Five Negotiation Necessities

The challenges of negotiation are common threads in today’s headlines. I wanted to share some thoughts from my years of negotiating. I’ve negotiated many deals ranging from multi-billion dollar agreements to getting the right deal on a car. I’ve found the basic necessities are the same for both.

Merriam-Webster defines negotiation as “The act or practice of each side giving up something in order to reach an agreement.” In B2B we benefit by treating it in a more precise manner. I define negotiation as “The act or practice of each side giving up things they want to get things they need.”

1) What do we need?  These are the things that, if omitted, could keep us from reaching company and personal goals. These are walk-away terms. It’s important to note that there are needs driven by quantitative business objectives but there are also needs driven by personal goals of decision makers, influencers and people doing the negotiating. The business objectives are most often the easiest to determine. Putting more work into understanding what stakeholders need makes for a better negotiation result. Without clearly defined walk-away terms we are not ready to negotiate.

2) What do we want?  These are things that can enhance goals, provide assurances or make implementation easier. These are nice-to-haves that we can give up and still meet our goals. We must prepare to clearly articulate why we need these nice-to-haves so their importance is indistinguishable from must-haves. It’s also important to find wants that match our customer’s needs. Sometimes we have to help create these by doing some internal negotiations, but I always enter talks with one to three of these.

3) Are we both at risk?  Is an agreement paramount to both sides? Can each side lose if the other loses? If the answer isn’t yes to both these questions we lack the foundation for a true negotiation. These are the times when we end up across the table from someone who can’t answer a question without leaving the room. This is frustrating to say the least. We need to negotiate with people who are at risk if the negotiation fails. In these cases, we find the toughest and best negotiators because they’re typically empowered to have real discussions. Some of the best win-win agreements I’ve negotiated came when both my negotiating partner and I had our jobs on the line.

4) What do they need?  We should be able to make an educated list of the customers’ needs. If we can’t, then we aren’t ready to negotiate. Certainly there will be things we learn during the negotiation but we have to start with a list of the business and personal results our customer needs for them to win by choosing us. The customer stakeholders have to win in order for this to result in successful, repeat business. This is the goal of win-win negotiating.

5) What do they want?  Like us, the customer will have things that enhance their win but aren’t needed. Smart negotiators are very good at describing these wants as dire needs with all of the data and modeling to prove it. This is where knowing the customer and how they win is crucial. It’s up to us to distinguish between needs and wants just as they have to do with us.

In B2B we usually negotiate with people we intend to do business with again. Preparing with these five negotiation necessities helps get us to win-win so we can each thrive with a long-term relationship full of benefits for both sides.

My next blog will discuss how personal wins and losses can often be the strongest determinants in closing or not closing a deal. Strong personal relationships formed with decision makers and influencers before the negotiations start is a critical preparation step if win-win is our goal. More to come.

©2013 Rick Wong – The Five Abilities® LLC

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