How to Negotiate Anything

Did you know that 70 percent of people leave money and opportunities on the table because they don't know how to negotiate?

But imagine what it would feel like if you knew how to negotiate a raise, a promotion, or even a better deal on a car and come out on top every time.

The secret lies in mastering the art of negotiation, and most people are missing out because they don't know how to do it the right way.

Hey, everybody, and welcome back to my channel. For those of you who are new, I'm Doug Howard. I'm a leadership coach and a consultant. Here on this channel, we share weekly insights, tools, and stories to help you level up your leadership skills. If you find value in these episodes, don't forget to hit that subscribe button and ring the bell to stay updated on our latest videos.

In this episode, you're going to learn the six pillars of effective negotiation. You're also going to learn a step by step framework that you can use to negotiate anything successfully.

Common Mistakes People Make When Negotiating

Before we cover those areas, let's start by taking a look at the most common mistakes people make when negotiating.

The first mistake is being too aggressive. This approach can create hostility and damage relationships. It often leads to a win lose scenario where the other party feels defeated. The reason people make this mistake is because people often think that being aggressive shows strength and it shows decisiveness. They also believe that pushing hard will make the other person back down.

But this approach actually hurts you more than it helps because this approach alienates the other party, which leads to resentment and a breakdown in communication. It can also damage longterm relationships and reduce the likelihood of any mutually beneficial agreements.

The first mistake is being too aggressive but ironically, the second biggest mistake people make is being too passive. When you're too passive, it often results in not getting what you deserve in the deal. By not standing up for your needs, you might settle for less than you're worth.

The reason people make this mistake is because people often want to avoid conflict and they want to avoid that discomfort and they want to believe that by being accommodating, it's going to make the other person more agreeable. But this hurts you because this approach leads to you being undervalued and underpaid and it sets a precedent that you are willing to accept less, which can affect future negotiations.

Biggest mistake number three, lack of preparation. Going into a negotiation without knowing what you want or what the other party values or what the other party's perspective is or what their stance on the matter is a recipe for total disaster.

The reason people make this mistake is because that they often underestimate the importance of preparation and instead they feel overconfident in their ability to negotiate on the spot. This hurts you because lack of preparation results in missed opportunities, weak arguments, and a whole bunch of things that leave you at a disadvantage in the negotiation.

The fourth biggest mistake people make is focusing only on your needs. Ignoring the other party's needs and concerns can lead to a breakdown in negotiations. People often make the mistake of assuming that their needs are the priority and that the other party will naturally accommodate their needs.

This always hurts you because this approach makes you seem selfish and uncooperative which reduces the chances of reaching a mutually beneficial agreement.

The fifth biggest mistake people make is assuming that the other person thinks just like you. This mistake stems from something we've been taught as children, going way back to kindergarten, we've all been told treat other people the way you want to be treated. But when it comes to negotiation, this is all wrong. The golden rule is useless because in negotiation, you need to figure out how the other person thinks and what's their way of thinking and how do they make decisions. You got to figure out the way they think and then treat them the way that they want to be treated and the way that they needed to be treated.

But people make this mistake in negotiation because people assume that other people share their perspectives and share their values, which misleads them into projecting their own thoughts and values onto the other person. This hurts you because it often results in miscommunication, misunderstandings, and missed opportunities to address the other party's actual concerns and motivations. What happens is you're convincing them in a way that would convince you about this deal, but it's not being presented in a way that convinced them to agree with this deal. In a negotiation, you often have to change someone's way of thinking, but you can't do that unless you understand how the other person thinks.

The sixth and last biggest mistake that people make with negotiations is being the first person to name the price. A lot of people make this mistake. When you name the price first, you lose leverage and you potentially anchor the negotiation at a point that's disadvantageous for you. People make this mistake because they often feel pressured to state their position first, and they do this because they want to appear decisive or because they're eager to get the process moving or because they don't know what to do when the other person doesn't give a price first.

The reason this hurts you is because the person that lists the price first is anchoring. They're setting that first anchor for what the deal is going to be at. But by you anchoring the negotiation, you limit your flexibility. You might set a baseline that's way below what they were going to come out with first.

All of these mistakes don't just fail to get you what you want. They also can harm your relationships too.

Those are the six biggest mistakes people make when negotiating. But now let's take a look at what are the most important pillars of effective negotiation.

Negotiation Pillar #1 - Tactical Empathy

The first one is tactical empathy. This means understanding and recognizing the emotions of the counterpart.

