How to Negotiate Effectively: 7 Stages of the Negotiation Process


The negotiation process has several stages to help negotiators reach a win-win end. Getting these rungs under your belt and coupling them with skills learned from a negotiations class can help you hit the ground running. Here are the seven stages to help you get the entire process right.

1. Preparation

As the adage goes, “By failing to prepare, you are preparing to fail.” In fact, Massachusetts Institute of Technology’s Sloan School of Management professor Jared Curhan agrees that any successful negotiation depends 90% on preparation and 10% on the actual talks. Preparation involves digging for information about the other side, such as their needs, objectives, and negotiating style. This insight can help you get your arguments and offers ready. It can also come in handy in crafting a strategy that makes room for shared interests.

Being ready also involves nailing down your own goals, priorities, strengths, and weaknesses. Such facts can help you develop clear, measurable, and realistic objectives. It can also be useful in deciding how to use your best alternative to a negotiated agreement (BATNA). The best negotiation classes define BATNA as the course of action you will take if you and your partner seem to have hit a wall before reaching a middle ground.

2. Opening


The opening stage tends to set the tone for the rest of the talks. During this time, you can get to know each other and snatch every chance to build rapport and trust. Working your way into your partner’s good books can create a positive atmosphere for the discussions. Practical ways to build rapport and trust include:

  • Being honest even during small talk.
  • Adopting a collaborative demeanor.
  • Finding common ground.
  • Practicing active listening.
  • Showing genuine empathy.

The opening stage also involves setting ground rules to help you and your partner stay on the same page. This includes reviewing the agenda and establishing time limits. It’s also an excellent time for each partner to lay their objectives on the table.

3. Exchange Information

This is the stage when you and your partner can declare initial positions. Each side will share their interests, hopes, and concerns. This might include price, payment terms, delivery dates, and warranties. Regardless of the topic, fight any urge to interrupt your partner. Active listening can allow you to get to know the other side’s feelings and what they look forward to getting from you.

One tactic you’re likely to be taught during a negotiations class is letting the other side make their case before you make yours. On top of being a polite gesture, this also gives you a chance to scope out the scale of their offer. You can then use this to review your terms for better outcomes. Asking questions that place the focus on your partner can also make them feel valued and freer to open up. These questions include:

  • What challenges are you facing?
  • How are you trying to solve those pain points?
  • What’s your success rate?
  • Are competitors meeting any of your needs?
  • What other solutions are you looking for?

4. Bargaining

The actual negotiation takes place at this stage. This is when you and your partner can trade offers and counteroffers to find common ground. You and your partner can delve into each item laid out at the information stage. If you disagree with something the other side says, tabling it in a cordial tone can help clear the air.

Making sound offers and thought-out concessions is a great way to keep the talks from faltering. Be wary of letting emotions get the best of you. Losing your nerve can lead to rash decisions and may derail the process. Instead, hang your claims on solid data to help build trust and credibility.

5. Closing


Once you strike a mutual agreement, you know that you’re likely at the closing stage. This is when the deal is deemed ripe for being drafted into a contract.

Summarize the agreement to make it easier to review and grasp its terms. Once each side is at home with the outcome, have the deal signed. Getting signatures will make the document legally binding.

6. Implementation

Without putting a deal into action, all previous efforts and resources can be a sore waste. Therefore, following through on the agreed-upon terms can help you avoid such a futile end. Most negotiation courses regard implementation as the main event of an agreement. They put a great premium on both sides fulfilling contractual obligations, such as making payments or delivering on the agreed-upon goods or services.

Implementation also involves keeping your eyes open to pinpoint any bottlenecks, as well as opportunities to nip any disputes in the bud to avoid rattling the contract rollout. Keep records of all physical and digital communications related to the deal, including invoices. This will help in the event of a tiff or legal action. This stage also may involve reviews of the contract, renegotiation of terms, and updates based on changes in circumstances.


7. Evaluation

Once the finalized deal is in motion, it’s time to size up the outcome. This may involve assessing the success of the negotiation process, pointing out areas to fine-tune, and thinking about what you learned. You can also pinpoint what to strike out in future negotiations if there are items that seem to have added little or no value.

In addition, most negotiation classes suggest reviewing and comparing the contractual terms to the actual delivery by the partners.

In conclusion, the negotiation process can be a complex feat. That being the case, taking it one stage at a time will likely make it easier. By following these stages and using effective negotiation skills, you can work towards win-win outcomes and build positive, long-term relationships.

Written by Kan Dail