10 Ways You Can Become a Better Negotiator
Negotiation – a dialogue between two or more people or groups to reach a desired outcome on an issue — is an important part of doing business, from figuring out the finer points of financial contracts with vendors, to setting salaries and job descriptions for employees. The goal of negotiating is to arrive at a beneficial deal that, ideally, improves your circumstances or the bottom line of your business.
The negotiation process is both an art and a skill. “I see it as a really rich and interesting decision problem where we have interests that are [the same]. We both want a deal…But we also have some competing interests where, for example, I want a higher price and you want a lower price,” said Maurice Schweitzer, a Wharton School professor of operations, information and decisions. “We have this interesting mix of congruent and competing interests that makes the decision process pretty complicated.”
During the Wharton Global Youth cross-program speaker series, Schweitzer, an expert in negotiation, spoke to high school students in our on-campus summer programs about planning the negotiation process – and arriving at a better outcome.
Here are 10 of Dr. Schweitzer’s success strategies:
1️⃣ When you’re preparing to negotiate a deal, figure out your alternatives. The acronym BATNA or Best Alternative to Negotiated Agreement, represents the best option for one party in a negotiation if the talks fail. If you fail to reach an agreement, you can activate your BATNA with little disruption. One alternative, for example, might be to accept an outside offer for a different job if your negotiation for a new position or better salary fails. Outside offers can work in your favor because you can use them as leverage in a negotiation, said Schweitzer. “The most important thing you can do for negotiation to improve your position is to develop a good outside offer,” he noted.
2️⃣ You are not the only one sitting at the negotiation table. Therefore, you need to gain perspective and think about your counterpart’s alternatives. “Getting outside of our own head is hard for negotiations, but it’s imperative,” said Schweitzer, who has also done extensive research on emotional intelligence. “We’ve got to figure out what other people are experiencing and how they are seeing the world and to recognize that it might be quite different from how we see things.”
3️⃣ Information-gathering is essential; negotiation starts with an exchange of information, then moves into bargaining. Start the process by asking questions, said Schweitzer. If you are a seller negotiating the price of a painting, for example, ask the buyer: do you own other paintings by this artist? What do you know about this artist? Have you shopped this gallery before? This information will help you better understand the buyer’s motivations and how much they might be willing to pay. Gather information up front.
4️⃣ Don’t just ask the questions, anticipate them as well. “Sometimes if you’re not ready to respond, somebody surprises you by asking a difficult, sensitive question,” noted Schweitzer. “Like, how much money did you make in your last job? Or, do you have other offers? Think about answers to some difficult questions.”
5️⃣ If you’re not ready for the tough questions, then you might lie or reveal too much. Lying tends to creep into the process. “Deception turns out to be a huge challenge in negotiations,” said Schweitzer. “When you’re conversing with your counterparts, you have to be careful to listen to what people are saying, how they’re saying it, and what they’re not saying.”
6️⃣ As you enter the negotiation phase, make sure you understand your zone of indeterminacy. “This is the uncertainty about what something is worth,” said Schweitzer. “Imagine you’re going out for a job. How much should you get paid? We’re not exactly sure what the right price is. We’ll have a range, but there isn’t one definitive exact price. There’s a zone of indeterminacy and that’s when negotiations matter. You are at an advantage when this zone is large,” with more room to negotiate.
7️⃣ You should also determine your zone of agreement as you head into the bargaining phase of negotiations. This is the range in a negotiation where you and your counterpart can find common ground (think between $2,000 and $10,000). Gathering information up front will help you determine this zone. “A lot of novice negotiators jump right into price. The problem is that you could be way off base. You could be saying numbers that are way too high or way too low and you lose credibility,” observed Schweitzer. “You blow up the whole negotiation by starting off with something too extreme. You want to be careful about offering numbers too early before getting a sense of what the zone of agreement looks like.”
8️⃣ Knowledge is power. If you have done your homework and determine a solid zone of agreement, you should be the first person to put an offer on the table. “You will be at an advantage, because the first price anchors the negotiation,” said Schweitzer.
