The purpose of a negotiation is to bring two parties together in order to find common ground and seek solutions that are mutually beneficial. While this sounds great in theory, things don’t always go as planned. There might be times when the two parties simply cannot come to an agreement and must seek an alternative dispute resolution or it might even be that one party is contesting the contractual agreement that was initially agreed upon during negotiation. In any case, there are several methods of dispute resolution including mediation, arbitration, and litigation. While there is certainly a time and a place for each of these, they certainly have their advantages and disadvantages so it’s important to know which type of dispute resolution would be most appropriate for your situation. Let’s take a closer look at why arbitration might be the best option when it comes to settling disputes. 

Types of Dispute Resolution

There are essentially four types of dispute resolution: negotiation, mediation, arbitration, and litigation. Negotiation is generally where people begin because it’s an informal consensual process by which two parties try to reach an agreement. In many cases, this is simply a starting point and further dispute resolution is needed. 

Mediation is another type of dispute resolution. Like negotiation, it is also a consensual process, but it involves a neutral third party who helps the parties negotiate a resolution to settle their dispute. In a mediation, it is still the responsibility of the involved parties to come to an agreement. The mediator does not make or impose any decisions on behalf of the parties. 

Arbitration is a more formal process for resolving a dispute. The arbitrator is also a neutral third party, but the process requires formal rules of procedure and the arbitrator typically has legal training. Unlike a mediator, the arbitrator has the authority to make decisions that are binding on both parties. 

Finally, litigation involves settling a dispute in a court of law. It is the most formal and expensive form of dispute resolution and requires both parties to be represented by a lawyer. 

Advantages of Arbitration

Anytime there is a dispute that requires a third party to help resolve it, it is advisable to start with arbitration. Unlike other forms of dispute resolution, arbitration allows both parties to reach a solution without stalling, wasting time, or wasting unnecessary money. Here are just a few of the advantages of settling a dispute through arbitration. 

• Both parties agree on the arbitrator: Unlike other forms of dispute settlement, an arbitrator is someone who is chosen by both parties so everyone involved can have confidence that they will be fair and impartial. 

• The dispute will be solved faster: Working with a mediator can involve multiple back and forth meetings and that can take time. Furthermore, a date for arbitration can usually be obtained much faster than a trial date. This means that arbitration can usually be the fastest and most productive way to settle a dispute. 

• Arbitration leads to results: Unlike mediation where it’s up the parties to reach an agreement, an arbitrator has the authority to make binding decisions. 

Arbitration is less expensive than a trial: It can be extremely expensive to go to trial and the involved parties can save money by not hiring lawyers, expert witnesses, and trial preparation fees.

The negotiation is over and you can finally breathe a sigh of relief. While you might be done with the hard part, it’s not quite time to put your feet up and relax. The truth is, there is still work to be done after a negotiation. As it turns out, negotiating is a process and the real work begins after you shake hands and part ways. After the negotiation is over, it’s important to clarify things in writing and confirm your new timetable as soon as possible. You also want to check in with your counterpart to ensure that everyone is on the same page. If you want to ensure that your negotiation is successful from beginning to end, be sure and tie up your loose ends after an agreement is reached. 

Put Everything in Writing

If you and your counterpart reached an agreement, you will need to write down the details of the agreement. Be as specific as possible about each detail so you can be sure both parties are fully aware of what they are agreeing upon. Once you have outlined your agreement details, you will need to submit a copy of this agreement to your counterpart for review. This is important because it alleviates any misunderstandings and ensures that both parties are on the same page. You never want to leave gray areas and you certainly don’t want any surprises. A formal written agreement also increases the chances that both parties will follow through with their promises.

Clear Up Any Confusion

Once you have submitted a formal agreement it is advisable to answer and/or ask any questions that you or your counterpart might have. You want to be sure both parties feel like they have a clear understanding of the agreement. Be sure to go over any concessions that were agreed upon during the negotiation so there is no confusion about expectations. 

Revisit the Negotiation if Needed

In some instances an agreement may not have been reached. In this case, you would want to check back with the other party to revisit the negotiation. Perhaps the timing is now right to move forward with an agreement. In any case, keeping in touch allows you to maintain the relationship in case a new opportunity arises. 

