Updated: Jun 21, 2021
Step 1: Prepare – The first step in the negotiation process is to ensure that everyone is ready for the actual negotiation. Before you begin negotiation walk through the steps in your mind of what you are going to do, and think of different situations that may occur and how you are going to handle them. If you need to, do some research beforehand. For instance, if you are preparing to buy a washer and dryer, you may want to read some reviews online or check out some price points of models that are available to see how low you can negotiate your price.
• Know what you want from the process. Make sure you understand the needs of the people involved and be able to understand different positions and interests. Know your priorities and be able to identify boundaries.
• Determine how to get there: Know what resources you can tap into, develop a strategy that you can work with, and have a walk-away position.
• Set a time and place: Once you have all the information you need, set up an appropriate time and place for the negotiation to take place.
Step 2: Open— In the opening stage of the process, you will identify your needs with the other party.
• Be confident and demonstrate to the other party that you know what you are doing.
• State your case: state your case by painting the context of your negotiation, verify what you need and what you want as a result, and position yourself to frame the outcome appropriately.
Stage 3: Exchange Views—Some people can refer to this as the “arguing” stage, but it is more appropriate to say that you are simply exchanging views with the other party. In such instances as a collaborative negotiation, the arguments may be gentle and polite, so it all depends on the situation the negotiation is taking place.
• Respond to the other party’s views or argument by minimizing their benefits to you, weakening their argument, or managing their needs all the same.
• Strengthen your argument by maximizing the benefits for them, strengthening your truth, and legitimizing your needs.
Stage 4: Explore— In the exploration stage, usually no agreements have been made other than early positioning. Both sides have established what they want, and now they can both move forward to reach an agreement.
• Find areas where you both agree. Both parties can agree on some things, so make sure to find areas of difference that can be amplified into agreements.
• Once you know where you agree and disagree, then you can work to find ways to reach an agreement by looking into criteria and outcome.
• Move forward by seeking variables, managing information, and keeping your main goal clear and flexible.
Step 5: Signal—The phase of signaling in the negotiation process is when both parties let it be known that they are ready to move forward with their position. Signaling indicates the willingness to negotiate certain terms.
• Show the other party that you are ready to move forward, wait for their signal, and move towards concession.
Step 6: Package – In this stage, the negotiation has not yet been finalized, and both parties may still be determining and dealing with various possibilities. It is important to keep a feeling of openness so that it will be easier to consider different options and exchanges without having either party feeling tied down to a decision yet.
• Identify agreeable trades and put together potential agreements.
• Make proposals that offer concessions.
• Have your trade package ready that you believe satisfies both sides of the table.
Step 7: Close – The closing portion of the negotiation process signals that you are moving towards a complete solution and getting ready to close the final deal.
• During this, you will agree on the details and confirm the agreement.
• Usually when you confirm the agreement, you will sign a legitimate contract. However, closing a negotiation deal can also be shaking hands, or agreeing to what has been said.
Step 8: Keep your word – The final phase of the negotiation process deals with sustaining your terms of agreement. In sustaining your agreement, you ensure that the commitment stays closed and each party adheres to what they promised. Make sure both parties keep their promises and are ready to renegotiate if need be. Here are some techniques to use in the negotiation process to ensure that both parties sustain their agreements:
• Burning bridges: Ensure there is no way that either party will back out of the negotiation.
• Evidence stream: Show whomever you negotiate with that the change they want to take place is happening.
• Golden handcuffs: Keep key people in the process around with delayed rewards.
• Involvement: Give each person who is important to the negotiation an important role.
• Reward alignment: Align the rewards with the desired behaviors or actions that you want to see take place.
• Rites of passage: Use formal rituals to confirm change is taking place.
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