This works because it builds rapport and trust, and it makes the other party more willing to collaborate with you. This is key because when people feel understood, they are more likely to open up and share valuable information with you versus looking like you're at odds or you're at war with each other because then people close down and retreat and pull back from you.

Now the way to use this pillar is by paying close attention to the other person's emotions and making sure that you actually acknowledge and validate the other person's emotions. You do this by acknowledging their feelings without necessarily agreeing to their position. So it's a balancing act that you have to play.

To give you an idea of how this works, let's just say you're in a salary negotiation. You could say something like, I can see how the company's budget constraints are challenging, but let's discuss how we can still reach a mutually beneficial agreement. So when you do that, you're not dismissing the idea that, budget constraints are reality for your manager and for the company. They have money, they have rules they have to follow. There's protocols. There are bureaucratic hoops they have to jump through to get a raise in process or get you approved for a raise. So instead of ignoring that aspect, or instead of trying to talk over it, by calling attention to it, you're showing that you understand your boss's position in that situation and that's key because reframe this as how do we work together to solve this?

Negotiation Pillar #2 - Mirroring

The second pillar of negotiation is mirroring. This simply means repeating the last few words that someone says, or repeating key phrases of what the other person said to you.

This technique works because it shows active listening and it encourages the other party to elaborate and expand on what they mean. When you mirror someone, it also makes the other person feel heard and understood, which is obviously gonna help you build rapport with them.

Here's how you use mirroring. All you have to do is simply repeat or rephrase what the other person just said. Doing this can prompt them to provide more information or clarify their position.

For example, if you're on the hunt for a car and the car dealer says, Hey, this is the best price we can offer. You'd simply respond by saying, the best price you can offer? Now that's going to prompt them to respond and who knows what they'll say. They might say you know what, let me check. Let me go check with my boss to see if this is the best price we can offer and then they might come back with a better price. Or maybe it is legitimately the lowest price they can offer and they can tell you why, I've already taken down this and this is the lowest we can go, but I could look at throwing in some other perks for you, like free this or free that, or we could tint your car windows.

By just simply mirroring that, You're not giving them any context behind what you mean so they're going to sell their hand because they're going to basically project, what they know in their hip pocket. They're going to project that in their response to you. They're going to assume, what they know, and they're going to sell their hand to you just by mirroring back to what they say.

I'm going to give you some more examples of how to use this, but the thing I want you to know right now is use mirroring, which again, is just simply repeating the last few things they said or paraphrasing the idea that they just said to you, in a way that's inquisitive so that it gets them to basically draw out more information for you to use to your advantage in the negotiation.

A couple additional tips on mirroring. Make sure you use mirroring sparingly. If you keep repeating things back to them over and over again, it's going to sound weird and awkward, so you want to use it sparingly to avoid sounding repetitive or insincere. But the best way to use mirroring is by combining it with other techniques like labeling or calibrated questions, which I'm going to cover here in a minute.

Negotiation Pillar #3 - Labeling

The third pillar of effective negotiation is labeling. The simplest way to describe this technique is you're identifying and you're articulating the other person's feelings.

Why this works so well is because it helps diffuse negative emotions and it helps build a stronger connection with your counterpart. When you're labeling, you're acknowledging the other person's emotions, which can help them feel understood and it puts them off the defense or makes them feel less defensive towards you.

The simple way to use this is to use phrases like, it sounds or it seems and you're using these preface phrases to identify and articulate the other person's feelings. This is important. You want to make sure you're saying it sounds like or it seems like instead of I think, or I'm wondering if, by saying it sounds or it seems, you're not saying that it's your opinion. You're saying this is an objective observation and you're giving them the chance to clarify how they feel as well.

For example, you could say something like it sounds like you're concerned about maintaining budget flexibility. Again, just like with mirroring, by saying this gives them the chance to speak up and say, yes, I am concerned about budget flexibility or no budget flexibility is not the problem here. Actually, the problem is we don't have the resources to follow through with this type of plan. Whatever the problem is, this is going to draw out either confirmation of what you're thinking about them or they're going to clarify what the reality is of the situation.

Some more quick tips on labeling. Be empathetic, but don't be patronizing. You want to use labeling to validate emotions, but you don't want to use it to manipulate.

Negotiation Pillar #4 - Accusation Audit

The fourth pillar of effective negotiation is accusation audit. What this means is you preemptively addressing any negative assumptions the other party might have.

This works because it disarms potential objections before they can be raised. By acknowledging possible concerns up front, you show that you're aware of and consider it towards the other party's perspective. The way to use this is by acknowledging the other party's possible concerns and openly addressing them.

