What Are the Best Tips for Strategic Negotiation?

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  • Written By: Sheri Cyprus
  • Edited By: Heather Bailey
  • Last Modified Date: 07 October 2019
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The best tips for strategic negotiation in business include never underestimating the power of listening. While it can be tempting to become overly talkative during business negotiations, employing good listening skills can be a better strategy. By first understanding the other party's main needs, this can set the stage for later negotiations based on providing these in exchange for what best suits the business. Persuasion is required in effective strategic negotiation and creating a compelling offer is simpler with a clear understanding of exactly what the other party hopes to get out of the business deal. Creating a relationship rather than an argumentative stance during business negotiations can further the effectiveness of the listening strategy.

For example, a commercial company negotiating product pricing with a supplier is likely to receive a better deal by creating a working relationship rather than simply asking for the best business-to-business (B2B) cost possible. Doing research on the supplier to first find out its order minimums, standard pricing and main product lines is crucial in forming a position of strategic negotiation. The representative of the supplier is likely to appreciate the understanding the company has of its terms. If the company can show that it won't need a lot of time by the supplier in explaining ordering policies, but rather that it will be a quick, easy sale, the supplier is more in the position to provide the low pricing the firm wants.


A respectful relationship approach created through making the work required as easy as possible for the other party is always best in strategic negotiation. It's also typically best to then let the other party make the first offer during the negotiation stage. This allows the first party the ability to have the power of either taking the offer or making another suggestion. Usually, it's not a good idea to take the first offer. In many cases the party who made the first offer is willing to go away from that amount closer to what the other party wants. In most cases though, both parties will have to compromise to reach an agreement.

Once an agreement is reached, the best strategy is to have a contract created for both parties to sign. It may take several drafts of a contract to satisfy both parties. Once this agreement is reached though it makes the strategic negotiation clear for both parties. A win-win negotiation is reached if the company receives a good price for the products it wants and the supplier has a customer "locked in" to purchase a stated amount of product.


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