9️⃣ Opening price matters quite a lot. “Where you start drives where you end,” noted Schweitzer. “We want to be very mindful of the opening offers we make because they guide where you end up. Starting high is likely to lead you to end high and starting low is likely to lead you to end low. We know, for example, people who list their home prices at high values take longer to sell, but end up selling at a higher price.”
🔟 As with any business-related pursuit, it all comes down to the people in the room. “Build rapport before you start negotiating,” urged Schweitzer. “Ask them: How are you doing? How is your family? How was your trip? The two key pillars of negotiation are relationships and information.”
Conversation Starters
What is negotiation and why is it important to business? Can you think of some examples of negotiation in your own life?
What is the difference between the zone of indeterminacy and the zone of agreement?
Professor Maurice Schweitzer says, “The two key pillars of negotiation are relationships and information.” What does he mean by this?
This is really amazing stuff! From a young age I have always been interested in negotiation and the art of argument. Personally, I have been continually striving to become a better negotiator, whether it was to negotiate a quote for my business to haggling at yard sales. These tips are extremely applicable in our daily lives I believe that the techniques will benefit you in any endeavor.
Negotiation is an important process to achieve results that could work in your favor. “It’s about gathering information and trying to get the best outcome for yourself”,” my mother told me before forcing me to dive headfirst into my first negotiation, over the price of a lamp. My family and I were on a trip through Turkey and stopped at a bazaar. That’s when I spotted it, a beautiful Turkish lamp made up of small pieces of orange glass, while a blue line ran down the center of the lamp. In my mind, it was a lamp fit for an alien, a lamp that captured the image of an orange UFO with a blue seam separating the two halves. I was intrigued, and my twin sister fared no better, as she spotted a purple and white lamp with a similar design. We were both excited about these lamps, but when we checked the prices, our fascination quickly turned to disappointment. Our parents saw this and came up with the brilliant idea that filled us with hope and fear: “Why do not one of you try to negotiate the price with the nice dealer.” We were both in shock because how were two 9 year olds, let alone one, supposed to negotiate. We both stood there, uncertainty flooding our heads. I gathered my courage and walked toward the table, head held high, ready to do my best to get the lamp for me and my sister, until I stopped at the edge of the table because I was too small to look over. My family and I had to scramble to find a stool, which elicited a hearty laugh from my counterpart. Once we found one and I was standing on it, the negotiations began. It was a tough battle (the dealer laughed at me the whole time), but in the end I came out on top (I got the lamps at a price that was barely lower until the end). I thought the negotiations were over when I got off the stool and the agreed price was reached, until the dealer shouted an even lower price, saying that I had made his day and he was amused by our exchange at my expense. He then taught me the basics of negotiating, the same ones covered in this article, and just reading it made me think of how I learned to negotiate. I plunged headlong into the process without knowing the first thing about it. Negotiating, even if it is sub-par, is the key to results, and like a lamp, it can give light to a person.
Everything I learned about negotiation, I learned from my parents. Growing up in Istanbul, I was always exposed to lively markets and bazaars filled with vibrant colours, exotic scents, and constant chatter of, you name it, negotiation.
They taught me that negotiation was far more than just haggling over prices; it was an art form that required strategy and finesse. I would watch in awe as they navigated through the intricate dance of bargaining.
The goal was always to reach a beneficial deal, one that improved our circumstances or saved us a few extra coins. My parents understood that negotiation was about finding a middle ground, a win-win situation for both parties involved.
I remember one particular day at the Grand Bazaar. We came across a magnificent rug that immediately caught my parents’ attention. The vendor, a seasoned merchant, welcomed us with a warm smile and began his sales pitch. My parents, undeterred, started the negotiation process.
They asked questions about the rug’s origin, its craftsmanship, and its history. Gathering information was crucial; it helped my parents understand the true value of the rug and the motivations of the vendor. Armed with this knowledge, they entered the bargaining phase.
