9 Steps for Negotiation Preparation Success
Follow these 9 negotiation preparation steps to consistently reap healthier profits in your next negotiation. Taken from our negotiation training methodology: the Value Creation Framework.
Have you ever left a negotiation feeling battered and bruised like you never had a chance from the word go? Too often, I’ve seen smart yet unprepared sales professionals torn apart in their meetings. Admittedly, I suffered similarly early in my career. I notched my initial failings up to being part of my hard knocks sales negotiation training journey. Does the path to negotiation success have to be treacherous?
I’m a big believer in practicing before the game, not in the game. Charm and charisma only go so far when you’re up against a tough-as-nails competitive negotiator whose upcoming performance review is dependent upon ensuring that you get less than a satisfactory deal.
Here are nine steps to prepare for your next business negotiation.
Know Your Strategy
If your negotiation strategy isn’t clear to you, how can you expect to enjoy results that benefit your company the most? If senior management hasn’t made clear your strategy, which is sadly too often the case, make sure you ask.
Choose Your Negotiating Style
Will you lose the battle to win the war? Will you compromise and meet in the middle? Might you compete to the bitter end? Make sure to choose a style that best fits the circumstances. (For more on this, See: “5 Negotiating Styles to Consider When Closing a Deal.”)
Do you want to maximize the short-term value or work to establish a longer-term collaboration that grows in value over time? Is your goal to steal market share at the expense of profit? Make sure to know what you want going in, instead of settling for what you end up with.
Prepare a SWOT Analysis
A simple but often overlooked tool. Think of the real external opportunities and threats as the walk-away positions on both sides. True power in any negotiation is having developed a good walk-away alternative. Understanding this point may not get you the deal you want, but it will prevent you from agreeing to a lousy deal.
List Pre-Meeting Questions
I was once told while being trained by a mentor that once you understand someone’s motivation, you are in control. In negotiations, information is power. If you hope to get creative and stack the cards in your favor, it pays to know everything you can about the other side’s decision-makers, underlying interests, and walk-away position.
Compile Options / Deal Design
Negotiations are an opportunity to get creative. Work with your team and put together a comprehensive list of options to consider in designing your deal. If you’re not comfortable with numbers, make sure someone on your team is. Make sure to leverage your SWOT’s “Opportunities.”
Form a Trading Plan
Armed with information from your pre-meeting questions, you are ready to start prioritizing your interests. What can you trade? What can you get in return? Start with your most important interests or goals first. Our full Trading Plan is too complex to explain in this article but is a very worthwhile read.
Set the Agenda
If you don’t set the negotiation agenda and take control early, the other side likely will. Email your agenda before the meeting, and print a copy to use during the talks.
Build a Team
Avoid entering talks alone. Anyone who has ever been ganged up on knows the dangers of feeling isolated. The same goes for preparing to negotiate. So, it’s important to co-opt a colleague or two. Ensure that your negotiation team is clear on your strategy and respective roles. Without clearly defining these aspects (see: negotiation definition), you run the risk of contradicting each other at the negotiating table and losing the upper hand.
Now that you have a clear process for preparation, how long should you invest in your preparation? My rule of thumb is to invest at least three times the amount of time you expect to negotiate. So, a two-hour face-to-face meeting needs about six hours of preparation. This doesn’t mean that you need to spend six straight hours locked up in a room preparing. Instead, pace your team and yourself in the days and weeks leading up to the meeting.
Our veteran negotiating clients are quick to train their more junior colleagues on the idea that success in negotiating is determined by what you do before you sit at the table. Moreover, tactics and behavior won’t deliver consistent outsized results.
Finally, for strength and confidence, look to your negotiation preparation process. It’ll come as no surprise to you that our negotiation training seminars cast the lens right from the start on… preparation.