Many people lose the negotiation before even starting to prepare for it:
“What if I ask for more and they withdraw their offer? They wouldn’t do that--I don’t think. Am I really worth more? Sure I am. Am I really? What if there’s another candidate? Even if there isn’t, they could think, “He’s only doing it for the money, Let’s find someone who’d be grateful for our offer. Damn!”
Many of us are up against more experienced negotiators and the cards are stacked against us both in savvy and in our psychology. How can we give ourselves a better chance?
Other options. The most potent way to boost your confidence is to have at least one other option. Let’s say you’re a job seeker and, at long last, received a job offer. You’re at risk of accepting a lowball deal.
As soon as you know an offer is coming, instead of the usual tendency to stop looking for another, look twice as hard. With an offer in the offing, you’ll appeal more to other employers. Imagine you were an employer considering two candidates: one unemployed and one with an offer but before accepting it, wanted to know if you were interested. Wouldn’t the latter intrigue you more? Your redoubled last-minute efforts could yield a better offer or at least more confidence in negotiating the first one.
Face the worst. Worst case, they withdraw the offer. If they did that in response to your fair-minded negotiation, chances are they’d treat you even worse once they’ve got you. You'll probablyl find a better prospect elsewhere.
Negotiate gently, even with a shark. Gentle people are intimidated in negotiation because they fear they’re unalterably less sharklike than their opponent. That could well be true. An antidote: negotiate gently. Even sharks get calmer amid calm.
Think of the person as your negotiating partner rather than opponent—You’re a statesperson trying to come to a solution that both parties feel good about. Yes, some sharks take advantage of that but if they do, perhaps you can muster the courage to realize, as I just mentioned, that’s not who you want to work for and that you should walk away. Usually, there are better opportunities than one from someone who’s already treating you unfairly.
Think cosmically. Especially if you're feeling oppositional to your negotiating partner, it may help to put yourself in his or her shoes: Might s/he lack the power to offer you more or be under real pressure to control costs? Of course, you'd prefer s/he control costs other than by minimizing your pay but it may at least be worth considering that.
It may also help to think of what's cosmically fair: What would a judge deem fair to both sides? The goal is not to get the best deal you can. It's to get a deal both parties can feel okay about and which seems just.
Be soft on the people, hard on the numbers. If you attack your negotiating partner’s motives or behavior, you risk their withdrawing the offer. Keep focus on the offer and on what’s fair. The magic word in negotiation is fairness: Using it throughout the negotiation may well yield a better offer even from a more powerful negotiating partner.
Negotiate for what’s easy to get. Sometimes, your negotiation partner has more flexibility on the negotiation's non-cash items. For example, if you’re negotiating employment terms, the employer may more easily be able to grant your request on job description, job title, whom to report to, date of salary review, flex-time, telecommute, training budget, administrative support, car allowance, etc. Don't assume the employer is simply trying to say no to everything. See if you can find things s/he can easily agree to.
Ask for their offer. If they insist you make the offer, give a range. Try to preempt their asking you how much you want. If you ask too little, you’ve given away money. If you ask too much, you may scare them away. Instead, at the first point in the conversation when the vibes are good, ask something like, “What’s the most the organization (not ‘you’) feels comfortable paying? If they insist on your making the offer, provide a range. In advance, do your homework and then offer a fairly wide range that’s on the high side of fair, explaining how you arrived at that range. For example, “Depending on the nature of the position, having reviewed comparable salaries, $95,000 to $115,000 is fair. Does that seem reasonable to you?”
The pained pause. This technique could earn you the highest hourly rate you’ll ever earn. When your negotiating partner makes a too-low offer, look him or her in the eye without emotion and say nothing. That can make the person feel guilty and perhaps increase the offer. I’ve had a number of clients make thousands of dollars with just that few seconds of silence.
Get ready for ploys. Negotiation training usually teaches ploys. A common one is to feign indifference: The negotiator pretends s/he has all the time in the world and doesn’t really care whether the deal is made. Remember, that’s usually a game. Be equally relaxed. You might even play their game—ask for a bit of delay.
Another common tactic is the higher-authority ploy. After your negotiation partner has extracted the best deal s/he can from you, s/he says, “Sounds great, I just have to get it approved by the boss.” S/he then comes back and says, “I’m shocked but my boss said it has to be 20 percent less. Non-negotiable.” A possible preemption is, before negotiating, to ask, “Do you have full authority to negotiate this?” If not, say, “To avoid unnecessary back and forth, may I negotiate with that person?” That won’t always work but few things are musts—Do the best you can and then, when it’s immutable, let it go.
Be amused rather than angered by the ploys. They’re all part of the game. If you take offense, you’ll likely pay too big a price.
Reject the first offer; accept the second. If their second offer seems even borderline fair, it's typically wise to take it. Usually, any more you get after that isn't, after taxes, worth it. Why? Because it's unlikely to change your lifestyle yet your negotiating partner may then expect too much of you, deem you expensive and thus look to terminate the relationship at the earliest opportunity, or even retract the offer. But don't jump at an offer lest your negotiation partner feel s/he could have gotten you for less. Just calmly say something like, 'Well, I guess I can accept that."
Feeling good about losing. Let's say the best deal you can get is a lousy one. Yes, sometimes, it's wise to walk away but other times, even a lousy deal may be worth taking. For example, if you really want to do that work or feel you’re unlikely to find a better offer soon enough, it may be worth swallowing your pride. Again, think cosmically, in terms of the largest scheme of things. That may seem a strange way to make decisions but after you start thinking that way, you may always want to think that way.
Wikipedia’s profile of Marty Nemko tells you more than necessary.