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. 

Despite popular belief, negotiation is not about bluff and bluster. In reality, the secret to a successful negotiation is to take ego out of the equation. There is a fine line between confidence and arrogance, and arrogance can kill your opportunities almost immediately. All too often people walk into a negotiation with the mindset that they are the expert on the topic being discussed. Unfortunately, this arrogance isn’t well received by the other party and it can hinder the negotiation. Egos can be extremely detrimental to negotiations and can actually be the demise of the deal, so your best bet is to leave your ego behind. Here are just a few reasons why negotiators should consciously set aside their egos.

1. Egos Prevent You From Hearing Important Information

Egos play a critical role in the information gathering stages of strategic negotiations. People who are egotistical love hearing themselves talk and in doing so, they give away crucial information. Furthermore, they are so busy talking about themselves that they fail to listen to the needs of the other person. Failing to listen prevents negotiators from gathering critical information that could be effective in closing a profitable deal. 

2. Egos Can Ruin Deals

Egos can be extremely detrimental to the close of a negotiation because it undermines the person’s rational decision making and can cause them to ignore strategic agreements. All too often deals go south because someone’s inflated ego gets in the way of what would otherwise be a rational offer. Some people lose a deal simply because they cannot stomach the thought of the other person beating them. Their egos cause them to focus on winning rather than reaching an agreement that meets their needs. 

3. Egos Make It Hard to Be Open-Minded

If you walk into a negotiation with the mindset that it’s your way or the highway, you might as well consider the deal broken from the start. When you are arrogant, you tend to be close-minded and less likely to consider new solutions and alternatives. This prevents you from listening to the other person and learning what their needs are in order to reach a win-win agreement. 

4. Egos Lead to Mistakes

People who have an inflated ego think they are always right and this can lead to mistakes. You might miss something important that could end up being more advantageous for you. Listening to the opinions of others doesn’t make you less able, rather it demonstrates that you appreciate and value teamwork, a quality that is highway valued by others. 

5. You Fail to Focus on the Results

An inflated ego causes the person to focus on “winning” rather than focusing on the results and what would make the best long-term deal for both parties. It is important to take the emphasis off the people involved and remain focused on the facts alone. Remember that it’s your goals that should be driving you, not your ego. 

6. Egos Destroy Relationships

Egos are harmful to professional relationships because such personality traits are less likable. People simply don’t like dealing with someone who is arrogant and this can destroy your chances of working together in the future,

Many people prepare for negotiations by thinking about what they want to achieve, what they are willing to concede to achieve those results, and what bargaining power they have. Then, they prepare their opening statements, their best arguments, and they decide at what point they would choose to walk away from the deal. They try to craft the perfect negotiation and come up with a favorable deal by considering all of these elements. The problem, however, is that at no point did they ever stop to consider the other party’s perspective or needs. Since the other party must agree to any deal, it is pretty important to consider their position when looking for a solution. Failing to take the other party’s perspective into account is a common mistake that can negatively impact the outcome of the negotiation. The best negotiators prepare by assessing both their needs and the needs of their counterparts and they do so by getting the other party to talk first. Here are a few reasons why this is an advantageous move. 

1. To Learn What is Motivating Them

Successful negotiators know better than to walk into a negotiation and spend the whole time talking about themselves. Not only can this come across as egotistical, but it prevents them from truly understanding the needs of their counterpart. Rather, a skilled negotiator should walk into a negotiation armed with questions. This investigative approach will get the other party talking so you can uncover their true motivations. Only then, can you devise an effective negotiation strategy.

2. To Find Out Their Walk-Away Point

You aren’t the only one trying to come away with a win. Negotiations are a two-way street and if you cannot satisfy the needs of the other party, they will do something else. This might mean they walk away from your deal and seek to do business with someone else. This would be considered their walk-away alternative and it’s your job to uncover what that is. By getting them to talk first, you can find out what their interests are, their problems, their motivations, and their concerns. You can also discover their walk-away alternative. Having an accurate understanding of the other party’s walk-away alternative will help you develop a better plan that will meet both of your needs. 

3. Discover Their Constraints and Help Them Relieve Them

Everyone who is entering a negotiation has some problem that is in need of a solution. This could be identified as a “pain point.” By encouraging the other person to talk first, you can learn more about these pain points and what is needed to relieve them. At this point, you can offer a solution that will remove these constraints. In this situation, both parties are getting something they truly need and it becomes a win-win for everyone. 

