Negotiation, one of the most integral components of all business activities, must now be effectively handled online for a business to remain competitive in this new market. Successful negotiation relies on building rapport with the other party and having a mutual understanding. Body language, informal conversation before getting to business, and even the setting of the negotiation all play a role. It is not surprising that compared to virtual interactions, face-to-face interactions result in a higher likelihood of reaching an agreement, higher satisfaction during the negotiation process, and a higher degree of trust. Thus, when negotiating online, it becomes even more important to implement the most effective negotiation tactics to be successful.
While many negotiators (and salespeople) are no strangers to closing deals online, here are a few tips on how to refine the process in order to take your team’s results to the next level:
Be Patient
Successful negotiation is a time-consuming process that typically requires multiple meetings and several iterations of a contract before a deal closes. According to a recent study, it can take up to 13 separate interactions with a potential client before a sale occurs. Add in the complexity of online communication and the online negotiation process may take even longer. While moving too quickly to close a deal can result in rushed terms and avoidable concessions, allowing negotiations to prolong unnecessarily can be just as detrimental. The longer negotiations continue, the more likely you are to experience obstacles in successfully closing the deal.
Another timing aspect to keep in mind when considering how to negotiate deals is the order in which you schedule your virtual negotiations and sales presentations. For both face-to-face and online, remember the following: aim to go first when you are not the default choice and there are fewer options but aim to go last if you are the default with lots of options. This is based on the effects of anchoring and recency bias. As far as making the first offer, go first if you are well researched and aware of the market in order to anchor the negotiation. Let them go first if either party is unsure as the first offer provides information.
Define Your Concessions in Advance
Throughout any negotiation process, it is likely both parties will end up making some type of concession, or trade-off, in which one party yields or grants something to another in the hopes of gaining a different advantage. This is not unique to online negotiations but determining how to negotiate deals with the best results involves managing the timing, frequency, and extent of the concession to influence the other party’s decision making. When implemented effectively, concessions can serve as a formidable negotiation tactic and often are the only means of reaching an acceptable outcome for both parties.
Before you reach the virtual negotiating table, define the concessions you would be willing to make to close the deal. Precisely defining limits for what you consider an acceptable concession in a negotiation ensures you will not be caught off-guard by offers that seem attractive but actually include terms you are unable or unwilling to accept. Make sure to rank your negotiables and concessions so that you can give away the things that are least important to you first. And, finally, when making concessions try to move slowly. Let the other side know it’s been hard to provide the concession and move to get something in return.
Quote Specific Figures
While conducting a virtual negotiation, always quote specific figures rather than providing an acceptable range. A study from Columbia Business School suggests that negotiating with precise figures indicates to the other party that you have completed thorough research into this number, making it seem more authoritative and appealing. By working with one figure and adjusting it higher or lower, when necessary, you remain in control of the terms. Presenting your terms using words like “between” re-frames the online negotiation in a manner that allows the other party to focus on the figure at either end of the range that most benefits them, ultimately restricting your options for counteroffers.
Open and Enjoyable Conversation
Encouraging open two-way dialogue is an important asset in negotiations, even more so if it extends beyond the content of negotiation. We generally underestimate the impact of people enjoying each other’s company and how that impacts decision making. While it may be easier and/or more natural to have these types of conversations in-person, it is still very important to encourage this type of communication online. This allows you to build rapport and develop trust. It also allows you to gain valuable information. Practice active listening on virtual platforms by giving the speaker your full attention, absorbing everything they say, and interpreting the intentions behind the information they share. This allows you to understand the other party’s point of view, priorities and limitations.
By keeping these tips top-of-mind while closing deals online, you’ll find your virtual negotiations to be more effective.
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