10 Reasons Why Negotiation Skills Are Important


Negotiation is a common part of everyone’s life. Negotiation skills are not just only relevant for or important to professionals. Throughout the course of their lives, regular people, too, negotiate for a variety of reasons. 

For instance, a person might negotiate with a shopkeeper to reduce the value of a good (aren’t we all guilty of that?).

Or, they might negotiate with their partner about who’s turn it is to do the dishes that night. Or, someone in a job interview might need to negotiate with their potential employer about salaries and other perks. 

So, you can see why getting better at negotiation is beneficial for almost everyone. 

Negotiation skills are important both in the workplace as well as in personal life. In the workplace, they help you achieve long-term career success, boost productivity & reduce workplace conflicts. In your personal life, they boost your creative & reasoning abilities, make it more difficult for people to take advantage of you & make you a better strategizer.

But to get better at something, we first need to understand its method of working better. That’s what we’re going to do in the next section. 

What Is Negotiation & How To Negotiate? 

successful negotiation

Negotiation is a dialogue between two or more people or parties, with the intention of reaching a mutually beneficial outcome over an issue–or multiple issues–where a conflict exists. 

Negotiation involves an interaction between entities with the goal of agreeing on matters of mutual interest, while at the same time optimizing their individual gains. 

An important thing to note in this definition is that in a negotiation, the goal is to arrive at a mutually beneficial outcome. 

That is, the final outcome should be in some way advantageous to both parties. It shouldn’t be that one party gets everything they want and the other party gets nothing. 

Keep this goal in mind as we move forward. 

The next step is understanding what steps go into a negotiation process. This is a fairly straightforward answer. 

1. Preparation: The first stage in any negotiation is preparation. This involves making decisions on important matters like where the negotiation is to take place, how many people are going to be involved, etc. 

2. Discussion: During the second stage of negotiation, the parties involved put forward their own side on the matter and engage in dialogue regarding it. 

3. Clarification Of Goals: The clarification stage occurs in tandem with the discussion taking place. During the discussion, the parties involved form a clear idea of what the other person’s goals & expectations are. 

4. Moving Towards An Outcome: Once goals are firmly established, it’s time to figure out how to achieve them in a manner that’s mutually beneficial to both parties. That is, finding a win-win situation for the parties involved. 

5. Agreement & Implementation: Once a mutually beneficial outcome has been found, it’s time for the parties to formally agree on the outcome. This is followed by the implementation of the outcome in real life i.e by following the actual course of action, which can take place anytime in the future. 

Types Of Negotiation

There are many types of negotiation which have been described below…

1. Distributive Negotiation

Here, parties involved compete over a fixed pool of resources. A gain by one party often involves a loss on another party’s part. This can also be described as a win-lose situation.

2. Integrative Negotiation

Here, there is not one single issue but multiple issues that need to be negotiated about. Negotiators can make trade-offs across different issues. This has the greatest chance of being a win-win situation.

3. Team Negotiation

In a team negotiation, negotiation parties are comprised of more than one person. They can either be win-win situations or even win-lose situations. Major business negotiations often fall under this category.

4. Multiparty Negotiation

Multiparty negotiations involve multiple parties instead of a traditional two-party negotiation. For a successful outcomez they require more complex negotiating skills. International Negotiations often fall under this category.

5. One-Shot Negotiation

Finally, there comes the one-shot negotiation. In such a negotiation, parties have no intention of continuing a relationship forward. Thus, there are high chances of unethical behavior, as there is not felt a need to build trust between the parties.  

Importance Of Negotiation Skills In Professional Life 

people negotiating

1. Long-term Career Success 

Negotiation Skills are imperative if you want to be successful in the long run. 

To land a job and related perks that are beneficial to you as well as for the company involved, you must know how to negotiate. 

As you move forward in your career, you’ll find more instances popping up where you’re required to put your Negotiation Skills to use (for eg: taking a leave). 

This holds true for any position that you might want to hold in life: if you wish to secure it, you must know how to negotiate efficiently. 

2. Dealing With Clients 

Negotiation Skills are integral if you wish to lean how to effectively deal with & land good clients. 

These days, consumers have multiple options to choose from. As a businessperson, you need to convince them why what you’re offering to them is more beneficial for their goals than what someone else might be offering. 

At the same time, you also need to keep your own end goal in mind, so that you do not end up at a loss. 

Balancing both these goals requires considerable skill. Fortunately, the more you actually negotiate, the better you become at it. 

