5 Negotiation Types You Must Master to Win Sales Deals

Negotiation is at the heart of every successful sales deal, and knowing the right types can make all the difference.

In fact, 82% of top salespeople have strong negotiation skills, according to a study by LinkedIn. Whether you're dealing with a win-win scenario or a more competitive situation, understanding different negotiation styles and types gives you the upper hand.

Types of Negotiation Strategies

1. Distributive Negotiations

Distributive negotiation is often called "win-lose" negotiation. It focuses on dividing a fixed amount of resources, like money or time between other parties, where each party tries to claim the most.

Why is it important:

This type of negotiation happens when two parties are fighting for the biggest share. In sales, you often deal with distributive negotiations when two or more parties are bargaining over price. If you're selling a product, you want to maximize your profits.

How to implement:

• Prepare by knowing the value of what you're negotiating.
• Start with a higher offer so you have room to adjust.
• Be firm with your stance but flexible enough to reach a negotiated agreement.

2. Integrative Negotiations

Integrative negotiation focuses on creating a "win-win" scenario where many negotiators on both sides collaborate to find a solution that benefits everyone.

Why is it important:

Integrative negotiations are useful when you want to build long-term partnerships. For example, when working with business partners or large clients, you both aim to negotiate and find creative solutions that satisfy both parties.

How to implement:

• Focus on interests rather than positions to understand what both sides truly need.
• Be open to creative solutions, even if they weren’t part of the original negotiation.
• Use negotiation skills to build a trusting relationship with the other party.

3. Sales Negotiations

Sales negotiations are specific to closing deals with customers. It involves finding the right price, terms, and products that satisfy both you and the buyer.

Why is it important:

Successful sales negotiations lead to increased revenue and customer satisfaction. If you can negotiate well, you’ll build a stronger relationship with your customers, ensuring repeat business.

How to implement:

• Research your customer’s needs and position before starting the negotiation process.
• Use effective negotiation strategies such as active listening and asking open-ended questions.
• Create a mutually beneficial outcome where both sides feel satisfied with the agreement.

4. Collaborative Negotiations

Collaborative negotiations are also known as "win-win" negotiations. In this type, both sides work together to find a solution that benefits everyone except one party. Instead of competing, the parties involved try to solve the problem by understanding each other’s needs.

Why is it important:

This approach is great for building long-term partnerships. For example, if you are working with a business partner, you want both you and the other party to succeed.

A trusting relationship is key to a collaborative approach to negotiations. This strategy helps you create mutually beneficial outcomes that strengthen your business relationships.

How to implement:

• Focus on understanding the interests of the other side, not just their demands.
• Look for creative solutions that benefit both you and the other party.
• Be open to making concessions but aim for a solution that satisfies everyone.

5. Compromise Negotiations

Compromise negotiations happen when the negotiator on both sides make concessions to reach a middle ground. In this type, each party gives up something to reach a fair solution. It’s not a win-win or win-lose, but rather a balanced agreement.

Why is it important:

Compromise is important when time is limited, and both sides want to avoid conflict. It allows parties to reach an agreement quickly without one side feeling like they lost.

For example, in sales negotiations, you might lower your price slightly from initial offer, while the buyer agrees to faster payment terms. This creates a solution that works for both sides.

How to implement:

• Identify the areas where you are willing to make concessions.
• Ensure both parties leave the table with something valuable.
• Focus on maintaining a good relationship even if you both have to compromise.

How to Build an Effective Negotiation Process

1. Start with Thorough Preparation

Preparation is the first step in any successful negotiations or negotiation process. It means gathering all the information you need before you sit down at the bargaining table.

How to do it:

• Research the other party: Know who you’re negotiating with. Are they experienced negotiators or first-timers?
• Understand your goals: What do you want from this negotiation? Write down your priorities.
• Prepare for different types of negotiation: Whether it’s a win-win negotiation or a distributive negotiation, being ready for various strategies is key.
• Have a backup plan: This is called your BATNA (Best Alternative to a Negotiated Agreement). It’s what you’ll do if the negotiation fails.