For example, if you're in a negotiation for a higher salary with your boss, you could disarm their emotions by doing an accusation audit and saying something like, you might think I'm here just to get a high salary without considering the company's needs. That might be on your boss's mind and by saying that you're calling attention to it and he could respond by saying, no, that's not what I think. I'm actually worried about this. Or he could say something completely different, but by doing that, you're calling attention to it and you're creating that common mutual understanding or giving them the opportunity to clarify what their perspective is on the matter.

Again, all of these techniques are meant to draw out what the other person in the negotiation is thinking and what their perspective is. So that's what we're doing here is we're building out all the data for you to really figure out what is in the way of you convincing this other person to make the decision that you want to make. We're doing this in a way so that we're basically building all the tools you need to build your counter arguments later on.

Some additional tips on the accusation audit. You want to use this technique to show transparency and to build trust but once you find out what these concerns are that they have, make sure you follow up with solutions or compromises that address their concerns.

Negotiation Pillar #5 - Calibrated Questions

The fifth pillar of effective negotiation is calibrated questions. This means asking open ended questions that start with what or how.

The reason this works is because it encourages the other party to engage in problem solving with you instead of feeling like they're at odds with you or at tug of war with you. Calibrated questions help you gather information and help keep the conversation focused on finding solutions.

The key to doing this effectively is by you using questions that prompt the other party to think about solutions rather than you just making demands or statements.

For example, if you're negotiating for a salary with your boss, you can say, what can we do to make this salary increase work for both of us? Instead of making it a yes or no type thing, you're asking how can we work together to make this work for both of us. Now it's reframing this discussion as a problem to solve, and you're actually putting the ball in your boss's court in that situation for him to figure out how to solve the problem versus it being on you to solve the problem. This is how influence and negotiation works. You want them to solve the problem for you because they know what the solution is to the problem instead of you trying to propose what the solution is.

Some additional tips on calibrated questions, avoid asking questions that can be answered with a yes or no because those don't help you learn anything. Instead, you want to use calibrated questions to guide the conversation towards mutually beneficial outcomes. The best way to do that is by asking questions that provoke the other person to look at the situation in a way of solving the problem.

Negotation Pillar #6 - Don't Anchor First

The sixth and last pillar of effective negotiation is getting them to anchor first. What this means is you want to encourage the other party to name their price or their position or whatever their terms are. You want to get them to name that first in the negotiation.

The reason this works is because this strategy allows you to gain insight into the other party's expectations, which allows you to set the negotiation baseline in a favorable range for you. It also prevents you from anchoring the negotiation at a point that's lower than what they're willing to do, which puts you at a disadvantage.

To do this effectively, you want to use strategic questions to prompt the other party to reveal their position first. So if you're in a salary negotiation, you want to ask, what range are you considering for this position? Or if you're in a car negotiation, you want to ask a question like, what's the best price you can offer for this car?

Some additional tips on this. Be patient and resist the urge to name your price first. This is a mistake that everyone makes, but instead, use silence to strategically encourage the other person to speak first.

Negotation Framework

Now that we covered all six of these pillars, let's walk through a step by step framework for how to use these pillars to negotiate effectively.

Step 1 - Prepare

The first step in this framework is preparation. This simply means understanding your goals and the other party's goals. This step is critical because by preparing, it allows you to enter negotiations with a clear understanding of your needs and the other party's constraints, which enables you to make informed decisions and craft effective strategies in advance versus on the fly, when emotions take over.

Before negotiating, gather all relevant information about what you want and what the other party might want. This means brainstorming what their perspective might be. What are their reservations and objections going to be? What potential problems do they have that are going on that might affect this deal? Really take the time to get into the head and the mindset of your counterpart. This includes market research, knowing your value, and understanding the other party's constraints.

For example, before negotiating a raise, you're going to want to research industry standards. You're going to research your company's financial health, and you want to make sure you're crystal clear on your contributions to the company.

For another example, let's just say you're purchasing a car. You want to research the car's market value and then set your budget. Know what can you afford to pay? What's your bottom line that you're willing to go?

Step 2 - Build Rapport

Step two in the negotiation framework is building rapport with the other person. This step is important because building rapport helps you create a positive atmosphere for the other person, which makes the other party more receptive to your proposals, and it makes them more willing to collaborate with you.

You can do this by engaging in small talk and showing a genuine interest in the other party's perspective. You also want to use the techniques of tactical empathy, mirroring, and labeling to create a connection.

Here's some examples of building rapport through tactical empathy. You could say, I understand that this project has been a significant challenge for you and the team. Saying this shows that you understand the other party's effort and dedication.

