Preparation is key to every effective negotiation strategy.
Brian Mandell, Senior Lecturer in Public Policy at the Harvard Kennedy School, says that a good negotiator prepares by understanding fully what he/she wishes to accomplish. A great negotiator prepares by understanding what the other side wishes to accomplish.
At the heart of your preparation should be a strategy that would allow both sides to win. Let’s take a close look at the questions you need to ask yourself (and answer) in order to prepare effectively for a “win-win” negotiation.
Preparation: What Must I Achieve to Gain a Win for My Organization?
- What are the high priority issues that require resolution from my company’s perspective?
This is a good time to call your sales manager and make sure you’ve got all the issues covered. Does he/she have any second thoughts about priorities and options?
- What are my “walk away” positions on high priority issues?
Great negotiators always know their limitations. Do you know your limits, your alternatives and your flexibilities? These are sometimes referred to as the “reserve point or when to fold.”
- What lower priority issues might serve as “trade offs” or concessions?
Wouldn’t it be great if your low priority issues were high priority to your customer and vice versa? It would certainly lower the chances of reaching an impasse. Great negotiators plan their concessions and “trade-offs” in ways that allow both parties to win (to the degree possible) on their highest priority issues.
- What specific “trades” should I consider that might be attractive to my customer?
Build your packages of options. Ask your customer which options best serve their interests. Engage and discover.
- What issue is not on the table that would enhance my company’s flexibility and broaden our partnership with the customer?
Ask yourself how your organization could help your customer’s organization succeed. A negotiation session is awkward to the unprepared…and a wonderful opportunity to explore new dimensions to a partnership for the fully prepared.
Preparation: What Must My Customer Achieve to Gain a Win for His/Her Organization?
- What are the high priority issues that require resolution from my customer’s perspective?
It’s always helpful to make a list of all the issues that might benefit your customer. Divide them into three (3) categories: Financial, Operational/Administrative and Terms/Conditions. Then circle the one or two high priority issues in each category. You may not think of everything, but you will have taken a major step in your preparation. This helps you avoid unexpected surprises.
- What initial position is my customer likely to take on these high priority issues?
If they have read your proposal thoroughly, what challenges or push back should you expect? How are they likely to counter? Did you set proper expectations early?
- What questions can I use to draw out or confirm my customer’s underlying interests?
If you’ve anticipated two or three responses to your proposal, look for the biggest gap and ask your customer to help you understand their thoughts and reasoning on the matter. What are they trying to accomplish, fix or avoid with their position?
- When negotiations are completed, what will be my customer’s vision of an acceptable “win”?
You are not trying to give them an ideal win—just an acceptable one. It may boil down to a single issue or two.
- What single issue is most likely to stall or derail our negotiations?
Another way of putting it is: “What’s the deal breaker in the mix?” Think about how you can take the deal breaker off the table.
At the heart of every negotiation lies two customer issues: trust and risk. Every customer must ask themselves to what extent do they trust the sales representative, his/her team and the company to deliver the value promised. Second, to what extent does the proposed change jeopardize existing performance and elevate risks that may delay or undermine the desired solution?
Your preparation, your focus on customer needs and your willingness to explore his/her interests speak volumes about trustworthiness. Develop a comfort level with discussing risk. It is most likely to kill a deal when it’s not addressed. Explore areas of concern and discomfort. Here’s our tip, don’t leave a meeting or negotiation session without asking, “Is there anything we’ve discussed or agreed upon that causes you concern or discomfort?” Risk (or the perception of risk) can make the status quo look awfully good.
For more information on Handling Risk, download our EBook: Lower the Hospitals Buyer Risk, Not Your Price!
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