2. Set Clear Goals and Prioritize

Before the negotiation starts, you need to know exactly what you want. This means setting clear goals for yourself and understanding what’s most important.

How to do it:

• Write down your main goals: Whether you’re aiming for a specific price, agreement, or compromise, list your top goals.
• Prioritize your needs: Decide what’s most important to you. Is it the price? A long-term partnership? Focus on these first.
• Stay flexible: While you want to stick to your goals, be open to negotiation tactics and making small concessions if it leads to a better deal.

3. Create a Collaborative Atmosphere

Collaboration is key for building strong, long-term relationships. When you create a cooperative atmosphere, it’s easier to find common ground and a mutually beneficial outcome.

How to do it:

• Be respectful and listen: Show the other party that you value their input. This helps build trust.
• Look for creative solutions: Sometimes, both sides can win if they think outside the box. Try to find solutions that help both you and the other party.
• Aim for a win-win negotiation: Instead of focusing only on what you can get, think about how both parties can benefit from the deal.

4. Master the Art of Concession

A concession is when you give up something in a negotiation to help move the deal forward. It’s about knowing when and how to give up certain points without losing too much.

How to do it:

• Prepare your limits: Before negotiating, identify the things you can compromise on and what you cannot.
• Give small to gain big: Start with minor concessions. This makes the other party feel they’re winning, while you save your larger points for later.
• Be strategic: Only concede on points that don’t affect your main goals. This way, you protect the most important parts of the deal while keeping the other side happy.

5. Implement a Step-by-Step Process

A step-by-step negotiation preparation process is a clear plan that helps guide each stage of negotiation. It makes sure nothing is overlooked.

How to do it:

• Start with preparation: Research the other party, set your goals, and identify the tactics you will use.
• Define the stages: Break the negotiation into phases, such as opening offers, making concessions, and finalizing the agreement.
• Keep track: Throughout the process, make sure to document what has been agreed upon and what still needs discussion. This keeps everyone on the same page and ensures a fair solution.

Innovative Negotiation Tactics for Closing High-Value Sales

1. Sharpen Negotiation Skills for High-Pressure Sales Scenarios

In high-pressure sales scenarios, both sides want the best deal, and emotions can run high. Your negotiation skills will be tested.

How to do it:

• Stay calm and focused: Practice keeping a level head, even when the stakes are high. This shows the other party that you are confident and in control.
• Listen more, talk less: Listening helps you understand the other party's needs and interests. This allows you to respond with solutions that make both sides happy.
• Be ready with your negotiation tactics: Whether it’s a win-win negotiation or a win-lose situation, always have strategies ready. Tailor your approach to the specific situation.

2. Prepare with BATNA for Effective Negotiation Strategies

BATNA stands for "Best Alternative to a Negotiated Agreement." It’s your backup plan in case the negotiation doesn’t work out.

How to do it:

• Know your options: Before entering a negotiation, identify the best alternative if the deal falls through. This gives you more power at the bargaining table.
• Don’t accept a bad deal: If the negotiation doesn’t meet your goals, your BATNA helps you walk away confidently. This could mean going with another buyer or taking a different route to close the deal.
• Use BATNA as leverage: Let the other party know you have options. This can encourage them to offer better terms.

3. Achieve a Negotiated Agreement That Satisfies Both Sides

A successful negotiation results in an agreement of mutual benefit that satisfies both parties. It’s not just about winning; it’s about creating a solution where both sides feel they’ve gained something.

How to do it:

• Focus on mutual benefits: Look for solutions that meet the needs of both sides. For example, in sales negotiations, you might offer a discount while the buyer agrees to a longer-term deal.
• Be flexible: Sometimes, finding a middle ground is the best way forward. This shows you are willing to compromise and fosters a trusting relationship with the other party.
• Close the deal professionally: Ensure both sides clearly understand the terms of the agreement. Document everything to avoid misunderstandings later.

Conclusion

Learning different negotiation types is key to closing successful deals. By sharpening your negotiation skills and using effective negotiation tactics, you can create win-win outcomes that benefit both you and the negotiating parties. Remember to always prepare with a clear negotiation strategy and be ready to adapt. These steps will lead to a strong negotiated agreement and long-term success.