1.5 When Is It Appropriate to Negotiate?

Now that you have been introduced to negotiation, at this point you may be asking yourself: In what contexts is it appropriate to negotiate, and in what contexts is it inappropriate? Where is this skill applicable to my life, and where isn’t it applicable?

As it turns out, negotiation has a role to play in nearly all aspects of our lives, from work to personal relationships to politics. Negotiation is everywhere. Whether you know it or not, we are constantly engaging in acts of both formal and informal negotiation. However, this is not the same as saying that you should approach every situation in life as a negotiation. As with anything else, context is key when it comes to negotiation. Knowing when to negotiate is just as important as knowing how to negotiate. To familiarize yourself with these contexts, consider some of the following:

1. Do your background research on the context in which you’re attempting to negotiate.

Some cases will be clearer than others. For instance, you wouldn’t think to walk into Walmart and attempt to bargain with a cashier about the price of oranges. You know they’d just laugh and tell you the price is fixed. They would also tell you that even if it isn’t fixed, they certainly don’t have the authority to change it. However, if you went to a farmer’s market, it would be appropriate to haggle with a seller on the price of a sack of potatoes. These examples we intuitively understand based on our common experiences. But what about when it comes to situations with which you have no prior experience? In these instances, the best you can do is prepare in the ways that you can. Look to the internet and those in your professional and personal circle to see if anyone else has experiences to share that illuminate what does and doesn’t fly in that particular context.

For instance, you might find success negotiating your salary for a job at a corporation, but perhaps less success doing so for a position with a nonprofit, especially one with an explicitly charitable mission. In America, you can negotiate the price during the purchase of a vehicle. But in other countries, or even at certain dealerships, the price of a vehicle is fixed, and any attempt to negotiate that price would be taken as an insult. While it is important to pay attention to how important negotiation is to our day-to-day lives, you cannot treat everything in life as a bargain. Otherwise, you run the risk of alienating people and even putting yourself at a disadvantage in your professional life and social circle.

Generally speaking, the higher the financial stakes are, the more likely they’re negotiable. Minimum-wage employees don’t usually negotiate their pay rate with their employers, but for those in corporate jobs, negotiating pay is common practice.

2. Decide whether it’s worth your time to negotiate.

Have you ever heard the phrase “pick your battles”? Time is perhaps your most precious resource because of its finite nature. In some instances, what you would gain from a negotiation in resources will be lost in time—that’s not an insignificant calculation to take into account. This is the reason you hear many people decide to settle their legal disputes out of court. Everyone’s time has a price—the lawyers’, the clerks’, the judge’s, and even your own. In many instances, it’s not worth the sheer effort of going to court just to be awarded slightly more.

Sometimes, negotiations do not begin and end on the same day. In fact, some negotiations, depending on how complex they are, can be drawn out over a period of weeks or even months. Therefore, when you decide to negotiate, you have to take into consideration how the potential benefit of a favorable outcome weighs against the potential time frame of the negotiation. Also, if you are unsure of what that time frame will be, then often there’s no harm in asking.

For instance, let’s say you were to discover that your current bank, Bank A, has a mortgage interest rate that is considerably higher than its competitors. You go to Bank A and inform them that you want to refinance your home for a lower interest rate or else you’ll take your business elsewhere. The representative from Bank A tells you that their interest rates are firm. So, you go to another bank, Bank B, and find out that they can give you a rate that’s lower than Bank A’s by 0.5%. However, when you report this information to Bank A, they attempt to dissuade you from leaving by warning you of a two-month waiting period before they can release your mortgage and disclose lots of other red tape. Instead of being completely discouraged, however, you then try another bank, Bank C. You find out that their interest rate is an entire 1% lower than your current one. They also have a customer service division that will take care of the paperwork for you, thereby saving you the time and hassle. This information came at no additional cost to you, except for maybe a 15-minute phone call. It didn’t cost you much to ask a question.

