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Planning for a Negotiation

Written by: Nikki Owen

Article Overview: The fundamental difference between selling and negotiation is that selling is a process to identify the fit between what the seller is offering and what the buyer is seeking. Negotiation is the process of agreeing the terms of the deal and is part of the selling continuum. Yet, the negotiation should only begin when there is a genuine commitment from the buyer and seller towards a conditional sale.

Planning for a Negotiation

It’s a bit like dating, usually a person is unlikely to book a restaurant until a date has been agreed to! Equally the person being asked for a date wouldn’t particularly care about the restaurant choice unless they were sufficiently interested in attending the date. Once the date has been
agreed it’s simply a matter of agreeing/negotiating the type of restaurant, location and time. When an individual is or has committed to do something, their level of interest rises dramatically, which is why the negotiation phase can be a hotbed of emotional intensity and tension.

Excellent salespeople use the selling phase to lay the ground rules for a possible future negotiation by ensuring that they fully understand their prospect’s requirements, and decision making process while planting seeds and setting the tone for the negotiation phase. If for example you do all the giving through the selling phase, you have established the presupposition that you’ll continue to do all the giving in the negotiation phase. The transition from selling to negotiating can only occur when the desire to do business has been evoked in their prospect.

Start with the end in mind
The benefits of a well-negotiated deal can have a major impact on bottom line profit, and naturally when the buyer and seller enters into a negotiation they both want the best possible deal for their own organisation. It’s little wonder that negotiations are viewed as competitions where the outcome has to yield winners and losers. The ‘winning’ negotiator may experience short-term gains, yet long-term gains may prove harder than winning the lottery! That’s why the process of creating an agreement that each party will willingly fulfil is referred to as Win-Win, and provides increased probability of sustaining long-term customer relationships. Every negotiation has the potential to achieve one of the following outcomes:

● Win-Lose - where your customer wins a better deal at your expense and can lead to an unprofitable long-term relationship, because you have conceded too much to sustain future account servicing and growth
● Lose-Win - where you win a better deal at your customer’s expense which can cause bitterness and resentment, resulting in cancellations and a myriad of issues that stem from negative emotions
● Lose-Lose - which is symptomatic of big egos on both sides that are prepared to ‘fight to the bitter end’ just to do a deal. This outcome creates bitterness and relationships are unlikely to continue past the short term
● Walk-Away - which is actually a better outcome than all the above because it preserves the possibility of a future relationship that is profitable for both parties
● Win-Win - where both parties have made concessions yet both the buyer and the seller are willing to comply with the agreed terms, and share a perception that the outcome was fair to both

Recognising the importance of Win-Win outcomes is the first step towards planning to create an environment where both people are willing to share information, and invest time in the negotiation process. Some people see themselves as natural, spontaneous negotiators which may get the
adrenaline pumping yet a lack of planning can result in lost revenues, lost opportunities and lost time. Thorough preparation is more likely to create and instil a high level of self-confidence, as well as create an increased probability for a Win-Win outcome.

Here is a useful checklist of questions that will ensure good preparation practice:

● Who’s got the most leverage? (the better bargaining position)
● How strong is your proposition?
● How strong is the other party’s proposition?
● What will you and the other party be asking for?
● What are your options and alternatives?
● What is the cost/value of each negotiation point?
● What are the other party’s worries, frustrations and motivations?
● What are the fixed and variable points from all sides’ perspectives?
● What ideally do you want to achieve?
● What is your fallback position from which you are not prepared to move?
● What are your fixed points?
● What can you use as concessions if you decide to trade?
● What are the real issues for you?
● Who will be attending the negotiation?
● What are their roles?
● What are their positions?
● Is the decision-maker present?
● In your team, what roles will you be taking?
● Who will handle which issues?
● How would you describe the negotiation style of the other party?
● How will this effect your own approach in the negotiation?
● What did you learn from your last negotiation that you can apply to this one?

