When I ask workshop participants to assess their negotiation process, they often realise that a) they may not have one and b) they’ve been neglecting the first essential step: preparation.
Author of How to pay less for more and my co-creator of Zoomly’s ‘How to negotiate’ workshop Marc Lockley says that preparation accounts for up to 70% of the negotiation. Why? Because preparation affects so much of the whole process. Preparation will affect how you:
- Approach the negotiation
- Identify what the other party is likely to want
- Elicit the other party’s offer
- Make your counter-offer or proposal
- Position your offer against a competitor’s
- Decide to concede a point – or walk away
- Communicate with the other party
- Bargain and make trades
- Stand your ground or make certain concessions
- Feel about yourself (your colleagues, and what you’re offering) before, during and after the negotiation.
Yet all too often, it’s a case of turn up, have a discussion, make some compromises, agree and hope for the best next time.
Working through these questions will help you identify the essentials you need to have ready on a crib sheet, so that you and your colleagues have more productive negotiations:
1. What’s the current state of the market?
Whether you’re the seller or buyer, it’s essential to have a grip on reality about the current state of the market you’re dealing with. If you’re B2B negotiating you should have a pretty good idea already, but run a check all the same.
2. What do you know about the other party? What do you need to find out?
The obvious place to start is online. But don’t stop there: ask around your network and find out who’s done business with the organisation before. If it’s a current client, track back through the history of negotiations they’ve done. Tip: ask the CFO or FD.
3. What does the competition have to offer?
If you’re the supplier, expect your potential client to have done their homework on your competitors and what they offer – so you need to have done the same. What do you offer that is different and/or better than the competition?
4. What do you want from the negotiation?
It’s vital that you and – very importantly – your key stakeholders all agree on what the goal is for the negotiation. A B2B negotiation saw the incumbent walk away because they didn’t believe they’d make any money from the deal offered; however their rival happily accepted the deal because they believed the it offered long-term potential. These different reactions suggest the rivals had different goals from the outset. Have internal discussions, ask for input and get backing for the agreed goal. At the same time, discuss and agree what your ‘walk away’ point is, when what’s offered just isn’t good enough.
5. What will the other party want?
Your answer to this could range from “Haven’t a clue!” to “Got a pretty good idea, but would like to check things out”, depending on how well you know the potential customer and how many competitors are involved. You may make an educated guess but need more input and information. It’s worth brainstorming different options from the other party’s point of view, then asking how you would respond to each one as part of your preparation. You probably won’t know everything about the other party’s wants, which leads to the next point…
6. What questions will we ask?
Carefully craft the questions you’ll ask to fill the gaps in your information. Build a broad repertoire of questions to ensure you get all the important information and explore what’s going on for the other party personally – big picture and detail.
You might also find this blog post useful: 20 questions to help you negotiate (and one to avoid)
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