Raise your hand if you can handle one more thing on your plate right now. No one can. It seems like everyone spends their time putting out one fire after another. So along comes some so-called expert to tell you that you need to prepare for your upcoming negotiations. Yeah, right.
More and more, negotiations happen in pieces and on the fly, meaning that you quickly shoot off an e-mail or leave a voicemail in response to someone else’s e-mail or voicemail. This disjointed approach to negotiating will not change for the better any time soon. No amount of evangelizing by experts will return you to the days when you had time to have a conversation to really hash out some issue.
But studies show that negotiation preparation improves outcomes. In fact, it is the single-most-important thing you can do to influence the negotiation in your favor. When you find a few minutes to prepare, what would be the most effective use of that time?
Here are five key questions to consider before you negotiate. Answering them will give you the advantage when those on-the-fly negotiations come up.
- What are your goals for this relationship, whether it is with a customer, vendor or service provider? How do these goals fit into the larger picture at your company? Does it make sense to pursue these goals with this customer or vendor?
- What are the motivating factors for you and the other person to work together? List the factors that motivate you, and then list the factors that motivate them. The key to gaining strength at the bargaining table is to identify what you and the other person really want and need from the relationship. Money is obvious, so try to peel the onion and go a little deeper to identify additional needs you and the other person might have.
- What must you absolutely have in order to work with the other person? Rank these in order of importance. Going in to the conversation, identify the “must haves,” versus the “nice to haves” in the relationship. If something is a deal breaker, know this early on, and when the issue is discussed, address it openly and with certainty.
- What issues can you give a little on? Are there parts of your service or product that can be eliminated to reduce price? Can you work on a shortened deadline without risking quality? Identify the items that you’re willing to trade off in exchange for something from the other person. Do not give something up without getting something of value in return. Studies show that if you know what you are willing to give and what you want in return, you will have a much more profitable agreement. This is because most people give things up and forget to ask for something in return. One way to structure a tradeoff is to link outcomes together. For example, you might say, “If I give you this, then will you give me that?”
- Who are you talking to? Is the person you are negotiating with the decision-maker? Who else has a vested interest in the result of the negotiation? Should anyone else be consulted? When negotiating with a non-decision-maker you need a different objective. Your objective becomes one of providing information, coaching the other person to speak well of you on your behalf and engendering a sense of confidence that your solution will meet the decision-maker’s needs.
There are two main advantages to sketching out your responses to these questions. First, the process itself solidifies your thinking about what you believe would be a good deal for you and your company. Second, and possibly more important, the process will give you an immediate picture of what you do not know. What you do not know now can kill you at the bargaining table. Not only might you leave money on the table, you might miss an opportunity to ask for a valuable tradeoff from the other person.
As you can see from these simple and straightforward questions, preparing for a negotiation doesn’t have to be onerous and time consuming.