Everything You Need to Know About the Three Phases of Negotiation

The process of negotiation helps two parties come to an agreement and determine how to work together for the betterment of them both. Negotiations are used in all sorts of everyday conflicts, both personal and professional. To be successful, a company needs strong negotiation skills on hand. Done well, negotiation in business can provide serious advantages to your company and open up new opportunities for growth.

That isn’t to say negotiation is easy. If you’re hoping to use negotiation to expand your skills and increase your value to your company, you need to take the time to practice negotiation. Once you understand the basics of negotiation, you’ll be able to practice the steps and train more effectively.

Negotiation Phases

A strong foundation of the basics gives you a good starting point from which all your negotiations can begin. The main three phases of the negotiation process are preparation, probing and listening, and proposing your offer.

1. Prepare

The first step to any strong negotiation is careful and researched preparation. This provides solid groundwork for conflict resolution and negotiation. You want to understand the needs and goals of the other party and rehearse how negotiations may play out, both negatively and positively.

Before you even get to the negotiation table, you want to understand their position and know your own company’s position. Determine your plan for negotiation strategy, then decide on what is and isn’t an acceptable outcome of the negotiations. Check the strengths and limitations of the other party and understand what they hope to gain on the other side of negotiations. As you look for relevant information and data, remember that negotiations are not about proving yourself right at the other party’s expense. Instead, you want to be informed on all aspects of the discussion and work towards a mutually beneficial solution.

This is the only step of negotiation where you and your business have complete control, and the more prepared you are, the more effective your negotiations are. The sooner you begin your preparations and research, the better. A strong understanding of the facts and negotiation process will provide you with better outcomes.

2. Probe and Listen

Once negotiation has begun, this is your opportunity to learn more about the other party. Not all information is available to you during preparation, so take this time to better understand their position from the source and listen intently. This is when both parties should communicate where they stand in negotiations and see if a positive and beneficial outcome can be reached.

Listening and asking the right probing questions allows you to grasp the needs of the other party even more effectively. Practice mindful listening and compare what you learn to your assumptions and findings from the preparation stage. Asking good probing questions will help you learn more and achieve better deals and establish a better relationship with the other party. Practice asking open-ended questions, ones that determine the heart of the conflict or reason for negotiations. Clarify any gaps in your knowledge. Gathering information before setting down an offer can also help you avoid an anchoring bias.

While this is part of the negotiation process, full-blown negotiations haven’t begun. Instead, both parties are only beginning to determine where the other stands and work out potential terms for an agreement. You don’t want to make any commitments or brush past this step too quickly. This stage of negotiations is essential to a long-lasting and positive business relationship, so invest your time wisely.

Use this stage to establish a rapport and common ground with the other party. The stronger your starting relationship, the more likely your needs and goals are to be heard and given merit. If both parties feel more comfortable and able to trust each other, communication and cooperation are more likely.

3. Propose

In this phase, real negotiation begins. Research, discussion, learning, and clarification have all occurred. Utilizing all that information, you can propose a potential solution and listen to the offer made by the other party. Both parties will then work through solutions until a mutually beneficial option is found or negotiations may falter. Beginning the bargaining and negotiations doesn’t mean you have to continue in this phase. If the initial proposals didn’t land, both parties can move back to probing and listening to more effectively understand the needs and limits of the other party before proposing a new solution.

This is a very critical stage of negotiations. You want to maximize the benefits for your business while providing satisfactory benefits for the other party. Pay attention to the words and actions of the other party and how they verbally and non-verbally react to your proposals. It’s essential to remember that while you want high benefits, the most important goal is that you both agree on a beneficial solution. Concessions and compromise are honed skills needed for this bargaining.

Once a solution is found, make the agreement official, and ensure both parties have a full understanding of the terms. A future follow-up can work to strengthen the relationship you established during negotiations while also affirming that the agreement is being followed by both parties.

Practice and Prepare

As an individual representing a company or business, you likely feel the pressure of ensuring beneficial negotiations. Be aware that this process takes time and practice – and both of those are tools in your arsenal. Learn the basics of the three phases and branch out your understanding of negotiations from there. You have the most control over how much you practice negotiation skills and how much preparation and research you bring to the table.

The most effective way to practice and improve your negotiation skills is through professional training. For expert negotiation training as a business professional or leader, contact Shapiro Negotiations Institute.