.
- How often do you share your feelings (both positive and negative) during negotiations?
- Do you fall into the trap of giving argument after argument to the other party?
- Is this ever effective in getting the other party to change their mind?
Think back to the previous point, if you can't do something, be clear about it. Explain why – give the reason (not multiple reasons) first and then your statement of disagreement.
Consider asking more questions to understand what sits behind the other party's proposal to find areas that you can work with.
5. Start bargaining too early
I often see negotiators forget about their planning, or worse, they haven't done any planning and just launch into their first proposal minutes into a negotiation. This often results in both sides being caught in a washing machine of disagreements. Both parties are trying, and failing, to convince the other party they are right, accusations that the other party is being unreasonable, and yet further explanations of how reasonable they are being follow. In the end, both sides are using unpersuasive behaviours.
Avoid this trap by reviewing how you get ready for a negotiation. Think about the structure of a negotiation, before you get to putting your first proposal out there. First, set the scene for the negotiation. Focus on those areas of agreement I discussed in point #3. Highlight these to the other party.
Establish the objectives and agenda for the negotiation – both yours and theirs. Then consider what information you might want to understand from the other party. Have they lost a key supplier recently? Has their market position changed? How can you effectively highlight the other side’s weaknesses and your strengths? This will impact the balance of power in the negotiation. There might be some exploration of the other party's interests and what sits below the surface of their proposals.
Once these points have been highlighted and/or clarified, this can set you in a better position when bargaining. You will be able to understand more around what the other party might want, establish there are benefits to both parties if an agreement is reached and potentially will have shifted the power in your favour ahead of the most crucial stage of the negotiation – bargaining.
In order to avoid bargaining too early, ask yourself these reflective questions to find the way forward. Effective negotiation starts with how you get ready for it.
- How do you prepare?
- Do you spend your time gathering the facts and figures or planning what to do with this information?
I’ve experienced many negotiators who pride themselves on their numbers, which do have a place, but having the numbers without planning what you’re going to do with them becomes ineffective. Focus your attention on what you will do with the information you have gathered and create a plan that you can follow during the negotiation. Remember, set the scene, exchange information, then get into the bargaining stage.
Final thoughts
I was speaking with a participant around his challenges in negotiations. The participant stated their counterparties are always focusing solely on price. It’s the first thing they bring up and the only issue they discuss. After discussing some behaviours and strategies around how to manage this, I observed them in a negotiation simulation – and noticed that this participant was the one who continually came back to the price. After I gave the feedback, the participant had a realisation and said, ‘Maybe it isn’t the other party that always focuses on price, maybe it’s me!’ The point is, sometimes, even the most experienced people are not aware of all the behaviours they use.
Self-reflection sometimes isn’t enough. Being able to have an accurate understanding of the behaviours you are using will help you to become more effective in future negotiations.
By avoiding these common negotiation mistakes, you can significantly improve your negotiation outcomes. Remember, effective negotiation is a skill that can be learned and refined with practice and awareness. How did your last negotiation go? Negotiation is a skill and like any skill it can be developed. If you want to learn how to adopt the behaviours skilled negotiators use to become more effective in your negotiations, get in touch so we can help you to find the learning journey that best suits your or your team's needs.
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