One of the best parts of working as an independent professional is the flexibility it offers. Unlike the fixed parameters of a corporate environment, working for yourself means that each client knows there’s usually room to negotiate. Especially when it comes to clarifying project deliverables, timelines, and contracts, negotiation is a key element for freelancers in ensuring that both you and your client mutually agree on the best way to work together.
Outsized recently hosted a community event led by Deric Goh, a seasoned consultant with over 30 years of experience in negotiation, sales, and distribution. His approach to negotiation rests on the principle that great negotiators are made, not born, and that anyone can learn and practise their way to success. We’ve gathered some of the top learnings from the session below.
Unfortunately, many prevalent myths about negotiation for freelancers can be detrimental. Negotiation is not a zero sum game with a winner and loser. It’s a mutual agreement that aims to create value for the benefit of both parties. There’s no need to lie or argue aggressively to negotiate your way to a win. And since negotiators are made, not born, those inclined toward being argumentative or twisting the truth don’t automatically get the upper hand! Leave any threats or empty promises at the door. Even if you think they’ll give you an edge, crossing ethical boundaries for short-term gains will hurt you greatly in the long-term.
All negotiations can be separated into two distinct categories. The first is distributive negotiation, in which each party only considers their own gains and focuses on maximising their benefits. This is often seen as a win-lose negotiation. A simple example of this is a negotiation focused solely on pricing. A seller wants to sell an item for as much as possible, while the buyer wants to pay as little as possible. There is only one element of value (the price) to be gained or lost, and therefore only one winner.
The second type of negotiation is integrative negotiation. In this type of negotiation, each party aims for a win-win situation. Instead of just focusing on price, the parties can bring in new elements to the negotiation that have mutual benefits. For example, the seller can agree that if the buyer refers three friends, they can receive a discount on the price of the item. Or, the seller can offer post-sale services at a discount.
To effectively apply these negotiation strategies, it's crucial for freelancers to set the right price for their services. Discover our guide on effective pricing to prepare for successful negotiations.
Before heading into an integrative negotiation, it’s critical to do some prep work to understand your priorities and what you’re willing to be flexible on. Deric breaks down the pre-negotiation work in the following way:
Remember that the other party is likely doing similar prep work before walking in through the door.
Each side should also have a clear idea of their BATNA – the Best Alternative To a Negotiated Agreement. If the agreement falls through, what’s your backup plan? The more backups you have, the better. Try to get an idea of what the other party’s BATNA is so you can be better prepared for the negotiation.
“If you can’t control your emotions, you can’t control anything,” says Deric. Emotions don’t have an on/off button that we can press before tense discussions, so it’s important to learn how to manage them. Deric goes on to mention the importance of self-awareness, empathy, and resilience. Learn to understand and name the emotion that you’re experiencing. Practising empathy, both for yourself and for the other party, helps build trust between parties. And if there’s any type of bullying, or the other party is picking on you because you seem weak, focus on standing your ground and maintaining your resilience.
If these sound difficult to do, especially in a high-stress, high-stakes environment, there are ways you can practise. Mindfulness, such as taking deep breaths or meditating, can help increase self-awareness. Identify the triggers that make you or the other party emotional and pay attention to your tone and language. If you’re still having trouble, don’t be afraid to seek psychological support. Lastly, move your physical body – exercise does wonders in helping you manage your emotions.
If you don’t build rapport and trust with the other party during the negotiation, you’ll only experience short-term benefits, and miss out on a sustainable business relationship. Develop a trusting relationship by actively listening and staying transparent. Remain empathetic, understanding that the other party might want to give you what you want, but has the additional burden of convincing upper management, too.
Stay positive, in both your words and your demeanour, even when you’re rejecting an offer. Once the deal is over, follow up to check that everything’s on track and ask if there’s anything you can help with, extending the relationship beyond the meeting room. This keeps the communication channel open to discuss future collaborations.
If you’re ever in a last-minute negotiation, or one you just didn’t have time to prepare for, do your best to delay the discussion. Preparation is the most important part of a negotiation, so you should do everything you can to give yourself time to get ready. If there’s absolutely no way you can avoid the conversation, do your best to give a response that’s noncommittal, and one that offers you the wiggle room to backpedal, if needed, later.
As you’re heading into your next negotiation, remember that the bulk of the work happens before you even step into the room. Take your time to prepare, identify your BATNA, and practise emotional regulation. Don’t think of the negotiation as a zero-sum game but as a way to create value across the board. Most of all, remember that anyone can improve with the right training. To take the first step yourself, watch Deric’s full training here.