negotiation training

Negotiating Range
In the preparation phase you should define your bargaining objectives in a way that best suits your specific circumstances. The following classification is suggested as a general guide:
1.      Ideal - the best deal you can hope to achieve.
2.      Minimum - the least you would be prepared to settle for.
3.      Target - the deal that you believe is realistically achievable.

Negotiation training - don’t forget that the other side will also have the same sub-conscious criteria, and it is only when your target zones overlap that a settlement can result. Assess what the other side wants or is prepared to offer. The difference between their position and your offer is the negotiating range. If your maximum matches, or exceeds, their minimum then this indicates that a settlement is achievable.

Planning Concessions
Knowing what you want from a negotiation depends on two factors: understanding what is possible, and evaluating what is important. The extent to which you should plan concession trading will depend on the importance of the deal and to some extent the likely timeframe for the negotiations. Make a list of all of the things you’d like to achieve. For each item decide what would be the worst position that you would be prepared to accept. It is important that you are clear in your own mind about exactly what you would be prepared to give up. Then consider how you would build up a package which would allow your concessions to be exchanged for concessions from the other side.

When planning concessions a variety of other factors should be considered, not just the price of the deal. For example:
1.      Could you accept a higher price for a concession on payment terms?
2.      Could you include the first year’s maintenance contract free if the other side commit to renewing it at market price for the following three years?
3.      What about delivery and installation terms, parts and service charge warranties?
4.      Would you consider assisting one of your major customers in their future promotions?

Put your ideal list of results in priority order, in accordance with your overall success criteria. List all of the possible concessions on each issue and evaluate the impact of each one. When, during the negotiations the burden falls on you to offer a concession you can check over your list and make a counter offer that reduces your demands as little as possible - preferably by only one notch on your lowest priority objective.

Standard Contracts
Depending upon the nature of the deal, you may be able to use existing contracts and other documentation and modify them as the negotiations proceed. Alternatively, you may need to develop original documentation to accompany the negotiation process. The other side may also come to the negotiation with pre-prepared documentation. It may prove beneficial for both sides to review each others documents ahead of the initial meeting. This may clarify issues such as the requirements specification, maintenance intervals, payment terms, warranties etc. Standard terms and contracts are often used to open the negotiations and as such can be thought of as representing an opening position. This can be used to your advantage by carefully screening your paperwork for sensitive or contentious issues, whilst obtaining as much detail as possible from the other side.

A Negotiating Agenda
A well prepared agenda is one of the key aids to a successful negotiation. Tabling an agenda is a positive move, regardless of who is in the stronger position, as it shows that you are looking to progress the negotiations and that you have taken the trouble to plan how to do this. However, the downside to tabling an agenda is that it can reveal key aspects of your opening position. For example it may show your priorities, preferences and possibly your intended strategy. The agenda should aim to introduce the issues in such a way as to promote a favorable reaction and hopefully early convergence on key points. This should be followed by addressing, one by one, those issues where there are known differences - starting with the least important.

The issues that the agenda should address include:
1.      The main issues to be considered.
2.      A list of any areas to be omitted.
3.      The negotiating sequence - top down or bottom up.
4.      The timescale and progress that you anticipate.

Adopting a Tough Opening Position
The opening phase of a negotiation represents the most important opportunity to influence the other side. You should use your opening to manipulate the other side’s expectations to be more in line with what you want. This is why it is almost always in your best interests to adopt a tough opening position. Careful preparation is the key to ensuring that a tough opening stance is credible.

The Opening Dilemma
All negotiators will encounter the opening dilemma - the challenge of being as tough as possible whilst remaining credible. If the other side consider your opening position to be ridiculous then negotiations may be terminated before they have started. At the other extreme an offer that is too accommodating may be snapped up immediately - leaving you with the realization that you have seriously undersold your position. Ideally your opening statement will be backed up by thorough research and will also be tabled in response to an opening statement from the other side.

Several factors need to be considered, for example:
Is the other side’s attitude tough or easy-going?
Are their expectations reasonable?
Do you feel as though a deal is possible?
By weighing up factors like these, you should be in a position to counter with a credible offer.

Establishing Credibility
The expectations within a negotiation are often entirely subjective. External factors can be virtually eliminated by the interpretation put on events by the two sides involved. Therefore, establishing a tough but credible opening position may not be as difficult as first thought. The credibility of the pitch only needs to be established in the minds of the other side - not in the minds of a panel of neutral observers. The real issues can be summarized as what the pre-opening expectations were, how these expectations were adjusted during the opening phase of the negotiation and the issue of overriding importance - how badly both sides want to do the deal.

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