No matter the complexity or size of the deal, there are certain Do’s and Don’ts that you should follow prior, during and following the negotiation. Your goal should be to reach a compromise that is fair and equitable to both parties. Remember–if you close the deal both parties will be partners. Negotiate a win-win outcome.
- Prepare before beginning the negotiation. A lack of preparation can cost you money and credibility.
- Determine your interests and those of the other party. Instead of thinking of the person you will negotiate with as an adversary think of them as your partner in this deal. Be sure to separate their positions or demands from their interests.
- Analyze the options that each of you has available. These should be written down along with their “pros and cons” and then reviewed carefully.
- Determine both parties walk away position and BATNA (Best Alternative to a Negotiated Agreement).
- Think through what information the negotiator has about you and your company. Example: length of time conducting business together, successes and failures, prior negotiations etc.
- Define the trades or concessions you are willing to offer. List them in order of preference.
- Remember to stay calm, cool and collected. Keep the emotional advantage. Focus on interests and issues not personalities or words used.
- Document everything in writing immediately following the meeting and send it to the other party. Don’t allow misperceptions or misinterpretations.
- Build rapport with the other party. It will help you uncover their needs, show genuine interest in crafting a win-win strategy and lead both of you to being more creative in developing options that will meet both your needs.
- Shut-up and listen. Then ask good, insightful questions. Good negotiators are detectives. They ask good questions and then they listen.
- Do your homework. Gather as much information as you can prior to the negotiation. How are they measured? What pressure are they under? Who do they report to? What options do they have etc.? The more information you have the stronger a negotiator you will become.
- Practice and then practice some more. If you are negotiating with a Procurement or Purchasing officer, they negotiate several times per day. Without practice, training and preparation you are at a distinct disadvantage.
- Be prepared to walk-away. Not all deals are win-win or good deals for you and your company. Be prepared to walk-away from bad business.
- Think creatively. Look for ways to expand the deal not to divide it up equally. We call this “expanding the pie” rather than “dividing the pie.”
- Don’t take anything said personally. No matter what the other party says or how they act, stay calm. Be professional and don’t let your emotions cloud your judgment.
- Don’t give something away without getting something in return. Concessions have to be bi-lateral. It’s easy to get reciprocation if you simply say “I will do this if you will do that”!
- Don’t make unreasonable demands; you will lose credibility.
- Don’t rush the negotiation. Oftentimes complex deals take time to negotiate.
- Don’t interrupt the other party. Be a good listener. Listen to understand and gather information. Don’t miss anything because you are preparing to respond. You will have time to respond when they are finished talking.
- Don’t use the word “between or range’. If you say our price will be between X and Y buyers will only hear the lowest number and they will become fixated on it. Don’t put yourself in an untenable position.
- Don’t negotiate with someone that cannot sign off on the deal.
- Don’t ignore the buyer’s body language. Think like a stop light: green, yellow or red.
- Don’t focus on positions or demands. Instead focus on interests.
Negotiations can be difficult or easy. The way in which you approach the negotiation matters. Prepare, train, practice and win your next one.