All negotiations should start long before you sit down together. Preparation is critical to creating a successful deal, and by carrying out the necessary research and planning, you are protecting yourself against failure and poor performance.
Unfortunately, negotiation preparation is a step many negotiators fail to take, and as a result, they walk away with less value and benefits than they could have. In fact, our study found that 41% of sales negotiators indicated that they occasionally have no time for preparation. What happens then is an opposing negotiator will take advantage of any perceived weaknesses and exploit them for additional gains.
Thorough negotiation preparations can strengthen your position by allowing you to set clear limits and goals, understand the other party's motivation, needs, and desires, and create realistic scenarios that benefit everyone.
A comprehensive negotiation preparation checklist, like ours, boosts confidence, helps you anticipate conflict, and prepares for any challenges you might face at the negotiation table.
5 Steps for Negotiation Preparation
1. Set Goals
Your first step should be to create a list of short-term and long-term goals for your negotiation. Consider what you want to achieve, and then think SMART:
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Be specific about what your goal is.
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Make it measurable so that you can monitor your progress easily.
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Make it attainable and realistic.
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Ensure it's relevant to the negotiation and the other party.
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Agree on a timescale for each goal.
Entering a negotiation with clear goals helps you to remain focused, objective, and clear about what you want. Your goals should include practical considerations like your timeline, budget, costs, BATNA and reservation point. Doing this prevents misunderstandings, increases productivity, and motivates you to achieve a successful deal.
2. Evaluate Strengths and Weaknesses
Evaluating your strengths and weaknesses applies to you and your opponent. However, to start, you need to understand the skills, values, and assets you, your negotiating team and your business bring to the table. Consider:
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What vulnerabilities can the other party exploit?
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How can I mitigate these?
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What do the other party need from you?
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What do we offer?
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What have I learned from previous negotiations, and how do they apply to this upcoming negotiation?
If you have these questions answered before your meeting, you'll be able to prepare measures and strategies to protect your goals and overcome potential obstacles. Additionally, it's empowering to know what you bring to the table and use it to extract leverage and more value from the deal.
3. Do Your Research
Knowledge is power, and having an up-to-date, comprehensive understanding of the other party puts you in a powerful position. It allows you to gather supporting evidence for your argument, helps you to build rapport and will enable you to develop ways to overcome resistance.
According to LinkedIn, 82% [link to Negotiation Stats post when ready] top performers (those who hit 150%+ of their sales target) say they "always" perform research before reaching out to prospects. Consider finding out about:
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• Past interactions
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• Their negotiation style
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• Any cultural differences
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• Their preferred medium for negotiations (online or in person)
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• Any political or ethical leanings you need to keep in mind
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• Their hierarchy and key players
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• What do they bring to the table, and what are their interests?
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• Who else is competing for a deal?
Ensure you use multiple modes of research by asking colleagues who've negotiated with them, using an open-source search of all public information, their online presence, and any competitive intelligence you have gathered. Much like above, you need to know their strengths and weaknesses and use this to inform how you approach your goals, reservation point, and BATNA.
4. Identify Your Reservation Point
A reservation point is about setting financial limits; it's the highest price you'll pay and the lowest price the other party will sell.
For example, when purchasing a vendor's services, your reservation point might be £3,000, whilst they might be willing to go as low as £2,500. Between these two points is where the negotiation occurs, also known as the ZOPA or Zone of Potential Agreement.
Ultimately, they control whether you make a deal or have to pursue your BATNA, and knowing yours ahead of the negotiation gives you the power to create a high-value agreement that works for everyone and tells you when to say no.
5. Analyse Your BATNA
So, you've reached an impasse. What do you do next?
You'll already have your answer if you've decided on a BATNA, also known as the Best Alternative to a Negotiated Agreement. Its purpose is to negate a breakdown in negotiations by having your escape plan already planned out. It's a powerful concept that gives you leverage over your opponent and a strategy to secure the most optimal option possible.
The key to analysing your BATNA is knowing your choices, expanding, and evaluating your options and improving your best alternative so you are never left unprepared.
Know What to Avoid
Now that you know what to prepare for a negotiation, it's worth noting that there are things you should actively prepare to avoid as well. As a negotiator, it's best to refrain from:
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• Going in unprepared: If there's one takeaway from this article, don't go in unprepared! Preparation is core to effective negotiations. Not understanding your objectives, the interests of the other party, and the context of the negotiation can lead to suboptimal outcomes or even failure to achieve any outcome in the first place.
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• Making the first concession too early or without reciprocity: Making concessions too early in the negotiation can signal weakness or desperation. Always aim to trade concessions ("If you... then I will...") to maintain balance and ensure you receive value in return.
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• Getting too emotional or taking things personally: Negotiations can become heated and challenging. Maintain professionalism and focus on the issue at hand rather than personal feelings.
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• Focusing solely on price: Negotiation is not just about the price but the value. Look for creative ways to add value that may not cost you much but are valuable to the other party. This can include terms of payment, delivery schedules, or additional services.
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• Dominating the conversation and not allowing the other party to share their views and needs: Effective negotiators are also effective listeners. Understanding the other party's needs, constraints, and priorities can provide valuable insights to propose mutually beneficial solutions. Engage in active listening, asking clarifying questions and summarising their points to ensure understanding.
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• Being too rigid: Flexibility is key in negotiations. Being too rigid on your positions can lead to a deadlock. Focus on your interests, but be open to different ways to achieve them. This might mean repackaging proposals or exploring alternatives that satisfy both parties' core interests.
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• Leaving terms vague and open to interpretation: Ambiguity can lead to misunderstandings and disputes post-agreement. Ensure all terms are clearly defined and understood by both parties. Agreeing on what is agreed upon and documenting it prevents "deal creep" and ensures a smooth implementation.
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• Dismissing the other party's concerns or perspectives without genuine consideration: Not acknowledging or considering the perspective and constraints of the other party can hinder finding a common ground. Demonstrate understanding and empathy towards their situation to build rapport and facilitate a collaborative negotiation atmosphere.
As the adage goes, fail to prepare, prepare to fail.
Negotiation requires not only a grasp of persuasive communication and tactical bargaining but also – and crucially – the foresight and diligence in preparation. It is through comprehensive and detailed preparation that negotiators can anticipate challenges, leverage opportunities, and navigate the complexities of negotiation dynamics with clarity and confidence.
After all, there are perhaps no secrets to successful negotiations, except for thorough preparation.
Discover everything you need to be a successful negotiator and master the art of negotiation with Scotwork's Advancing Negotiation Skills (A.N.S.) Programme today.