3. Increases Profit & Salary

Another way in which great negotiation skills help your business is that they increase your overall profit. This is because effective negotiation skills can be easily honed over time. As you grow better and better at negotiation, your bottom line also tends to slide upwards.

If your negotiation is cost-related, then this can directly add to your profit margin.

Also, if you’re an employee who’s worked at a company for a long time, you might be toying with the idea of a salary raise. In this case, effective negotiation skills can come to your aid. The better your negotiation ability, the better chances you have of securing a good raise.

4. Solving Workplace Conflicts

Conflicts are a common part of any life. They also frequently occur in the workplace and can be quite detrimental to the overall performance of a company.

After all, if your employees are constantly in a state of strife, then they won’t be able to collaborate effectively.

As a result of repeated conflicts, they might not communicate efficiently with each other. This can cause communication breakdowns in the workplace, further exacerbating the problem.

One way to solve this problem is through negotiation. This way, you can figure out the root of the problem between individuals–or even departments. You can have them sit down in front of each other and engage in a peaceful negotiation to figure out how to find a favorable outcome for both parties.

5. Builds Reputation

Another reason why effective negotiation skills are important in the workplace is that they help build the reputation of your company.

As you participate in more negotiations and progressively get better at them, other people start to recognize your negotiation skills. Over time, you may be able to climb to a stage where your reputation starts preceding you.

This will help your future negotiations, as well as build a better reputation of your organization.

Importance Of Negotiation Skills In Everyday Life

negotiation in everyday life

1. Builds Confidence

One reason why negotiation skills are important for everyday life success is that they help you become more confident. This is because, for a negotiation to be effective, you need to learn how to assert yourself.

Only when you learn how to assert what you want and stick to your point will you be able to arrive at an outcome that’s beneficial. Negotiation also helps you see your own value, and recognize your skills & abilities.

So, as you participate in more negotiations and hone your skills over time, your confidence also begins to grow.

2. Develops Interpersonal Skills

Remember how we mentioned that interpersonal skills are imperative for any negotiation to be successful? Well, consistently participating in negotiations helps develops your interpersonal skills, too.

Any skill that you repeatedly & consistently employ is bound to get better over time. As you use your interpersonal skills in a negotiation setting, they begin to grow & develop. Over time, you will find it easier to communicate with other people and to get them to like you.

3. Improves Reasoning & Creative Thinking Abilities

Another way that negotiation is helpful in your daily life is because it gives a boost to your verbal, creative & reasoning abilities. These abilities are imperative for any individual to lead a successful life.

Think about it: negotiation demands that you learn how to effectively communicate your ideas i.e verbal abilities.

During negotiation, you also require to reason with the other individual and get to see things from your point of view, or maybe to point out a critical flaw in their demand or argument. That is, you need to employ your reasoning abilities.

Finally, people often need to find out-of-the-box solutions to arrive at a mutually beneficial outcome. Enter your creative abilities.

4. Makes You A Better Strategizer & Planner

Negotiation skills also help you become a strategize in life. This is because when you enter a negotiation, you need to go with a game plan. You can’t just walk into a room and start debating with another person.

As you learn how to plan & strategize your negotiations better, you also become progressively better at transferring those tactics to your everyday life.

5. Makes It Difficult For People To Take Advantage Of You

When you’re negotiating with other people, chances are that they’ll try to figure out a way to take advantage of anything you say or do. Any wrong thing you say or a misstep you take might later be used against you, and cause you to lose out on a more favorable outcome.

As you negotiate, you tend to grow more cautious. You pay more attention to what other people are saying. You learn to recognize if they’re trying to take advantage of you. Over time, you might also develop strategizes to avoid being taken advantage of.

This skill can be directly applied to other life scenarios too.

Essential Negotiation Skills 

Now that we’ve figured out the nitty-gritty of what’s negotiation and how to go about doing it, let’s get a quick overview of the most important skills required in any negotiation. 

1. Rapport Building & Interpersonal Skills 

Rapport building is perhaps the most important negotiation skill required. Remember the main goal mentioned earlier? 

Since it involves both parties to arrive at a mutually beneficial agreement, imagine a scenario where the two parties do not get along? How, then, will they arrive at an outcome that’s beneficial for both of them? 

That is why rapport building & interpersonal skills are imperative if you wish for any negotiation to head in a desirable direction. 

2. Active Listening 

Active listening is an integral part of normal life. However, during a formal interaction like a negotiation, its importance becomes even more evident. 

