There are two fundamental approaches to negotiation, and a very simple decision to make to decide which one to use. The approach to take depends on whether you care about the other party.
When you don’t care
As an example, this happens in residential real estate during a for-sale-by-owner transaction. If a broker unknown to the seller presents a buyer, then there is no relationship for the seller to worry about; there are no future deals or business or relationships to be concerned with. Assuming the seller doesn’t sell that many properties, his objective is to get as much as he can, since he has no reputation or relationship to protect.
In this approach, agree to things only if you think not agreeing will undo the deal, and you have no other choice. If you have another choice, like a backup offer, then there’s really no point in compromising on anything. Do the right thing in your mind. If it doesn’t feel right, the answer is “no”. If you’re labeled uncooperative, unreasonable or worse – you really don’t care.
You should still determine what the other party’s real needs are, because otherwise you may just push them out of the deal when it wouldn’t have cost you much to meet their needs.
Because you don’t care enough to give anything, you also don’t care whether the other party cares or not. That’s not the case with the other model.
When you do care
This is the usual state of affairs. It happens in business because you care about repeat business and collaboration. In this model you should spend a lot more time listening. Everyone talks about “win-win” scenarios. You can’t find them if you don’t try, but if you do try, it will be apparent to the other party and hopefully it will be reciprocated.
Someone told me years ago that most people debate solutions instead of the problem. This is very true and it is essential to understand when that is occurring in this model of negotiation. If you can figure out what they really need, and meet their needs without giving up something you really need, you’ve just earned respect and the next deal.
In this model, if you care and the other party also cares, the best path is to share needs and desires openly and hope that you can find something that works.
If the other party doesn’t care, then you should tread carefully and decide how badly you need the deal.
This post is also the subject of a Leadership Minute Video at https://www.youtube.com/watch?v=RNZo7-zVa3M.