Check In Regularly

It is always a good idea to check in every now and then to see if things are going well. This is an integral part of building a long term relationship. If possible, you might even consider holding regular meetings to discuss how things are going. Perhaps things need to be changed or modified in order to achieve the best results. Make sure your counterpart knows that you are committed to doing your part, and in turn, they should reciprocate with the same courtesy. 

Negotiation is a vital skill for professionals in today’s business environment. If you are looking to build your skills and become a more valuable asset to your organization, you will need to learn how to succeed at the bargaining table. While preparing for your negotiation is certainly essential for success, it’s just as important to know what mistakes to avoid. To help you become a more effective negotiator, you must not get distracted by hard bargaining tactics and the other side’s problems. Rather, you want to remain detached from your counterpart, yet fully engaged in the negotiation. 

Don’t Fall for the Tricks

It’s not always fair but sometimes people employ hardball tactics to try and take advantage of naive and inexperienced negotiators. They may try the “I can’t authorize that” tactic to delay a response or they may try the ‘I’m sorry I wish I could do more but this is all I can afford’ tactic to keep prices down. Furthermore, they may even try to inundate you with all of their problems to try and earn your sympathy so you will back down and concede. All of these tactics are designed to throw you off your game. Never allow yourself to get too emotional with your counterpart. Remember that their problems are not your problems and that you are simply there to do business with them. 

Don’t Negotiate Against Yourself

It’s certainly important to listen to the other side’s needs and hear what they have to say. In fact, in addition to representing your own interests, you also want to be open to the other side’s point of view. That said, you do not want to get so absorbed in their problems that you forget about your own agenda. You want to remember that negotiation involves persuasion, and it’s all about convincing the other side to see your point of view. If you get too involved in the other side’s problems, you could end up negotiating against yourself. 

Stay Focused on Your Goals

It’s easy to get so wrapped up in a negotiation that you forget what you came to achieve. Make a list of your goals beforehand and be sure to stick to those throughout the negotiation. Have a list of concessions prepared in advance, so you don’t end up giving up something out of pity for the other side. Also, know your BATNA and be willing to walk away if the agreement isn’t viable. Despite the hardships of your counterpart, remember to stay focused on what you came to achieve. You can be cordial and respectful while still keeping your eye on the prize. 

The ability to negotiate is a skill that can help you no matter what industry you are in. Most professionals will spend some part of their career negotiating, whether it be with customers, colleagues, or employers. While it is a common business practice, many people are not experienced negotiators and might end getting pushed around at the bargaining table. For this reason, it is important to understand some basic principles of negotiation so you can stick to them when you sit down with your counterpart. 

Know what you want to accomplish.

If you don’t know what you are trying to achieve, how will you know if your negotiation was successful? Prior to sitting down at the table, you need to have a clear understanding of exactly what you want to accomplish. Having a defined goal will allow you to develop a strategy to help you achieve your desired outcome. It will also help you to determine your walk-away point. Throughout the negotiation, be sure and stay focused on your goal and stick to your plan. 

Develop a strategy.

It’s not enough to simply have a  goal in mind. You also need to prepare for your negotiation by devising a detailed plan. Know what you are going to offer and when you plan to offer it. Have a list of concessions prepared beforehand and an idea of when you plan to use them. You also want to know what you plan to ask for in return. Consider adding decoys such as “nice-to-have items” that are not essential to your overall success. Be prepared to change gears if your counterpart seems unwilling to budge and plan for the unexpected. Preparing a strategy will make you more confident and it will also help you to stay on track and stick to your goals. 

Know the full range and strength of your power. 

One of the reasons people set low aspirations is because they underestimate the strength of their position and their negotiating skills. If you enter into a negotiation with the assumption that your counterpart is more skilled than you and has a better position, than it typically proves to be true. Rather, identify your own strengths and the power of your own position and stick to that power throughout the negotiation. 

Remain respectful and trustworthy at all times. 

Let’s be honest-the world isn’t fair and people can be ruthless, especially when it comes to negotiating. There might be times when you are faced with a bully negotiator that is willing to use hardball tactics to intimidate and frustrate you. In these situations, remember to hold true to your own principles of honesty and integrity and don’t sink to their level. Calmly and respectfully try to steer the conversation in a different direction and don’t be afraid to call a time-out or walk away if needed. It’s not worth running your own reputation.

Seek a win-win outcome.

