What is it that you want out of your negotiation? More importantly, what do you need? And please don’t say, “I want a good deal.” or “To make money.” Holy shit. If I hear that again, I might lose it!
As shocking or strange as it may sound, most people go into negotiations with no idea what they actually need or want. First things first. Needs are different than wants. A need is something that you ‘must have’. A want is something that’s ‘nice to have’.
“I don’t get it, Mark. What do you mean?”
Well, let’s think about this for a minute. What are some of the things that you could need or want from a negotiation?
- Do you need/want a reduction/increase in price? How much of a price increase do you need/want?
- Do you need/want a reduction of risk? How much risk needs to be reduced?
- Do you need/want to enter a new market? What are you willing to concede to enter that new market?
- Do you need/want to grow the account? How much do you need/want to grow the account?
- Do you need/want a quick win?
- What are your business goals?
- How does this negotiation align to your overall business goals?
- What is most important to you to attain?
Do you see? You need to know what you need or want! Once you’ve developed a list of needs and wants for your negotiation, put yourself in the other party’s shoes. What could they need or want? Knowing what the other party needs or wants allows you to shape the negotiation to meet their underlying interests and allows you to develop a win-win deal.
Okay, so now that you know what you need and want and you’ve developed a list of what the other party may need or want, then you have to know what you’re willing to give up/concede.
Yes, you have to plan your concessions. Where are you willing to put flexibility into your negotiation? What are you willing to give away? What prices are you willing to reduce or what risk are you willing to take on? Now put yourself in the other party’s shoes and think of what they may be willing to concede.
Now you’re getting the idea. Going into a negotiation knowing what you need or want is more than just saying, “I want to make money.”. Negotiation is a disciplined, strategic, formulaic way to conduct business. And without the necessary preparation, you’re not setting yourself up for success.