Negotiation Preparation = Negotiation Success

Mediocre sales
people are notoriously bad planners. It can be said that they habitually "play" more
than they "practice". Going into most sales interactions unprepared, thinking
they can "wing it" and negotiating "off the cuff". Top negotiators
know differently. Top performers know that in order to successfully negotiate with clients
they must plan carefully or risk being left vulnerable. Without proper strategy, your
opponents will use your lack of preparedness to their advantage. In other words, you
are likely to give up more than you intended because you didn’t have a plan.

Here are 9 areas
of planning to consider before you start a negotiation with a client:

Determine your goals

is the art and science of reaching an agreement that meets your and your client’s
goals. Your strategic goals create the measure you judge yourself by at the end of the
processes and need to be set before the negotiation begins. Your goals also will act
as your guide during the negotiation, supporting everything you say, every move you make
and every agreement you reach. Carefully planning your strategy in advance will ensure
you reach the goals that you and your company want to achieve. Remember that all goals
should be set using the S.M.A.R.T. formula (Specific, Measurable, Attainable, Realistic
and Time bound).

What’s your BATNA?

will happen if you do not reach an agreement with your client? One of the biggest negotiating
dangers is being too committed to gaining an agreement and being unduly pessimistic about
what would happen if the negotiation fails. In my experience, most sales people are overly
committed to having to reach an agreement (sometimes at the expense of all profitability)
when they have no other options. Do yourself a favor. Ensure you have at least 3 opportunities
waiting to close (or negotiate) for everyone that you are negotiating now. These 3 other
qualified opportunities are your "Best Alternative to a Negotiated Agreement (BATNA)" because
they ensure you will never feel desperate to close business.

The willingness
to walk away is the most powerful negotiation leverage you can have. You only will feel
able to walk away, if you have something else to walk away to. Yes, you understand me
correctly; prospecting is the key to negotiation success.

What is your position?

goals for your negotiation can be called positions. Positions are simply your statement
of what you need to get in order to accept the deal. You should take some time before
the negotiation to document what you want to get, need to get and what would be nice
to get out of the interaction. Writing down these positions will make them clear in your
mind and will help you focus the discussion. While you are at it, it is good practice
to guess at what the client will want and intend to get as well.

Hide and Seek.

well as positions, we all have other things we want to hide from (or avoid) and seek
in the negotiation. Often, these are more hidden or more political things. For example,
your client may want to save face and you want to augment your reputation. You may want
to avoid exposing conflict inside your own company and the client may want to avoid including
certain colleagues in the process. During your preparation it’s valuable to ask
yourself what you and the client seek, and want to avoid. It’s often the positions
in step 2, combined with the needs and concerns from step 3 and the hidden political
drivers that position the negotiation.

Find the missing link

you know your goals and positions, and you have taken a smart guess at your client’s
goals and positions. Now is the time to find the link between the two. Linking your goals
to the customer’s goals is a key to effective selling. A negotiated agreement is
only profitable if it satisfies all parties. The best way to accomplish this mutually
profitable relationship is to focus on finding the missing link between the objectives
of you and your clients. Of course it if difficult to do this accurately if you don’t
know what your client’s goals are. Think of this as a sales challenge: the better
qualified your client is, the more you know about them and understand their goals and
the better prepared you will be for the negotiation. Great negotiators start preparing
for the negotiation at the start of the sales cycle….and never stop!

What’s your bottom line?

bottom line is the absolute, last resort and final offer on each key issue. It’s
your walk away point. Setting a bottom line in advance of your negotiation is important
because it makes it easier to resist the temptation of agreeing to an unprofitable deal.
Setting a bottom line protects you from seller’s remorse and it makes it easier
for others to participate in the negotiation with you because you can provide a framework
for them to negotiate in. There are some downsides though. The most notable is that having
a bottom line can discourage creativity and may limit your ability to capitalize on new
information revealed during the negotiation discussions. Be careful not to set your bottom
line too high. It’s easy to over estimate the value of what you are selling – especially
if it is personal – like your car or house!

Identify your trip wire.

best negotiators document a trip wire for every negotiation which will indicate to them
when they are close to their bottom line. Your trip line is established to ensure you
do not enter into agreements that you will later regret. Establish a trip wire by identifying
an outcome that is slightly better than your BATNA and bottom line, but far from perfect.
When a trip wire is triggered during a negotiation, commit to taking a break and thinking
about the situation before accepting the deal. The last thing you want is to be forced
into a position to take a deal that is worse than your trip wire. As a last resort, accept
your trip wire and an acceptable end to the negotiation, ONLY if you are able to receive
something in return (see my No Free Gifts
for ideas).

Where are you weak?

one likes to admit they are not perfect. Especially sales people! The truth is, no negotiation
argument is perfect and yours are no exception. Everyone and every negotiation argument
has at least one vulnerability. Your weakness is that spot that threatens the achievement
of any one of your goals based on a real or perceived vulnerability in your argument.
Don’t ignore or brush off a perception. Your clients’ perceptions of you
are the reality in which you negotiate. When planning for a negotiation its wise to consider
your weaknesses and plan for effective responses.

Giving concessions.

my recent  No Free Gifts article we
spoke about the art of giving concessions. The first concessions you always give need
to be "non monetary". In other words, something that does not sacrifice the
price of the product. If the client will not accept a non monetary concession than it
maybe necessary to give a price break (monetary concession). For your point of reference,
a concession is the act of granting, yielding or surrendering a right, privilege or gift.
Your treatment of concessions will determine your success or failure in a negotiation
and long term relationship building. Always remember the cardinal rule: no free gifts!
For a worksheet to help you plan your monetary and non monetary concessions click

it may seem daunting to prepare for a negotiation. That is because often sales people
don’t like the thought of getting to work! According to CSO Insights,
just 10 minutes of prep can increase your effectiveness by up to 42%. Knowing that, doesn’t
it make sense too spend a little time thinking and planning before your next negotiation
rather than simply jumping in unprepared?