I marvelled at their ability to maintain a friendly yet firm demeanour throughout the negotiation. They would counteroffer, suggesting a price that was fair yet favourable to us. The vendor, equally skilled, would push back but also acknowledge the value of our offer.
It was a delicate dance of give and take, a game of strategy and patience. Eventually, after much back-and-forth, a deal was struck. Both parties were satisfied, knowing they had achieved a favourable outcome.
Reflecting on those experiences, I realized that negotiation was not merely a transactional process. It was about building relationships and gathering information. It was about finding common ground and reaching an agreement that left both parties better off.
Those childhood moments in the markets of Istanbul taught me the true essence of negotiation. It was an art and a skill that could shape outcomes, improve circumstances, and foster understanding between people from different walks of life.
Likewise, Dr. Schweitzer’s success strategies emphasize that negotiation is not only about financial contracts or business deals but a skill that can be applied in various aspects of life. Just as my parents skillfully navigated the intricacies of bargaining, the strategies and success strategies mentioned in the article serve as a reminder of the importance of preparation, information-gathering, and building rapport. The art of negotiation is a powerful tool that can lead to beneficial outcomes and foster understanding between individuals, whether in the vibrant markets of Istanbul or in the realm of business and beyond.
Hey Rana, I can relate to your experience! People often associate negotiation with prices, but over the years of observing my family members negotiate prices for clothes, I’ve come to realize that it’s not just about saving a few bucks, but also about developing skills in compromise and advocating for benefits.
In Dr. Schweitzer’s eighth strategy, he emphasizes the importance of knowledge as power in negotiation. Without understanding the background of the subject being negotiated, one wouldn’t know if they have negotiated enough or if further negotiation is needed. In my hometown, there is an old shopping center renowned for its bargains. A purchase there usually involves several rounds of bargaining. I would watch as my mom strategized her negotiations: she would start by proposing a 50% reduction in price, and if the seller disagreed, she would gradually increase the price until both parties reached a compromise. Sometimes, a compromise couldn’t be reached, so she would grab me and start heading out, only for the seller to break and reluctantly agree to the price. It was during these moments that I realized the importance of not only knowing the background and effective communication but also maintaining strong mental stability.
I wonder if you’ve ever had similar thoughts or experiences?
Hi Rana, thank you so much for your well-written insights, and congratulations on your superlative last year! As a first-generation Indian American, I too have negotiation woven into my family tree. Your comment prompted me to reflect on how many Asian and Middle Eastern cultures prioritize negotiation. My conclusion resonated deeply with yours: negotiation is a mutually beneficial and interpersonal tool.
Growing up, I resented negotiation, viewing it as a zero-sum conflict. As a child, I watched my Indian immigrant mother, a landlord, argue for lower prices and better deals, always aiming to get her way– skills she also used in the home. Conversely, I became a people-pleaser, avoiding conflict with my peers even at my own expense. As I matured, I realized neither my mom nor I had it right: we needed to balance advocating for ourselves and maintaining empathy. That is what negotiation truly is: a “beneficial deal that, ideally, improves your circumstances” as the original article and your comment rightly define it.
Reflecting on my experiences and your comment, I understood why the Asian community takes pride in negotiation: it’s rooted in our intimate interpersonal relationships. Living in a predominantly Indian and South Asian community, I see my parents engage in extended conversations everywhere they go. I find it intriguing (and, honestly, sometimes annoying) how they find it necessary to chat with the restaurant owner for thirty minutes after we’ve paid the check. I later realized it’s part of the tradition of Asian interpersonal connection.
Now, I see negotiation as a powerful tool to find a common good and build relationships. Given my community’s reliance on intimate connections, it makes sense that we excel at an art that strengthens relationships. From my mom negotiating houses to your parents at the bazaar, our cultures value true connection, and that’s what negotiation is.