If you want to secure a strong and professional ongoing relationship, it’s important to seek a win-win result. If your counterpart feels that they are being treated unfairly, this could damage the relationship between you, which could affect future negotiations. In the long run, maintaining a good relationship is more important than a win-lose outcome. 

The start of a new quarter means a new chance for you to achieve your goals. If you want to perform better, hit your numbers, and reach new heights, you can leverage your chances by building your negotiation skills. There is no question that negotiation skills play a critical role in doing business. In today’s highly competitive market, the ability to negotiate effectively puts you at a much greater advantage. Not only will you become a better communicator, but you will also find that you can increase your profitability dramatically. If you want to gain a competitive edge this quarter, start by strengthening these important negotiating skills.

Communication Skills

Communication is the foundation of any negotiation. How you communicate can make or break a negotiation. You must be able to convey your message clearly and effectively if you want to succeed as a negotiator. Verbal, nonverbal, and written communication skills are essential when negotiating, and strengthening your communication skills can help you gain a competitive edge at the bargaining table. 

Listening Skills

Many people think negotiation is all about stating their case, but listening is equally important. In fact, the best negotiators understand that it is through listening that they gain pertinent information about what is motivating their counterpart. In addition to gaining useful information, listening also helps to build a rapport with the other party because they feel like their voice is being heard. If you want to strengthen your negotiation skills, you want to start by learning how to listen. 

Planning and Organizing Skills

Negotiation involves a great deal of planning in order to be successful. You can’t simply walk in and “wing it.” Rather, a great negotiator spends time researching and gathering information about the other party prior to the negotiation. Then, they devise a plan and strategy that will give them the best chance of achieving a win-win outcome. They spend time creating a detailed outline of their goals, what concessions they will make/receive, and how they plan to go about leading the discussion. A successful negotiation involves methodical planning and a great deal of organization before the two parties even sit down to talk.

Problem-Solving Skills

Most negotiations happen because one or both parties is seeking a solution to a problem. Good-problem solving skills allow you to seek solutions that are mutually beneficial. Furthermore, you can learn how to identify potential problems before they occur. If you can learn how to solve your customer’s problem, you are likely to see a boost in sales. 

Negotiation skills are necessary no matter what industry you are in, and learning to negotiate effectively can help you land deals and build long-lasting relationships. They can also help you get that promotion you have been after or get the lead on that big project at work. Building your negotiation skills takes time, but it is well worth the effort and can ultimately help you to hit your new quarter goals. 

When it comes to doing business, consistency is important. Consistency is highly valued and is associated with honesty, integrity, stability, and even intelligence. Most of us will go to great lengths to consistently fulfill our commitments. Why? Because on the contrary, few people want to deal with a counterpart that has a reputation for acting inconsistently and not fulfilling their commitments. In terms of negotiating, good sales professionals know that if they can get a small commitment from a customer, that customer’s natural tendency will be to move forward and fulfill that commitment. As a result, good negotiators focus intently on what they are being locked into and how tightly it binds. While it is a necessary component of any negotiation, it is critical to manage your level of commitment. Consider the following tips to avoid overcommitting during a negotiation. 

1. Determine Your WAP (walk-away point) Prior to the Negotiation

Negotiations can be stressful, especially if you are negotiating with a professional. It is common for people to buckle under the pressure and end up committing to something they don’t really want. For this reason, every negotiator should determine their WAP before walking into the negotiation. This is extremely important because it prevents you from making a commitment that you either can’t fulfill or that isn’t beneficial to you. 

2. Don’t Commit Too Quickly

Once made, commitments may limit your ability to negotiate further- for this reason you want to avoid committing too early. A skilled negotiator will try to lock you in and bind you as tightly as possible. Permitting yourself to commit too quickly could prevent potential flexibility. Only commit when you feel confident that you are getting the best possible deal and there is no additional need to counteroffer.  

3. Understand the Terms of Your Commitment

It may sound obvious but all too often people commit to deals without fully understanding the parameters of the deal. Before agreeing to anything, be sure you know exactly what you are committing to up to the last detail. Expert negotiators might try to lure you in without fully disclosing minute details and you don’t want to be caught off guard. Ask questions and repeat back the terms of the deal to be sure you fully understand your commitment. 

Our daily and professional lives are filled with negotiations. But, what sets a successful negotiator apart from the rest is knowing how to employ the right strategies. While there are several tips and techniques for negotiating, the key to getting what you want is knowing how to ask for it. Anyone can walk into a negotiation throwing out numbers and making requests, but having an offer you can justify will increase your chances of landing the deal. Here are a few ways to justify what you are asking for when negotiating. 

