All negotiations should start long before you sit down together. Preparation is critical to creating a successful deal, and by carrying out the necessary research and planning, you are protecting yourself against failure and poor performance. Unfortunately, it’s a step many negotiators fail to take, and as a result, they walk away with less value and benefits than they could have. An opposing negotiator will take advantage of any perceived weaknesses and exploit them for additional gains. Thorough preparations can strengthen your position by allowing you to set clear limits and goals, understand their needs and desires and create realistic scenarios that benefit everyone. A comprehensive checklist, like ours, boosts confidence, helps you anticipate conflict, and prepares for any challenges you might face.
Your first step should be to create a list of short-term and long-term goals for your negotiation. Consider what you want to achieve, and then think SMART:
- Be specific about what your goal is.
- Make it measurable so that you can monitor your progress easily.
- Make it attainable and realistic.
- Ensure it’s relevant to the negotiation and the other party.
- Agree on a timescale for each goal.
Entering a negotiation with clear goals helps you to remain focused, objective, and clear about what you want. Your goals should include practical considerations like your timeline, budget, costs, BATNA and reservation point. Doing this prevents misunderstandings, increases productivity, and motivates you to achieve a successful deal.
Evaluate Strengths and Weaknesses
Evaluating your strengths and weaknesses applies to you and your opponent. However, to start, you need to understand the skills, values, and assets you, your team and your business bring to the table. Consider:
- What vulnerabilities can the other party exploit?
- How can I mitigate these?
- What do the other party need from you?
- What do we offer?
- What have I learned from previous negotiations, and how do they apply to this one?
If you have these questions answered before your meeting, you’ll be able to prepare measures and strategies to protect your goals and overcome potential obstacles. Additionally, it’s empowering to know what you bring to the table and use it to extract leverage and more value from the deal.
Do Your Research
Knowledge is power, and having an up-to-date, comprehensive understanding of the other party puts you in a powerful position. It allows you to gather supporting evidence for your argument, helps you to build rapport and will enable you to develop ways to overcome resistance. Consider finding out about:
- Past interactions
- Their negotiating style
- Any cultural differences
- Their preferred medium for negotiations (electronically or in person)
- Any political or ethical leanings you need to keep in mind
- Their hierarchy and key players
- What do they bring to the table, and what are their interests?
- Who else is competing for a deal?
Ensure you use multiple modes of research by asking colleagues who’ve negotiated with them, using an open-source search of all public information, their online presence, and any competitive intelligence you have gathered. Much like above, you need to know their strengths and weaknesses and use this to inform how you approach your goals, reservation point and BATNA.
What is Your Reservation Point?
A reservation point is about setting financial limits; it’s the highest price you’ll pay and the lowest price the other party will sell. For example, when purchasing a vendor’s services, your reservation point might be £3,000, whilst they might be willing to go as low as £2,500. Between these two points is where the negotiation occurs, also known as the ZOPA or Zone of Potential Agreement. Ultimately, they control whether you make a deal or have to pursue your BATNA, and knowing yours ahead of the negotiation gives you the power to create a high-value agreement that works for everyone and tells you when to say no.
Analyse Your BATNA
So, you’ve reached an impasse. What do you do next? You'll already have your answer if you’ve decided on a BATNA, also known as the Best Alternative to a Negotiated Agreement. Its purpose is to negate a breakdown in negotiations by having your escape plan already planned out. It’s a powerful concept that gives you leverage over your opponent and a strategy to secure the most optimal option possible. The key to analysing your BATNA is knowing your choices, expanding, and evaluating your options and improving your best alternative so you are never left unprepared.