How to Negotiate for Anything

Negotiation is a universal art, but many of us are surprisingly bad at it, especially those raised in cultures in which bargaining is not the norm. (I once participated in a panel on how to run a successful freelance business; at least half the audience confessed to almost never negotiating with their clients over rates.)

Even if you consider yourself an old hand at getting the best of your bargaining partner, I urge you to check out the Dec. 21 podcast of Planet Money. It’s about how to negotiate for things, especially when you’re Barack Obama and the US Congress and you’re trying to avert the fiscal cliff. I’ve distilled the lessons contained in that episode, plus a few from the literature, below.

1. Know your BATNA

Across all negotiating strategies—and this is a vast field of academic inquiry—one universal requirement for winning is confidence. The easiest way to be confident in a negotiation is to not have to fake it, and that means knowing your “best alternative to a negotiated agreement,” or BATNA.

When negotiating over a salary, your BATNA is whatever wage someone else is ready to pay you to do a similar job. That’s one reason that leveraging a competitor’s attempt to poach you is a tried-and-true method for getting a raise: that competitor’s offer is your BATNA in any renewed salary negotiation.

2. Expanding the pie

When negotiating, the human mind is automatically drawn to the point of contention, whether that’s the issue of new taxes or the price of an item. But that keeps both sides from realizing that there are other things that could be on the table, but aren’t. For example, when two companies are negotiating a licensing deal over intellectual property, one sweetener that is sometimes offered is a cross-licensing deal. In other words, instead of Apple simply paying Google for the right to use some of its patents, Apple might also offer the use of some of its own patents as part of the deal.

This negotiating technique is also known as “integrative bargaining,” and it’s the basis of William Ury’s bestselling book Getting to Yes. (Ury co-founded Harvard University’s Program on Negotiation.) The idea is that if both parties lay out their needs in advance, rather than keeping information hidden from the other party, each side can seek to meet the needs of the other in a way that’s mutually beneficial.