Related Articles
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  ESCALATION AS A NEGOTIATION STRATEGY
  "How To Avoid The most Costly Mistakes Most People Make When Negotiating - Part 2
  Eliminate Ranges From Your Negotiating Vocabulary
  Negotiation Success Step Two Do Your Homework

Article Tags: best possible deal, bottom line profit, competitions, customer relationships, decision making process, emotional intensity, fulfil, hotbed, negotiation phase, negotiations, negotiator, planting seeds, presupposition, probability, relat, restaurant location, salespeople, term customer, winners and losers, winning the lottery



Related Forum Posts
Re: How do you make the most of your day? - Planning, To Do lists, and deadlines all help me. Also being self critical of my own time management helps me raise the bar. I still check email too often though.
Re: Success - I think it was Gary Player who said the harder I practice the luckier I become when it came to his success as a world class golfer. Planning and dedication to a task can make all the difference between success and failure. MichelleJ
Re: Quote of the Day - "If you hesitate, some bolder hand will s - Excellent quote, Evan. This reminds me of the saying, "The early bird catches the worm." It's important to act on impulses, rather than hesitate and plan. Planning isn't a bad thing and is warranted in certain cases, but those who act quickly will get a step ahead of the competition.
Nice List - Nice list, and I agree with everything you all have added! Planning is the biggest one of all! Look at everything from every aspect possible, and then ask others to look at it as well. It's extremely important that you consider everything before jumping into things, and it goes so much smoother! Also, some young entrepreneurs tend to have an unrealistic mindset (I can sell 4000 of this product in my first week!). Make sure you know what you're getting into, and don't expect something that won't ever happen. ~Marie
Books for Women Entrepreneurs - There's a thread for good books in the Resources folder, but it doesn't target books for businesswomen particularly, so I figured I'd start such a thread here. It doesn't matter how successful you are in your business - it's always possible to learn something new. In subsequent posts I give Table of Contents and brief descriptions for various titles - most of them devoted to the businesswoman - and sometimes a review. If anyone else has read a review, or has read the book and found it useful, please comment! 1. The Old Girl's Network 2. Mother's Work 3. The 7 Greatest Truths About Successful Women 4. Pitch Like A Girl 5. Workplace Warrior 6. Treasure Hunt: Inside the Mind of the Modern Consumer 7. Contingency Planning & Disaster Recovery 8. She Wins, You Win 9. Napoleon On Project Management 10. Why Good Girls Dont' Get Ahead, But Gutsy Girls Do 11. Comeback Moms: How to Leave Work, Raise Children, and Restart your Career even If you Haven't Had a Job in Years 12. The One Minute Millionaire 13. Talking From 9 to 5 14. Soloing: Realizing Your Life's Ambitions 15. 101 Best Home Based Businesses for Women: Everything You Need to Know About Getting Started on the Road To Success 16. Work With Passion: How to Do What You Love for a Living. Revised and Expanded 17. Fail-Proof Your Business: Beat the Odds and be Successful 18. Confidence: How Winning Streaks and Losing Streaks Begin and End 19. Women Don't Ask: Negotiation and the Gender Divide 20. Millionaire Women Next Door: The Many Journeys of Successful American Businesswomen 21. Start Small, Finish Big: Fifteen Key Lessons to Start - and Run - Your Own Successful Business 22. Rewired, Rehired or Retired: A Global Guide for the Experienced Worker 23. The Martha Rules: 10 essentials for achieving success as you start, build or manage a business 24. The Essentials of Entrepreneurship: What it takes to create Successful Enterprises 25. Net Ready: Strategies for Success in the E-conomy 26. The Promotable Woman 27. Leave The Office Earlier: The Productivity Pro shows you how to do more in less time and feel great about it 28. The Work At Home Balancing Act: The professional resource guide for managing yourself, your work, and your family at home 29. Secrets of Six-Figure Women


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