1. Sell the Benefits 

Let’s say you are negotiating your benefits and salary package at a new job. If you walk in and simply state your desired salary, there’s a good chance you will get denied. On the other hand, if you come prepared to explain what value you bring to the table and you are able to support your claims with evidence, the hiring manager is far more likely to consider your request. Why? Because you are selling yourself well and you are justifying your worth. Likewise, a professional training course might be really expensive but that’s because it yields better results. If you have value to bring to the table, then other people will be willing to pay for it. 

2. Explain the Costs (to you)

Another way to justify an offer is by explaining the costs that you will have to incur. For example, say you are being offered a job to come and speak at a training seminar and you quote a higher price because the location of the seminar is two hours away. When the customer questions your expensive rate, you need to explain that it will take you several hours to prepare the seminar along with four hours of travel time, which means much of your cost will be spent on food and gas. If the other party understands why you are asking for what you want, they might be willing to agree to it. 

3. Find Your Customer’s Pain Points

Similar to selling your benefits, you want to find out exactly what your customer is needing so you can step in and show how you can deliver and why they should choose you. For example, customers who are only seeking the cheapest option, might not realize that there is more to your product than price alone. Perhaps you can offer higher quality, guaranteed delivery times, longer warranties, or free shipping. Prepare a list of specific ways that you can solve your customer’s pain points.  

4. Distinguish Yourself from Competitors

It’s very common for customers to visit other companies and online sites in search of a better deal. You can tackle this by shifting the buyer’s focus from price to the advantages of buying from you. Perhaps your customer service is top-notch and you can personally assist them with their needs. You might be able to guarantee specific delivery times. You might even work with a local vendor so you can resolve issues quickly and easily. Whatever the perks are, be sure and make your customer aware so they understand what sets you apart from the competition. 

5. Know Your Pricing Strategy

It’s much easier to defend your price if you’re confident in your pricing strategy. Make sure you have done plenty of research and planning when setting your pricing. Be clear about your costs versus your profit and how much the market will pay for your product or service. Be prepared to explain this to your customers.

Negotiation is all about give and take, and successful negotiators understand the need to prepare their concessions in advance. Without a clear plan, it is difficult to navigate unforeseen obstacles and you could easily buckle under the pressure. You might end up agreeing to something you don’t really want or giving up something that really mattered. While it is impossible to prepare for every possibility, prioritizing and preparing your concessions in advance can prevent you from making a costly mistake. Here are a few reasons why you need to be fully aware of your concessions before the negotiation even begins. 

You Need to Prioritize Your Concessions

Concessions are an inevitable part of any negotiation, but that doesn’t mean you have to give up on the things that really matter to you. Before you enter a negotiation, make sure you have a clear goal in mind and you fully understand your needs and wants. Write a list of concessions you would be willing to make and prioritize them in order of importance. Knowing this information will help you avoid giving up your most valued concessions too early. 

You Can Decide What You Want in Return

You should never make a concession without asking for something of equal value in return. However, if you haven’t planned for your concessions in advance, you won’t know what to ask for. Unilateral concessions are an important negotiation strategy and you need to be prepared to ask for reciprocation when the time comes. When you prepare your list of concessions, you also need to write down what you plan to ask for in return. 

You Don’t Want to Crumble Under Pressure

Negotiations can be stressful, especially when you are dealing with someone who likes to play hardball. If your counterpart is trying to strongarm you into giving something up, you might be inclined to do so if you didn’t prepare a plan in advance. On the contrary, if you know your concessions on the front end, you can feel more confident saying “no” and this can save you from conceding too much too fast. 

You Can Determine Your BATNA

Every skilled negotiator should prepare a BATNA (best alternative to a negotiated agreement) prior to negotiating. This ensures that you are prepared with a backup in case things don’t go as planned. If you know your concessions beforehand, you will have a better idea of what BATNA should be and you can also determine your walk away point. If both parties cannot come to an agreement, you will at least feel confident knowing that it is time to walk away. Sometimes it is more prudent to walk away from a deal rather than conceding ineffectively.

