Negotiation Process: How It’s Done in 8 Steps

negotiation processSay you want to buy a used car, dispute an unfair credit card charge, or score backstage passes to one of your favorite bands.  What skills are you going to use?  Looks like you are going to need to know a little bit about the negotiation process and the steps needed to execute a successful negotiation.

Knowing how to negotiate can come in handy in all types of different situations.  Whether you are working in business or doing daily errands, the negotiation process is going to be the same.  In this post we are going to go over an 8 step negotiation process that combines some of the most effective and efficient approaches to negotiation to ensure that you come to a favorable end agreement.

Steps of the Negotiation Process

Step 1: Prepare – The first step in the negotiation process is to ensure that everyone is ready 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 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 whoever 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.

These will differ depending on the type and form of negotiation that you are executing.

negotiation processUseful Negotiation Skills

Good interpersonal skills are essential and useful for effective negotiations in both formal situations, in less formal or one-to-one negotiations.  Let’s take a look at some skills that you may want to whip out when dealing with negotiating.

  • Effective verbal communication.
  • Listening skills to reduce misunderstanding.
  • Rapport Building to build stronger working relationships between the people you are negotiating with based on mutual respect.
  • Problem solving skills.
  • Decision making skills and techniques.
  • Assertiveness to show your partners and the other party that you feel strong about the process.
  • The ability to deal calmly and rationally with difficult situations.

Tip For Successful Negotiations

  • Present your arguments clearly, concisely, and with confidence to avoid any confusion or unnecessary conflict with the other party.
  • Remain Calm during the process.  Avoid losing your temper if discussions become heated or if things do not go your way.
  • Be aware of any verbal or non verbal communication cues that are demonstrated by the other party.  Watch for body language and other non verbal signals between partners.
  • Try your best to remain sensitive to the needs and concerns of those who you are dealing with.
  • Always conduct negotiations with a diplomatic spirit.  Have your ultimate goal in mind, but attempt to seek mutually beneficial agreements to keep both sides happy.
  • If there is tension, look for ways to reduce it.

Start Negotiating Successfully

The negotiation process can be a tiring one.  It is important to keep yourself in good spirits at all times.  This will also help your other party trust your judgments and attain good vibes from your side.  Try adopting a sense of humor as well.  For more help on how to be a significant negotiator, enroll in this course to help strengthen and develop your negotiation skills.