Have you ever come out of a negotiation feeling pummeled and wounded, as if you never had a chance? I’ve seen salespeople who are intelligent but unprepared being destroyed in meetings far too often. I will admit that I had a similar setback early in my career. I counted my early mistakes as part of my path of learning sales negotiating via trial and error.
Does a difficult route to negotiating success have to exist?
I firmly think that you should practice before a game, not during it. When negotiating with a competitive negotiator who is as harsh as nails and whose impending performance assessment depends on making sure you receive a bad bargain, charm and charisma only go so far.
To be ready for your next business discussion, follow these steps.
1. Know What you Want
We must define an ambitious but practical goal for this first question. There are three traps to be aware of while establishing a target.
First, refrain from being a mediocre negotiator who sets a low bar. If you do, you can experience what is known as the “winner’s curse,” which is the disappointment we experience when the other side accepts our initial offer in negotiation right away. The other party’s eagerness to accept your initial offer shows that you set your expectations too low and did not do sufficient pre-negotiation planning.
However, you also don’t want to be an overly ambitious negotiator. You won’t be able to reach an agreement if you set your goals too high and refuse to make major sacrifices.
When you have done so little preparation for a negotiation that you are unsure of what you want, a third issue occurs. Negotiators often interpret the opposing party’s sincere suggestions in this situation with skepticism or disappointment.
2. Know The Alternative You Have to Reach a Deal
Determine your “Best Alternative To A Negotiated Agreement”, or BATNA, in Getting to Yes.
Knowing your BATNA will enable you to decide when to leave a situation and look for your best option. According to Harvard Business School professors Deepak Malhotra and Max H. Bazerman in their book Negotiation Genius, BATNA evaluation incorporates the following three processes:
List every conceivable course of action you may take if you are unable to agree with the present party.
Calculate the value attached to each option.
Choose your BATNA, which is the finest alternative.
3. Determine the Value of Your Reservation
You may determine your reservation value, or reservation price, which is your walk-away point in the future negotiation if your negotiation preparation has assisted you in identifying your BATNA. It might be a specific figure in a pricing discussion. Your reserve value may be represented as a bundle, such as the lowest income, perks, and duties you would accept to take a certain job, in an integrative negotiation when numerous topics are at play.
You can prevent two blunders by being aware of your reserve value:
Accepting a bargain that is worse than your BATNA, and
Rejecting an offer that is better than your BATNA.
4. Consider the Needs of Your Counterpart
Considering your needs and desires alone is insufficient when preparing for a negotiation. You also need to determine how much the other side could be prepared to offer to increase the likelihood of an agreement that benefits both parties. You must evaluate your BATNA to accomplish this.
What will they do if our discussion reaches a deadlock? You will then start to think about the reservation value of the opposite side. For instance, a job seeker may conclude that the recruiting company has other competent individuals lined up and ready to accept the position for a relatively low wage. If this is the case, the job candidate may realize that he won’t be able to exert much pressure on the hiring manager during a pay negotiation.
In contrast, a candidate for a job can be aware that she is one of the few qualified applicants for the post, in which case she might be able to negotiate hard.
It’s important to approach negotiation preparation with a clear-eyed assessment of the situation. The better your negotiation outcomes are going to be, the more reasonable and systematic your negotiation preparation process is.
5. Determine whether you are engaged in negotiation.
When you are in a communication or problem-solving setting with people where you stand to gain, it is a negotiation situation. Negotiate only if there is a benefit to you; otherwise, you will lose. Thousands of years ago, Sun Tzu, the author of “The Art of War,” advised his readers to “engage only when it is in the state’s interests; quit when it is to the state’s harm. If there are no benefits to be gained, do not move.
6. Specify Your Goals.
In every negotiation, your main goal should be to realize the goals that you and your constituency have established. Other objectives include negotiating a fair bargain and strengthening your connection with the other party. However, achieving your goals is crucial. Always keep this goal in mind, and keep going until you achieve it.
7. Mentally prepare yourself.
The main factor between successful and unsuccessful negotiators is their approach to the talks. One of your preparation strategies should include being in the correct state of mind before you start.
Don’t feel you owe them anything; instead, strive to be strong, businesslike, vigilant, and unrelenting. Avoid positioning yourself above or below them.
Never expose your emotions; instead, remain calm and unhurried.
8. Create a Team
Talking alone should be avoided. The risks of feeling alone are well known to anybody who has ever experienced gang violence. The same is true while getting ready to bargain. Therefore, it’s essential to enlist one or more colleagues. Make sure everyone on your negotiating team understands your plan and their responsibilities. You run the danger of contradicting one another at the negotiation table and losing the upper hand if you don’t specify these elements explicitly.
How much time should you devote to preparation now that you have a defined procedure?
My general rule of thumb is to devote at least three times as much time to the negotiation as you anticipate. Therefore, two hours of preparation are required for a face-to-face encounter.
This does not imply that you must prepare for six hours straight while alone in a room. Instead, pace yourself, your group, and the meeting itself in the days and weeks before.
Finally, consider your negotiating preparation method when you need strength and assurance.
There is no assurance that thorough planning will result in fruitful discussions. But the likelihood is that inadequate planning will fail. Avoid taking that chance. You won’t regret pulling out all the stops to gain a head start.