Tag Archives: negotiation process

Negotiations – You CAN predict what will happen next!

A common myth in negotiations is that you can’t predict what your counterpart will do next. I disagree. Use the approach professional buyers use. You can predict the behavior of your counterpart when you follow a negotiation process.

“How can you have a consistent process? Aren’t negotiators like drunks? You can never tell what a they will do from one minute to the next.” [Strategic Negotiations, Brian Dietmeyer]

You can predict with fair amount of certainty what will happen next. Negotiations don’t have to be unpredictable. Professional buyers anticipate the potential outcomes of the negotiation by being prepared and following a few simple steps.

Negotiations – The 4-step process

  1. Research- Acquire as much information as you can about the product or service. Most people do this intuitively.
  2. Target Range – think about the potential range of a successful negotiation. Most people also do this intuitively.
    1. what does a really great deal look like?
    2. At what point will you walk away?
  3. Identify your alternatives. Many novice negotiators miss this step
    1. What are your alternatives if you can’t come to an agreement?
    2. Never agree to a price that is worse than one of your alternatives
    3. Remember – doing nothing is an alternative.
  4. Strategy List. Novice negotiators often miss this step.
    1. What is important to you?
    2. Are there concessions they could give you that cost them nothing or very little but carry a great value to you?

Predicting what will happen next

How does this 4-step process help predict what your counterpart will do next?  It doesn’t. Unless you repeat the same steps for your counterpart. Applying the process from your counterpart’s point of view is the secret negotiation sauce.  Take time to look at the negotiation from 2-views, both yours AND your counterpart. Novice negotiators haven’t even thought about this important step.

  1. Research
    1. What research are they looking at?
    2. Where are they getting their information from?
    3. What assumptions are they making?
    4. Are their assumptions accurate?
    5. Can you correct assumptions that are inaccurate?
  2. Target Range
    1. What might a great deal look like for them?
    2. What is their walk away point?
  3. Alternatives
    1. What are their alternatives to “no deal”?
    2. Remember – doing nothing is an alternative for them too.
  4. Strategy List
    1. What is important to them?
    2. Are there concessions you could give that cost you nothing or very little but are a great value to them?

Think about how helpful it is to have this information during your negotiation conversation. This simple process works on negotiations for $100 or  $40 Million. Once you start looking at the negotiation from your counterpart’s view you can predict with greater confidence what will happen next. You will start asking deeper questions

  • Who is making the final contract decision? In some cases, their internal negotiations are more difficult than their external ones.
  • What is most important to your counter-part? You will start thinking about components of the negotiation beyond price. Is delivery, terms, order size, inventory, or brand more important to them?
  • You will look closer at all the potential concessions? Do you have a strategy for how and when to offer your concessions?

Start with a plan. Negotiate respectfully, ask the good question and listen. You will find in your next negotiation you can predict with a fair amount of certainty what will happen next.