4. It Builds Trust and Respect

When you sit down at the table and begin by asking the other person about their needs, it immediately sets the tone for the negotiation. Rather than coming across as greedy and arrogant, you are showing that you value and care about the other person’s needs as well. Not only will this help you to gather critical information, but it also creates a more trusting relationship built on mutual respect.

Negotiating can be a tricky process and it’s important to learn how to effectively navigate the process. One of the best practices in negotiation is learning to wait and exercises patience throughout the negotiation process. A quick solution may lead to a bad decision so you need to learn the art of waiting. Patience can be an effective weapon when it comes to negotiating while impatience can be the deadliest mistake. If you can learn to wait, you are more likely to win. Here are a few examples of situations where it is prudent to wait during a negotiation. 

1. When More Research is Needed to Verify the Deal

It’s normal to be anxious about reaching that big business deal but it’s important to remember the art of patience. Contract negotiations can take a while, but it’s better to be safe than sorry. Rushing through a contract could end up costing you a great deal of money and increasing your stress if you are not careful. One time when you should be willing to wait is when more time is needed to adequately research the terms of a contract. For instance, your negotiation might be stuck on one detail, but it’s important to get that detail ironed out so it doesn’t come back to haunt you later on. Take a deep breath and be patient. 

2. If You are Feeling the Pressure of a Deadline

Oftentimes, people will try to strongarm you into signing a deal by putting time constraints and deadline pressure on you. The problem with this, is that you might agree to something you don’t want just because of the deadline pressure. In these situations, it is best to take a step back and wait before signing the deal. Assess the exact terms of the deal and decide if it’s truly what you want. The reality is that deadlines can always be moved, changed, or eliminated so avoid making a decision under pressure. 

3. If You Need Clarification

You should never agree to anything that you don’t fully understand. Even if it takes more time to do a little research, you need to have sufficient information and a complete understanding of the terms of the deal before you agree to it. Don’t be afraid to ask questions and gather more clarity before continuing with the negotiation. Advanced preparation is key to successful negotiations. It is imperative that you gather as much information about the other party’s needs and motivations as possible prior to entering into negotiations. If you find that your preparation has not been adequate, it is more beneficial for you to wait and reconvene once you have gathered all of the necessary information. 

4. If the Conversation is Getting Heated

It’s easy for things to get emotionally charged during a negotiation but nothing good comes from tense emotions. If you feel like things are getting heated, it’s best to pause, step back, and take a break before moving on. In this scenario, waiting will allow everyone to gather their thoughts and cool down before making any final decisions. 

5. If the Deal is Not Worth It

There will be times when your counterpart will drive you away from the table because the deal is not worth signing. Whether they are unable to negotiate what you need, they are acting in an unethical manner, or things are getting too emotional. If you have other alternatives, you might need to consider waiting and looking for a different solution rather than negotiating a deal that is not beneficial to you. 

There is more to negotiating than stating your proposed deal. Timing also plays an important role. When you negotiate can have a significant impact on the outcome of the negotiation process. Choosing the right time to negotiate can affect how alert people are, how interested they are, and how willing they are to listen to you. Not sure when the right time is? Here are four ways to know when to swoop in and ask for what you want. 

Consider Negotiating When…

You Have a Written Offer in Hand

One of the biggest missteps for job seekers is playing hardball before it has been established that they are getting the job. When it comes to negotiating pay, benefits, etc, you want to follow one basic rule: wait until you have a formal offer in hand. You have more power to negotiate if you know for a fact that you are being offered the job. You also come across as greedy and a bit conceited if you start negotiating before you have even been offered the job. Once you have a formal offer in hand, you can take the time to put together a thoughtful counteroffer. 

You Can Clearly Show the Value You’re Bringing In

Whether you are negotiating a salary increase or the benefits of a new job, you have to remember that your employer is focused on what you bring to the table. They aren’t concerned r with how much your bills cost or how long you have worked at the company. They care about what value you are bringing to the company. Therefore, you don’t want to begin a negotiation until you can clearly show the value you’re bringing to the organization. If you have successfully pitched the last several sales, brought a significant revenue increase to the company, or successfully managed a major project, be prepared to show your value and explain why the extra investment will be worth it to your employer. 

The Timing is Prudent

If there is an important event coming up in the near future and you know you have significant value to offer regarding this event, it might be advantageous to step in and ask for that raise or promotion. If you know your employer is in a bind and is dependent upon the success of this event, you have a powerful leg to stand on if you can prove that you’re the answer they have been looking for. If you can prove that your performance will reduce their stress, then reminding them of how you can solve this impending problem might be a perfect opportunity to ask for what you want. 

