5 steps to a good negotiation
When the negotiation begins, it’s essential that you Set the scene, which sets the tone for the rest of the negotiation. Along the way, you should be aware of your conditions and variables. You should employ a Quid pro quo tactic. A Proposal for agreement content or direction can be crucial to successful negotiation.
Last but not least, it’s essential to ensure that both parties have the same understanding of what has been agreed upon, so agree on what has been agreed.
Every successful negotiation starts with detailed Planning. (Read how in the previous article: Plan a good negotiation).
2. Set the scene
In the preparation process, you clarified what your goal for the negotiation is. The first few minutes of a negotiation are crucial as they set the agenda and the mood for the rest of the negotiation. When you meet your counterpart, show with your body language and your choice of words that you are ready and tell them your goal for the negotiation.
When you set the scene for the negotiation, you choose what actions to take. Are you formal or informal, positive or neutral, directive or dominating? Consider how you act and “take the room” when the negotiation starts.
Then, you align the agenda and the points to be negotiated so that you speak from the same premises.
Should the counterpart have a request for a new item on the agenda that you cannot immediately address, inquire about it and possibly handle it at another meeting? There may be tactical reasons why the counterpart wants this particular item, and it could be costly for you to address it without preparation.
3. Quid pro quo
Remember that every time you give something to the other party, you should get something in return. Many people make the mistake of preparing a lot – and setting goals and figuring out their “walk away” point. But they forget to use the variables they have also prepared when the negotiation starts.
But if you use your variables correctly, you can optimize any deal, even without costing the other party the same as what you gain from it. The negotiation only starts when the variables come into play, and it takes practice to keep a cool head, look at your notes and incorporate the variables you can take advantage of in the negotiation.
When you give something to the other party, always remember to set your conditions first. Stating the condition first becomes more of a statement than an offer, as some may perceive your conditions. For example: “If you pay within eight days instead of the current month + 30 days, I can give it to you at xx price”, or “If we get the entire delivery and we get to decide when the project starts, you can have it at xx price”.
By using your variables and setting conditions first, you can meet the counterpart’s demands on your terms and make a good deal for both parties.
Studies show that up to 90% of negotiations are spent arguing, while the last 10% is where variables are used constructively and agreement is reached.
You should argue for your price and demands, but it’s rare for the counterpart to say OK to your demands without providing counterarguments. Therefore, presenting proposals to advance a negotiation process is a good idea. A proposal helps promote negotiation, regardless of whether you agree with it.
If you are making the proposal, align on what you can agree on and what needs to be adjusted. A proposal can often be accepted by changing the variables without significantly changing the value. For example, it could be startup time, delivery time, or payment terms.
If the other party makes the proposal and you cannot accept it, don’t outright reject it 100%. Instead, use elements from the proposal to make a new proposal or build on the counterpart’s proposal. If possible, use the same numbers but in a different context. We all like to hear what we have presented ourselves, so we are more receptive to dialogue when barriers are down.
Be specific when giving a proposal. Odd numbers are often good. We usually think in 5 – 10 – 15, etc.; a skewed number between them works better and is more credible. Once you have proposed, explain the content and ask for a response. Proposals steer the direction, the process, the dialogue, and the balance.
5. Agree on what has been agreed
The last step, essential to conclude a negotiation, may seem bland. Still, many agreements fail because the parties do not align 100% on the next step or ensure that there is agreement on the understanding of the content of the negotiation.
If you are unsure about the content after the meeting, always contact the other party to align it. Always follow up immediately after the meeting, as understanding tends to change over time.
Now, you are equipped to prepare and conduct a good negotiation, resulting in a win-win outcome. Now, it’s the practical training that’s needed to succeed.