How to Prepare for Any Negotiation Session
By John Patrick Dolan
If you think successful salespeople “wing it” when it comes to negotiation, think
again. In truth, they prepare for every negotiation with the same rigor as a student
preparing for an upcoming exam. Smart salespeople realize effective negotiation depends
on preparation. They take time to think through their own position and that of their
counterpart so they can ultimately handle anything that may arise during the bargaining
process.
To become an effective negotiator and a more successful salesperson, you must
understand the power of preparation. The first step is to solidify your position. Start by
answering the following question: “Where do I stand?” In other words, what is your
position in the negotiation process?
Knowing your position means more than saying to yourself, “I want this,” or, “I
want that.” In most cases, your position will encompass more components than just the
issue driving you to the bargaining table. Before entering the crossfire, use the following
three inventory items to establish your position:
1. Know What You Want
Rather than enter a negotiating situation with a vague idea of your position, take
time beforehand to formulate a detailed picture in your mind of what you want. Start by
making a list of your demands. Say, for example, you’re applying for a new job. In this
case, your list may include a desired salary, benefits, and vacation time.
Be very specific in your list of items, because specific demands carry more
negotiating power. When you know exactly what you want, you will feel more confident
and your counterpart will respond more favorably to your requests. Sometimes just acting
like you expect a positive response will sway the other party in your favor. And while
you can’t always rely on your confidence alone, the force with which you present your
demands will at least give you an edge.
2. Know Where You Can Afford to Compromise
So what happens if you don’t get exactly what you want out of the deal? Well,
that’s just reality. No one ever gets everything they ask for in life, and negotiation is no
different. The process requires give and take from both parties, so you should always be
prepared for compromise.
To avoid giving up too much, or giving in on the wrong issues, know in advance
what concessions and compromises you are willing to make. Consider your list of
demands and decide which items you absolutely must have, what items you would like to
have, and what items would be great to have. Plan ahead how far you can reduce your
demands so you aren’t forced into making snap decisions, or a decision you may regret.
3. Plan Alternatives to Your Ultimate Goal
Think of alternatives as your safety net. If you can’t negotiate a deal that both
parties agree with, you should always be prepared to walk away. For every plan A you
should have a plan B, and remember never to want anything too badly. Desperation will cause you to make poor decisions, and in reality situations aren’t usually as desperate as they seem.
Many times, when negotiators aren’t prepared with an alternative perspective,
they feel like they have no choice but to take what’s offered. When you take time to
consider your alternatives prior to the negotiation process, you won’t be afraid to walk
away when things don’t go as planned.
What is Your Counterpart’s Position?
Once you’ve determined your stance, the second part of negotiation preparation
requires you to look at the situation from the other side. You must survey your
counterpart’s position and uncover their strengths and weaknesses. Ask yourself the
following five questions to discover what’s on the other side’s agenda:
1. What Do They Want?
Discovering what the other side wants is crucial for developing mutually
beneficial agreements. Obviously they want something from you, or you wouldn't be
beneficial agreements. Obviously they want something from you, or you wouldn't be
negotiating in the first place. Do they want the product you’re selling? Or do they want a
cheaper alternative to a service they already get from somewhere else? In many cases,
their wants will be apparent. But if you don’t know what they want, then don’t be afraid
to come out and ask them.
2. What is Important to the Other Side?
Say, for example, you’re a real estate agent negotiating the price of a listing with
an interested couple. Naturally, they want the house you’re selling, but what’s really
important to them? Is it the location? Are they comfortable with the mortgage? Once you
discover your counterpart’s needs, you can use those points to negotiate for things that
are important to you.
3. Why Are They Willing to Negotiate?
Willingness to participate in negotiation automatically signals some degree of
flexibility or need. Roger Dawson described a historical example of this concept in his
book, You Can Get Anything You Want. During the Vietnam War, Lyndon Johnson’s
administration was under tremendous pressure from the constituency to reach an
agreement before the general elections, and the Vietnamese used this to their advantage.
They pushed the United States into a corner and forced them to give up almost everything
to end the fighting. In this case, the impending election added a time constraint on the
United States to the point of desperation. When you know why your opponent is willing
to negotiate, you can use it to your advantage.
4. What Does the Other Side Bring to the Situation?
Before entering into negotiations, you must find out what they have to offer you.
Do they have what you want? Can they afford your demands? If they don’t have what
you want, the negotiation process is pointless. 5. What Resources Do They Have?
Just like you have other options, your counterparts are likely to have alternatives
as well. Find out how badly they need this deal. Are they desperate? Or do they possess a
catalog of other options? A customer, for example, usually has plenty of choices when
negotiating the sale of a product or service. They can just shop somewhere else if you
don’t provide what they want on their terms. But sometimes, you’ll find that you are the
only source for the item your counterparts want.
Preparation for the Future
You wouldn’t take a test without studying, so why should the negotiation process
be any different? Taking a personal inventory of your position before beginning the
negotiation process will give you confidence and prevent you from making poor
decisions. Additionally, some investigation of your counterpart’s needs and wants will
give you an added edge when the process starts.
Knowledge and preparation are the keys to effective negotiation, and as a
salesperson, you can only benefit from the extra effort. When you take time to understand
your position and your counterpart’s position at the bargaining table, you’ll be ready for
anything and secure more sales as a result.
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