You Just Had a Major Success

Perhaps you exceeded your sales goal for the third month in a row or you just closed a major deal that you have been working on for months. A great time to ask for what you want is right after you have a major success. Your employer will see your value and they are more likely to give you what you want.

Entering into an important business negotiation can be stressful and many people find themselves becoming anxious about their performance. No matter how well they have prepared their materials, they still feel nervous about how they will handle the negotiation process. While a certain amount of performance anxiousness is normal, you certainly don’t want to showcase your nerves at the negotiating table. For this reason, it’s important to prepare yourself mentally for your next negotiation. The following tactics can be helpful in relieving some of your anxiety so you can negotiate with confidence. 

Know Your Audience

Who are you negotiating with and what do you know about them? What will they know about you and what questions might they ask? The more you know about your audience, the more you can plan ahead so you aren’t caught off guard. This will also help you to present the most valuable information in order to persuade them. Research your counterpart and learn as much about them as possible. Learn what their pain points are and what motivates them. The more you know about them, the more confident you will feel in your ability to negotiate with them. 

Practice and Rehearse

If you know your information inside and out the less likely you will be to panic at the negotiating table. Thoroughly prepare yourself and know exactly what your goals are and what you hope to achieve through the negotiation. Have your concessions prepared as we and know your walk away point. Rehearse a few times with a spouse, friend, co-worker, or even in front of your mirror. The more prepared you are the less nervous you will feel right before the negotiation. 

Practice Mindfulness

Research has shown that engaging in simple and brief mindfulness exercises can be an effective way to improve your negotiation performance. Not only does meditation help alleviate stress and anxiety, but it also enhances your ability to think clearly and recall important information. Prior to your negotiation, spend a few minutes focusing on yourself and mentally preparing for the meeting. Close your eyes and take a few slow, deep breaths to relax your mind and body. 

Positive Visualization

Again, studies suggest that there are a number of benefits to practicing positive visualization. Imagine yourself in front of your audience speaking with confidence and delivering persuasive content. Then, picture their positive reaction. Furthermore, tell yourself that you are well prepared and ready for the negotiation. Doing so will boost your confidence and help you to feel less anxious about the meeting. 

Negotiations will cease to have any meaningful result if the parties involved fail to communicate effectively. Many people get nervous or tongue-tied during a negotiation and they fail to get what they want. The problem is miscommunication. Oftentimes, what we say is misheard or misinterpreted in a way we didn’t intend. This can lead to unsuccessful negotiations and prevent you from achieving your desired results. If you want to get the most out of your next negotiation, you must be clear on exactly what you want. Here are a few tips for asking for- and getting- exactly what you want during a negotiation. 

Prepare with Research

You can’t enter into a negotiation with unrealistic expectations. You need to do some research beforehand so your requests have validation. For example, you wouldn’t just call up your cable provider and demand a lower price. You would, however, do some research to find out what other customers are paying with different companies. If they have similar contracts and services but a lower price, you now have a leg to stand on when you call to negotiate your bill. Knowledge is power so the more research you do in advance the more power you have at the bargaining table. 

State Your Goals Clearly 

Any time you are negotiating with someone, you must be crystal clear about what it is you want. For instance, if you’re trying to negotiate a higher salary, you can’t just walk into your boss’s office and say, “I’d like a raise.” This could mean $1500 or $15,000. If you don’t clarify your goal, your counterpart has no idea what you are aiming for and what number is your bottom line. It’s your job to have clearly defined goals in mind prior to negotiating so you are prepared to state them during the discussion. In the example above, if your goal is to increase your salary from $100,000 to $115,000 you need to be clear on your expectations. 

Offer Clarification

When you ask for something during a negotiation, you need to make sure your counterpart clearly understands what it is you want. Even if you think you were very clear and concise, your counterpart might not feel the same way. Therefore, you need to ask them if they understand your request and if they need you to clarify any points. You might even encourage them to repeat back to you what you want so you can be sure everyone is on the same page. Be sure and offer this same courtesy to them when they are negotiating. 

Follow Up

It’s possible for two parties to walk away from the same negotiation with a completely different view of what was discussed. For this reason, you always want to follow up and reiterate your goals. You never want to assume that the other person fully understands. Misunderstandings and miscommunication happen all the time and you can ensure everyone is on the same page by following up after a negotiation.