“I noticed that many people in your generation don’t brush their hair. If I were interviewing them for a job, they’re gone.” – My Mom
Although this article is set within the context of a monetary business negotiation, the definition of negotiation is “a dialogue between two or more people or groups to reach a desired outcome on an issue”. This shows how, upon birth, we’re constantly developing our negotiation and persuasion skills. From convincing mom to raise the bedtime at 8, back-and-forth emails with your math teacher to round your grade up at 16, submitting an Elle Woods spectacular Harvard application at 18, and the promotion/salary negotiations throughout adulthood, good negotiation abilities are linked to charm and social skills backed up with extensive knowledge, and of course, as my mom says, a groomed head of hair.
Emotional appeal is important in negotiation; clean hair, a business-casual outfit, and a warm yet confident smile flashing those pearly whites would make someone like you as a person and convey your respect for them.
As an intern for the LA Times High School Insider this year and someone who has written multiple journalistic articles, I have learned how to conduct myself on both sides of an interview. Even on Zoom, I brush my hair and put on a nice top over my PJ bottoms. However, I’ve discovered new angles, business strategies, and context that were unintended but highly useful for my stories because of building rapport with my interviewees. I wouldn’t have been as successful in my interviews if I had asked too many cookie-cutter questions or questions with obvious answers on a business’ homepage. I value my time, my interviewee’s time, and the quality of my soon-to-be-article article, so I try to make my “zone of indeterminacy” large, as Professor Maurice Schweitzer would say. After all, time is money (literally for me now since my summer internship is paid). Sometimes some interviewees request that I don’t use certain information, but their insights help guide the direction of my writing and interviews. No matter what, a journalist never reveals her secrets.
I also appreciate how this article emphasizes the need to focus on the veracity of the other person, but it should further stress a person’s dedication to truthfulness. For example, when my Yaya was 16 in the Philippines, she wanted to visit her mother in America. However, she had an approved family petition for immigrant, so she was discouraged by immigration attorneys to apply for a tourist visa because A) it would be nearly impossible for her to get the visa approved and B) A visa application is expensive. While my Yaya was poor, she walked into the immigration office with her head held high and humble clothing (and combed hair, of course). She watched everyone ahead of her with their fancy lawyers and luxurious suits get the daunting red stamp of denial. However, she was honest that she didn’t have any money but wanted to see the American life her mom left her to build for them. She was among the first to get the green approval stamp, leaving the line of Filipinos and their lawyers behind her jaw dropped.
Who better to learn the art of negotiation, survival, and hard work than from my mom and second mom who built their American dreams from humble beginnings? When it comes to negotiation, I forever know to be vigilant of the dishonesty of others, be true to myself, brush my hair, and, most importantly, trust in the Lord to guide me to the right path.
Character Meemaw from the American sitcom “Young Sheldon” hustled her grandson in poker to teach him that “what’s on a person’s face is not always what’s in their heart” but “that’s what makes life interesting.” I have had that conversation bookmarked on my laptop for a while. I know I can always trust my mom, Yaya, and God, but I will proceed with strength, caution, professionalism, and pretty hair as I negotiate my way through this dog-eat-dog world.
The quote said by Schweitzer detailing the importance behind underlying meaning behind conversations as, “When you’re conversing with your counterparts, you have to be careful to listen to what people are saying, how they’re saying it, and what they’re not saying.” Emotionally, it reminds me that there’s often more beneath the surface of what people express verbally. In addition, it serves as a reminder on the significance of being attentive and thoughtful when engaged in conversations. This is important in communication as with a balance of caution and empathy, an individual would be able to better pickup on hidden meaning behind conversations that are not explicitly stated.
A notable quote from Dr. Schweitzer which states the importance of gaining perspectives of different parties is, “We’ve got to figure out what other people are experiencing and how they are seeing the world and to recognize that it might be quite different from how we see things.” The following quote reminds me that everyone has their own separate way of thinking. People can have a different perspective from each other. They may have been experiencing something that could be a factor of how they’re doing their offer. Understanding how they are seeing the world can help us to accommodate them to obtain a beneficial deal. In addition, this expands our way of thinking from looking at how people see the world.