It sounds like you have a lot on your plate right now. Saying this validates the other party's stress and their workload.

I can see why this issue is so important to you. Saying this acknowledges the significance of the issue for the other person.

It seems like this decision has been very difficult for you. Saying this shows empathy because you're recognizing the difficulty of this decision for the other person.

Here's some examples of how you can build rapport through mirroring. If your boss says, the budget is really tight this year, you can respond with, tight budget? Doing this encourages your boss to elaborate on budget constraints.

If you have a client that says, we need this project completed by next month, you can respond with completed by next month? Doing this provokes your client to clarify the deadline and possibly the reasons behind it.

If your colleague says we're concerned about the project scope, you could respond with, concerned about the scope? Doing this invites your colleague to provide more details about why they're concerned.

Here are some examples of how you can use labeling to build rapport with your counterpart. It seems like budget is a significant concern for you. Saying this identifies and validates one of their key concerns. Or it gives them a chance to correct you if that's not one of their primary concerns.

It sounds like you're worried about the timeline. Again, saying this acknowledges and validates concerns about the schedule or it gives them a chance to clarify what's driving those concerns about the schedule.

It looks like you're unsure about the benefits of this proposal. Saying this openly recognizes, acknowledges, and articulates the hesitation you're seeing from them.

It seems like you're under a lot of pressure to make a decision on this. Saying this validates the other person's feelings of pressure and urgency in this deal.

Some additional tips on building rapport with your counterpart. Be patient, listen more than you speak, and avoid interrupting at all costs. You want to show genuine curiosity and respect for the other party's perspective.

Step 3 - Information Gathering

Step three in negotiation is information gathering. This means asking calibrated questions to gather more information and to gain a deeper understanding of the other party's needs and constraints. This step is super important because gathering information allows you to tailor your proposals to address the other party's concerns, which only increases the likelihood of reaching a mutually beneficial agreement.

To do this effectively, you want to use open ended questions to get the other party to share information that can help you understand their position and their needs.

In a salary negotiation, you could say, how can we structure my compensation to reflect my contributions while still fitting within the budget? What are your main concerns about increasing my salary? How can we address any budget limitations while still recognizing my work?

In a car negotiation, you could ask calibrated questions like, what's the best price you can offer for this car? Or how flexible are you on the price given the market value of this car?

When you're in the information gathering stage, avoid asking yes or no questions. At the same time, you want to make sure you're asking questions that encourage elaboration from the other person because remember the whole goal here is to gather information and gain more perspective about your current counterpart. When they answer, make sure you're listening actively to their responses. Ultimately, the plan here is to use the information you gather to adapt your strategy in the next steps here.

Step 4 - Bargaining

Step four of the framework is bargaining. This means using the information you gathered to make your case and address the other party's concerns.

The reason this step is so important is because effective bargaining ensures that both parties needs are met, which is only going to increase the chances of a successful negotiation on both sides.

The way you do this is by presenting your case clearly and using data and examples to support all your main points too. Do this in a way that addresses any concerns the other party has raised by using the information you've gathered from them.

For example, if you're in a salary negotiation, obviously you're going to want to present your achievements, but you're also going to want to present industry salary data to justify your raise request. You could do this by saying something like, given my contributions to our recent project and the industry standards, I believe a 10 percent raise is justified. You could also say, considering my expanded role and the success of our latest initiative, how can we make this raise feasible?

In a car negotiation, you're going to want to use market data to justify your offer. By saying things like, given that the market data value is lower, I'm looking for a price closer to XYZ. When you're doing this, be clear and concise, remain flexible, and be prepared to offer concessions that do not compromise your core interests. Also, make sure you're keeping the conversation focused on finding solutions.

Step 5 - Closing

The fifth and final step of this framework is closing. This means summarizing the agreement and ensuring that both parties are satisfied. Obviously this step is critical because closing the negotiation solidifies the agreement and it ensures that both parties are clear on the terms and the next steps.

The best way to do this is by recapping what has been agreed upon. Confirm that both parties are on the same page, and then outline the next steps. Confirm all details in writing. Make sure you express appreciation for the other party's collaboration with you and then schedule a follow up if necessary to review the implementation of the agreement.

To quickly recap everything we covered, the key steps in negotiating effectively are preparation, building rapport, gathering information, bargaining, and closing.

I covered a handful of negotiation tools at a very high level throughout this episode, but if you want to add more negotiation tools into your tool belt, you should check out my episode called 9 Powerful Negotiation Tools and Strategies.

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