When it comes to business negotiations, your body language is just as important as the words you speak. People communicate through a variety of channels and spoken language is not the only way to exchange information. During a negotiation, you can also express ideas and command attention through your body movements and facial expressions. In fact, your body language plays a significant role in business negotiations because it allows you to connect with your counterpart and it also ensures you get your point across clearly without confusion. Since your body language can affect the outcome of your negotiation, be sure and master these five important tips regarding your body language. 

Stand Up Straight

When you stand with your back straight and your head up you convey confidence. This immediately sends a message of self-assurance, authority, and power to those around you. In contrast, someone who is slouching might appear nervous or anxious. People naturally notice and react to body cues and appearing strong and confident can go a long way in a negotiation. 

Maintain Eye Contact

This doesn’t mean you need to stare at someone to the point where they become uncomfortable, but frequent eye contact is important for connecting with your audience. Whether you are speaking to a group of people or just one person, you want to make it a point to establish eye contact throughout the conversation and especially when you are discussing key issues. 

Avoid Unnecessary Hand Gestures

The first sign of nervousness is fidgeting with your hands and arms. When negotiating, you want to make sure and avoid any nervous ticks or habitual hand movements. For example, folding your hands together in a pleading position is a nervous habit that some people do to keep their hands from shaking. Other times, people might cross their arms or put their hands in their pockets because they don’t know what else to do with them. Unfortunately, these gestures make you appear nervous and less persuasive. Instead, use positive hand gestures that send a more confident message. Steepling your fingers, for example, is a much better hand gesture that conveys that what you are saying is important. The right gestures can make you look calm, collected, and confident. 

Smile

Just because you are negotiating it doesn’t mean that you have to appear as the enemy. Smiling is one of the most genuine and effective ways to build rapport with someone. Smiling generally triggers happy feelings, and this can cause the other person to associate happiness with you. Smiling creates a more positive mood and makes you appear more personable and approachable. 

Nod Your Head

People respond positively in a negotiation when they feel like they are being heard. Active listening is one of the most effective communication tools for negotiation and nothing indicates that you are listening better than a nod of the head. Even if the discussion is tense, this nonverbal cue can defuse the tension and demonstrate your willingness to listen. Nodding your head is a great way to validate your counterpart without ever speaking a word. This also indicates that you are open to what they have to say. It is a simple body cue that can lead to alignment, especially during contentious conversations.

Negotiation is an art that requires planning, skill, and strategy. With so much at stake, many people are desperate to simply reach an agreement and finalize the deal. However, power negotiators know that despite your eagerness to reach a conclusion, you should never say “yes” to the first offer. Why? People expect you to counter and when you don’t, it leaves everyone feeling a bit uneasy about the deal. You don’t want your counterpart leaving the negotiation with negative thoughts, so it’s always best to give them what they want: a counteroffer. Passing on the first offer might feel like a risk, but let’s consider the reasons why accepting the first offer isn’t the best move. 

It Damages the Confidence of the Other Party

When you sit down to negotiate a deal, it is expected that the negotiation process will be a give and take. Therefore, if you accept the first offer right away, it can trigger negative thoughts in the other person’s mind. While you might expect your counterpart to be ecstatic that you accepted their offer, it actually leaves them scratching their head. They immediately think to themselves, “I could have done better.” It actually has nothing to do with the final price, but rather the way the other person reacts to the proposal. For example, imagine you are interested in purchasing a car that is for sale for $10,000. You decide to make a lower offer of $8000 and to your surprise, the seller agrees right away. Rather than walking away feeling like you got a great deal, you are left thinking to yourself, “That was too easy. Something must be wrong with it.” Immediately, you have lost confidence in the seller and you are second-guessing the deal. 

It Raises Doubt 

Consider the same situation with buying the car. If the seller is asking $10k for the car and you immediately agree to pay it, the seller might think to themselves, “I should have asked more for the car.” Rather than being excited about the deal, they are left feeling a little disappointed that they didn’t price the car higher. This same principle applies to a number of negotiations. For example, if you are negotiating a higher salary and your boss immediately accepts your first offer, it will cause you to doubt your offer. Instead of walking out excited about your raise, you are left wondering why you didn’t ask for more. In terms of business deals, accepting the first offer raises doubts in the minds of the other party and might encourage them to raise their prices or increase their demands for the next negotiation. 

It Cause You to Lose Credibility

If you walk into an important business negotiation and you immediately accept the first offer that is put on the table, it leaves the other party questioning your credibility.  Not only do they assume you are an inexperienced negotiator, but they might also question your abilities as a professional. It does not look favorable when you say “yes” right away rather than negotiate a better deal.