Negotiate strategically, not tactically

Ronen Menipaz


I know the title sounds like a decent mix of eye-catching buzzwords but negotiation is part art, part science.

There is finesse in this proverbial tug of war that ultimately makes a difference:

one between negotiating for success and negotiating for a win.

As a vital part of doing business, it’s very easy to think negotiation is about tit for tat. It’s not. 

Negotiation is about creating long-term, fruitful relationships, which is why it should be approached strategically.

What happens when you negotiate tactically

Perhaps I should start by explaining the difference between strategy and tactics, just so we’re on the same terms.

Strategy is an all-encompassing plan or set of goals while tactics are specific actions or steps you undertake to fulfill your strategy.

By being tactical, you’re going for the sale, for that business deal. Your mind is solely focused on negotiation and its outcome.

The problem with this approach is that it limits you with inflexible plans. Negotiation is a dynamic, interactive process where the master players are strategically agile, quick to think on their feet when the moment requires it.

Another important aspect we need to acknowledge here is that most people treat negotiations as ‘win or lose’ scenarios.

When you treat negotiations like that, the entire process adds strain to your psyche. Nobody likes to lose. The fact that you’re aware that the person sitting across you is probably as resolved, smart, and unpredictable as you are doesn’t help. You can’t control them just like they can’t control you.

Luckily, only a small percentage of business negotiations are like that: focused on only one issue (e.g. price). Far more common are the instances where multiple issues are on the table, which creates possibilities for mutually beneficial agreements.

In other words: more win outcomes for both sides.

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However, to leverage opportunities for those scenarios, an entrepreneur must press their mental switch and focus on crafting a value-creating negotiation. They have to be willing to engage in bargaining aimed at generating a satisfactory outcome on more than one level.

This is where the strategic part comes into play. 

Why negotiating strategically is better

Approaching negotiations strategically implies looking at the big picture.

You need to expand your focus by looking for long-term rewards in return for a short-term concession. Your endgame is at the center here. By looking beyond the immediate future, you are able to identify new sources of leverage and opportunity in a negotiation.

When I go into negotiation, I’m extrapolating how strategic the person in front of me is.

Maybe they can help me bring in the next deal. 

Maybe their product or service is so diverse it allows me to try new things with it. 

Maybe they are easy to work with, which might actually help me grow afterward (e.g. turn me into their only supplier).

Maybe I’d be better off losing this negotiation and being branded as a sucker, which could provide me leverage for the next deal.

There are multiple, creative ways you can extract value in every negotiation. In this instance, the price you want to get is not the only win you can achieve. Every time you approach a negotiation, remember these three pillars:

  • brainstorm creative solutions
  • uncover different angles for tradeoffs
  • build trust

Let’s say you are selling your service for $1000. The other side likes you and wants to work with you but their budget constraints mean they can go only up to $700.

What the other side does is relevant to your other clients so you can negotiate a discount for them and accept the offered $700. You can ask to put your logo on their site or maybe have them write something positive about your business in their blog post to get good PR as compensation for the $300 you “lost”.

The beauty of this is that it works both ways. The other side may concede to a short-term tradeoff in favor of a long-term benefit if you present your case right. Why wouldn’t they?

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The key to being strategic is planning…

Planning is 80-90% of negotiation: from knowing if you are going to find yourself in a win-win or win-lose situation to the underlying interests of the opposing party.

With planning, you’re creating a strategic environment that will make it easier for you to succeed. It’s paramount to be crystal clear about your actual goals and needs.

I deliberately say actual because too many times, negotiations fail as people get overly focused on not losing and being taken advantage of, so much so that they forget what their real goals are. They lose track of what matters and become more worried about whether the other side has won.

That’s just stupid but it is what it is. 

Hence, planning is crucial to both reinforcing your strongest points and knowing the advantages to the other person’s argument. The same goes for your (and their) weaknesses.

One thing many don’t realize is that the majority of negotiations lead to a continuing relationship with the other side. So, it’s important to leave the situation with both sides feeling they got what they aimed for. To put it differently: it’s important that the other person doesn’t feel like they lost. Otherwise, you can forget about any meaningful relationship in the future. 

Naturally, you won’t find yourself across a forthcoming and open negotiator every time so it helps to have a min-max strategy: a certain position where you feel comfortable walking away. This means you set beforehand the minimum you can accept to resolve the negotiation, as well as the maximum you can afford to give away. 

… and a full belly too

Because I read up on all-things leadership, something really interesting came up on my Google news feed.

One research found that undergraduate students felt a greater sense of entitlement (the sense that one is more deserving of positive outcomes than other people are) when they were hungry than when they were not.

Entitled individuals tend to behave selfishly and have difficulty taking the perspective of others. They also are more likely than others to be dishonest and to have trouble getting along with others.

When people are hungry, they feel entitled and tend to be focused on their own immediate needs. They behave selfishly and have trouble focusing on anything else, especially the needs of others. In terms of business negotiations, the study’s results suggest that as hungry as we might be to make a deal, literally feeling hungry during an important negotiation could have an impact on the final outcome.

So, next time you go to a parley, make sure you grab a bite beforehand. You never know if the proteins or unsaturated fat can be the edge you need.

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