3. Pay attention to context cues.

For instance, if you are given a written offer as part of a hiring process, you may believe it’s absolute and that it cannot be negotiated because the offer is in writing. However, if you think about it, the fact that they are giving you an offer in writing means they are committed to giving you a certain amount of value in exchange for your labor and time. They intend for you to look at what they are offering and to consider all the aspects of it holistically. That way you can decide whether you agree to it or whether you believe you ought to be given a better offer.

You are in a good position to negotiate when you can clearly demonstrate the value of what you are offering to another party. As long as you are confident in your own value, then no one can convince you that you are worth less or that you ought to take a lower offer in exchange for your value. Having a strong sense of your own value will allow you to worry less about what you are bringing to the table and more about what the other party is bringing to the table. That is the confidence you need to make decisive, rational choices about the degree to which you and the other party benefit from negotiating together.

Conversely, there are certain contexts in which you should not negotiate. For instance, if you have no legitimate justification for making a demand of the other party, then your interests will be written off as outlandish and unrealistic, and you will not be taken seriously. You must negotiate commensurate to your esteem and level of authority between you and the other party. If you receive an offer for an entry-level position, you wouldn’t negotiate for a salary equivalent to that of the company CEO’s. Furthermore, you should not negotiate if you have no intention of accepting any offer you receive or if you are using negotiations as a guise to gather information. There’s a name for this: acting in bad faith. It is a surefire way to ruin your reputation and be seen as someone who wastes others’ time. Lastly, there’s no point in negotiating if your best alternative is better than what is being proposed. (Your best alternative to a negotiated agreement, or BATNA, is the most advantageous action for you to take given that negotiations are unsuccessful. We will discuss this concept further in Chapter 4.) Knowing that, you should have no difficulty walking away from the negotiation altogether, since you know there could be a better option for you out there.

4. When in doubt, lean on emotional intelligence over common sense.

In this context, emotional intelligence refers to one’s ability to interpret and navigate their own emotions and the emotions of others with minimal conflict or difficulty. As you might imagine, this is an essential skill when it comes to conflict management, as it is the primary method by which one might avoid unnecessary escalations and side conflicts. If you are sensitive to the other party’s emotions and are able to decipher emotional cues from speech patterns, facial expressions, body language, and other subtle cues, you can tailor your own strategy to the emotional state of others. This will increase your chances of reaching a resolution successfully. Moreover, others will intuitively sense your own emotional intelligence and will respect you for it. They will be able to focus more closely on reaching a compromise since there are fewer emotions to distract them.

Do not be concerned if you would not immediately consider yourself as someone with great emotional intelligence. It is a skill that anyone can develop with time and patience. All it takes is getting more in touch with your own emotions without feeling like you have to act on them. When you practice this, you will begin to notice the way others succumb to their feelings in matters that require focus and objectivity, and you will find yourself much better equipped to handle disputes. No one has ever successfully resolved a conflict with outbursts and tears. A conflict can only be resolved with a level head. Keeping a level head even in the face of adversity requires a degree of emotional intelligence that you can only develop through consistent and conscientious practice in your day-to-day life. If you can do this, you will discover how to reach decisions from a place of pure logic.

To that end, this also means not taking things so personally. This can be difficult when another party may take things personally and then take it out on you. However, it is essential to remain emotionally distanced from any conflict in which you take part. The minute someone becomes angry or defensive, they lose their standing in an argument, and ultimately, the respect of those involved. Remember that the goal is not just to get your way but to reach an agreement.

Unfortunately, what we collectively refer to as common sense is most often a series of assumptions. You should rely on your emotional intelligence instead of on assumptions in order to make the best judgment about whether or not to negotiate. You should try to remove any assumptions and preconceived notions you may have about a situation and approach it with an open mind, fresh eyes, and emotional intelligence. Though negotiation is used everywhere, negotiation is personal. Depending on our culture and background, we all have our own idea of what negotiation is and isn’t. Instead of relying on your common sense to understand another person, be emotionally intelligent, be observant of their mannerisms and behavior, and ask perceptive questions to get the information you need in order to read the situation properly.