When it comes to negotiating, there is a general rule in which to follow: never accept the first offer. Some people worry about rejecting the first offer for fear of offending the other person, but in fact, the other person is fully expecting you to counter. When you don’t counter the first offer, you leave your counterpart with two negative thoughts: Why didn’t I make an even better first round offer, and there must be something wrong with their willingness to accept it so quickly. You don’t want to leave your counterpart with the wrong impression, and you certainly don’t want to miss out on a better deal, which is why it is always acceptable to politely decline the first offer. The following tips can help you determine how to politely counteroffer for maximum effectiveness during your next negotiation. 

Start with an Appreciation of Time and Effort

When you are negotiating a business deal, a job offer, or a salary increase, you always want to maintain a good rapport with your counterpart since you never know when you might work with them again in the future. For this reason, the first thing you should do when declining the first offer is to thank the person for their time and effort. You could say something like, “I appreciate your hard work in putting together this offer for me, but unfortunately I am going to have to decline your offer at this time.” Even though you are declining the offer, your counterpart likely spent time researching information and putting the offer together so it would only be appropriate to thank them for their effort.

Say It Directly

Many people drag their feet and dance around the issue because they are nervous about delivering the news. However, an elaborate and unnecessary response will only frustrate your counterpart. The best way to decline the first offer is to do so bluntly, making it quick and painless. Too much babbling could allow them to find a loophole in your answer. 

Explain Your Reasoning

Make it clear exactly why you are not interested in the offer. It will provide much needed insight for your counterpart and it will set the stage for your counteroffer. After all, a persuasive rationale can help you leverage your side of the argument. Furthermore, rejection without a proper reason can be frustrating and confusing. 

Offer an Alternative

Sure, the other person might not be excited about hearing the word “no” but if you can offer an alternative that seems equally as good, they are likely to accept the rejection much better. This is a great chance for you to provide concrete evidence as to why your offer is the best deal. If you are negotiating salary for example, prove your worth. If you are negotiating a sales deal, prove why you are worth the extra money. 

Be Prepared to Make Concessions

Playing hardball isn’t always the best way to achieve your desired outcome. By agreeing to make concessions, you are demonstrating a willingness to find a solution that is beneficial to both parties. Not only are you more likely to get what you want, but you are doing so without leaving a bad impression. 

Most of us have felt the frustration of feeling like we aren’t being heard. Perhaps your boss didn’t acknowledge your concerns or your friend refuses to take your advice. This frustration is the same feeling your potential client will have if you spend the entire negotiation talking about yourself. If you spend more time preparing your pitch than considering what he or she has to say, it will hinder communication between the two parties. Most people feel like preparing for a negotiation means knowing exactly what to say and when to say it. Skilled negotiators, however, understand the importance of listening to the other party.  Successful negotiations are based on the ongoing exchange of information and require active listening. The information you obtain from listening will assist you in creating solutions that are beneficial to both parties. Here are a few ways listening can boost your negotiation success. 

You Will Gather Critical Information

Many people spend countless hours preparing exactly what they will say, what their arguments will be, and how they will get what they want. In doing so, however, they fail to consider the needs of the other side. Clearly, an agreement cannot be reached without the other party so it can be detrimental to the negotiation process to leave out the other parties involved. Rather than doing all the talking, skilled negotiators understand that listening is the best way to gather critical information about what is motivating the other party. Through listening, they can discover the other parties’ needs, concerns, and expectations. Instead of trying to persuade the other party, you should strive to listen to them. Only then can you create a solution that is beneficial for everyone. 

To Provide Clarity

The act of listening is very important because it ensures you understand everything that is being discussed. In fact, you should actually repeat back to your counterpart what you have heard so you can be sure you understand it the way it is meant to be understood. It can be very easy to forget things and get confused, especially when tensions rise and emotions are involved. The best way to avoid misunderstandings is by actively listening to your counterpart. 

It Builds a Trusting Relationship

By listening to your counterpart and giving them your undivided attention, you are demonstrating that you genuinely care about their needs. Doing so will strengthen the professional relationship and will motivate the person to do business with you again in the future. Your counterpart needs to think you are an honest, caring individual and listening is one of the best ways to demonstrate these qualities. When your counterpart trusts you, they are more likely to

You Can Adjust Accordingly

Not only does listening demonstrate respect for your counterpart, but it can also be to your advantage because it allows you to gather information and adjust your position accordingly. The more you know about the other person, the more equipped you are to customize a strategy that will effectively meet their needs.