Good negotiation is the kind that creates value. How do you achieve that?

Negotiation is often seen as a competition where the winner takes all and the loser walks away empty-handed. That’s likely why some people fear it. But a good negotiator’s goal should be to ensure both parties walk away with the best possible outcome. It’s not a contest—it’s collaboration.

Distributive vs. Integrative Negotiation

In negotiation, you can either divide existing value or create new value. This gives rise to two types of negotiation. To understand the difference, imagine the value being negotiated as a pie:

• Distributive negotiation confirms and divides the value according to a win-lose scenario—one side takes a bigger slice, leaving less for the other.
• Integrative negotiation creates value and focuses on ensuring both parties leave satisfied, aiming for a win-win outcome rather than simply splitting the pie.

Negotiating Multiple Items

Distributive negotiations usually focus on a single item (such as price), where both parties are truly competing to claim that item for themselves.

However, such one-dimensional negotiations are quite rare. More often, you're negotiating multiple factors—not just price, but also delivery timelines, additional services, and more. Through trade-offs and other strategies, both parties can create value for one another.

Michal Musil from the GrowJOB Institute illustrates this with a story: he brought shirts for repair and pants for hemming to a tailor. When they discussed price and delivery time, Michal noticed the tailor was swamped with work and that he wasn't in a rush. He offered to pick up the clothes in three weeks if she gave him a better price. He traded something that was more valuable to her (time) for something that mattered more to him (cost). Both left the negotiation satisfied.

How to Create Value in Negotiation

According to the book Getting to Yes: Negotiating Agreement Without Giving In, a good negotiator aims to reach a wise agreement—one that satisfies the interests and needs of both parties as much as possible. This way, everyone walks away from the negotiation satisfied and open to future collaboration.

To achieve such an agreement, you need to know both your own and your counterpart’s reservation value—your respective walk-away points (as discussed in our article on negotiation preparation). When these reservation values overlap, they form the ZOPA (Zone of Possible Agreement)—the space in which a deal can be made. In negotiation literature, this is often illustrated as the “negotiation pie.”

You also need to understand which items are part of the negotiation and how important they are to each party. That knowledge will help you use them strategically to multiply the value created during the negotiation.

Mechanisms for Creating Value

1) Negotiate as Many Items as Possible

The more items you include in a negotiation, the more value you can create. So if you're only negotiating over one item (like price), consider whether you can bring others into the discussion.

These could include:

• Delivery date or project completion timeline,
• Financing terms, invoice due dates, or issuing advance invoices,
• Product quality or the level of experience of the team working on the project,
• Additional business opportunities, exclusivity, or contract duration.

2) Trade Items to Create Value (Logrolling)

Actively look for opportunities to create value in negotiation. If you discover that the other party values certain items more than you do, let them have those—but take more from items that matter more to you.

Michal Musil illustrates this with an experience negotiating with a hotel chain where he was giving lectures to employees. “We were negotiating the number of lectures and the price, but got stuck. The owner needed to stay within budget and wanted to reduce the price by 30%. I didn’t want to do that, as we try to maintain our pricing. So I considered under what conditions we could reduce the invoice value. I brought two new items into the negotiation and traded them for a 20% discount—the hotel agreed to purchase our book as a gift for employees, and to offer barter rental of their space for our training sessions.”

This deal expanded the negotiation pie:

• For GrowJOB, the agreement was more valuable than invoicing the full amount (they gained training space),
• For the hotel, it meant a discount and the use of their space during low-occupancy times (the trainers stayed two nights and the hotel could offer them additional services).

3) Identify the Other Party’s Priorities

Never leave the negotiating table without understanding the other party’s priorities—it may benefit you in future negotiations.

They likely won’t tell you directly, so you’ll need to be observant. Are they more emotional about a certain item? Are they less willing to make concessions on it? Do they talk about it more than others? That’s a strong indicator that the item is important to them.

You can also uncover priorities by offering two options. “I once participated in a negotiation with a company sponsoring the Ice Hockey World Championship, and we were discussing the supply of promotional items,” says Michal Musil. “The client needed to know what mattered more—earlier delivery, quality, or price. So we created two proposals: one more expensive, with higher quality products delivered in a month, and the other cheaper, with lower quality items delivered two weeks earlier. The company chose the first option—what mattered most wasn’t price, but timely delivery and premium products.”

Creating Value Isn’t Always the Goal in Every Negotiation

There are situations where one party wants to maximize a particular item, while you want to minimize it. In such cases, reaching an agreement or creating value may not be possible. That’s when it’s time to switch to competitive negotiation techniques—we’ll cover those next time.

In the meantime, check out our Negotiation Academy. We’ve also created a free video course, SALESMAJSTR, where instructor Michal Musil guides you through the many nuances of negotiation.