Plan a successful negotiation
A successful negotiation is about creating a win-win agreement that provides the best foundation for future collaboration.
Achieving a satisfactory outcome requires being conscious of your goals, having a strategy, and knowing your variables and conditions. Thorough preparation is essential for a successful negotiation.
Negotiation is about giving something to the other party in exchange for something in return. What often goes wrong in negotiations is being unclear about what you’re willing to give to reach an agreement. It requires preparation. The more complex and significant the agreements are, the more critical the preparation is.
Negotiation is often a psychological game between the parties, and sometimes, it may seem like one party doesn’t want to negotiate. It’s your task to determine what motivates the other party to negotiate.
1. Set goals and topics
For a successful negotiation, you must be well-prepared, often more than you anticipate. Start by defining the topic and goal of the negotiation, as well as your “walk away” point.
2. Prepare your variables
Next, clarify the variables you can work with, both as your desires and what you can offer the other party to reach an agreement. You either receive a variable from the other party or something you can offer them. It can be anything from varying payment terms to the colour and quality of the product.
A good deal, where both parties have their demands met, requires the variables to be diligently used so that what you give out is more valuable to the other party than it costs you and vice versa.
3. Handle the unexpected
If unexpected demands arise during the negotiation, don’t negotiate without having all the details in place. Ask questions to understand if it’s a demand or just a wish from the other party.
It’s better to plan a new negotiation meeting than to negotiate something unprepared, as it can be costly.
4. Know profiles and roles
If you know your counterpart, assess what type of person you’ll be dealing with. If multiple people are involved in the negotiation, tailor your preparation and level of detail to match the personalities you’ll encounter.
If several people are on your side of the table, align the roles each of you will play in the negotiation. Who does what, and how do you address any doubts that may arise? We recommend one person take the lead while others primarily ask supplementary questions.
5. Choose your tactics
Evaluate your tactics during the negotiation and when you’ll share and release your information.
You can often release more information than many think. You usually achieve the best result by releasing information at the beginning of the negotiation. Explain your goal with the negotiation; if the other party doesn’t know your purpose, they can’t fulfil it, only guess it.
Many don’t disclose their negotiation goal, assuming the other party knows it. Perhaps they fear revealing too much and making themselves vulnerable to the other party. This can have the effect that some variables that could improve our agreement but are not our actual demands become the negotiation focus instead of our main demands. When we get to the primary demand, the negotiation becomes tougher because the other party has already met demands that were merely wishes or variables.
6. Set your conditions
You can, in principle, release most information; just remember to set conditions before releasing them. The conditions should have enough value to justify the price you give or receive. Remember to use your variables here and start by setting your demands from your side of the table according to the optimal conditions.
7. Plan the opening
Also, prepare how you will open the negotiation. Many underestimate the first few minutes of a negotiation, but they help set the agenda for the rest of the meeting. Therefore, consider what you will say at the beginning of the negotiation and how you will say it.
Regardless of your planned tactic, navigating new information you hadn’t anticipated is essential. Sometimes, we’re so focused on achieving our goals that we don’t listen to what the other party is saying, so be mindful to listen and change your tactic if necessary actively.
8. Take breaks
It’s often a good idea to take a break to assess whether you’re still on the right track or if adjustments need to be made to the original tactic. A break can also be helpful even when you’re alone. Thinking creatively about the negotiation is easier when you can step back a bit.
Many perceive a break as a sign of weakness, but it’s a potent tool for achieving a constructive negotiation.
Now that you have the essential elements to start a successful negotiation, it’s time to put it into practice.