Unless and until both parties are actually listening to what the other one is saying, how will they figure out what the other person wants & what’s the best way to align their goals with your own? 

So, it’s important not to zone out and wait for your chance to speak. Instead, actually, listen to the other person. 

3. Asking Questions 

To get a clearer understanding of what the other person wants, you need to ask them questions about their goals. 

While this might sound pretty straightforward, you’d be surprised at how many people don’t know how to ask questions well. 

To ask good questions that actually help move along the negotiation process, you need to ask more than just yes/no questions. Instead, try to ask questions that will garner you a more in-depth answer. 

4. Presenting Offers 

Offers are a common part of any negotiation process. Making offers is a skill in itself. 

You must know not just how to prepare such offers that support both of your desired outcomes, but also how to present your offer in such a manner that the other party feels compelled to accept it.

5. Planning 

Planning is an internal skill in normal life. Its importance becomes even more evident in negotiations. 

Unless and until you have done proper planning about how you’re going to actually be going about the negotiation, you’re inevitably setting yourself up for failure.

6. Communication Skills 

Communication skills are internal in normal life. But they’re also a super important skill that is essential in any negotiation. 

After all, the entire outcome of a presentation is based on how well the parties are able to communicate their ideas with each other.

Want to know why communication is essential? Check out our article on 13 Reasons Why Communication Is Important In Life.

7. Problem Solving & Decision Making Skills 

Another important skill for a successful negotiation is problem-solving skills. Since negotiation often involves rapid back and forth debate between the parties, problems & deadlocks are bound to occur. 

So, a good negotiator knows how to work around these deadlocks such that they can arrive at an outcome acceptable to all parties.

They must also know how to arrive at a decision that will be beneficial for them in the long run. This might sound easy, however, it involves quite a considerable amount of skill and experience. 

8. Keeping Emotions In Check 

Lastly, it’s imperative to keep your emotions in check and not to let them overcome you. 

Negative emotions like anger can make a good negotiation process go south, and make it more difficult–sometimes even impossible–to move forward. 

So, it’s important to keep your emotions in check during a negotiation. 

5 Tips To Develop Your Negotiation Skills

1. Do Your Homework

Don’t go impromptu with your negotiation. Do your research. Look up the person(s) you’re going to negotiate with and delve into their overall goals and aspirations. Figure out what they stand to lose–or gain.

Your homework needs to include you too. You need to figure out exactly what your end goal is, and what it will take for you to achieve it. Know your own value and worth. Prepare your facts and arguments in advance.

2. Remember It’s Not A Competition

You’re not there to outdo the other person or to win a competition. You’re there to negotiate with them and to come to a solution that works for both of you.

We’ve stressed this point many times in the blog, and that’s because so many people see a negotiation as a win-lose situation. But it’s not, really. A negotiation is supposed to be a win-win situation. Keep that in mind.

3. Get A Negotiation Coach

Yes, that’s a thing. If you’re not confident about your negotiation abilities or just want to improve your abilities, then you can easily find a coach to help you with it.

If you don’t want to pay for a coach, then you can look around yourself and figure out if there’s someone you know who is excellent at negotiation. Ask them to share their tips with you, and next time you negotiate, try to employ them.

4. It’s Okay To Make Mistakes

Negotiation is difficult, and to do it effectively is even more so. Mistakes are bound to happen. Often, when people realize they did something wrong, they tend to turn defensive or showcase negative emotions like anger.

This can negatively impact any progress that you might’ve made, and make the entire negotiation go downhill. So, if you recognize that you made a mistake, remember that it’s okay to do so.

5. Know When To Walk Away

Not all negotiations are successful. Just turn on a news channel and you’ll know what I’m talking about. Sometimes, people simply can’t see eye to eye. Some people are just not willing to negotiate–even when that’s exactly what they’re sitting across the table for.

So, always have a hard line in place. If you feel like someone is crossing it, don’t fall under pressure and agree to a less or unfavorable outcome. Know when it’s time to walk away.


To sum up, negotiation skills are imperative not just in the professional setting, but also for normal people. Negotiation is not just a single skill but a combination of a variety of skills like active listening, interpersonal skills, rapport building, etc. Good negotiation skills are essential if you wish to move forward in your career, and also if you want to achieve progress in life.

Enroll in our transformative
1:1 Coaching Program

Schedule a call with our expert communication coach to know if this program would be the right fit for you

Scroll to Top

Kindly drop your contact details so that we can arrange call back