March/April 2010, eSide Supply Management Vol. 3, No. 2
Getting ready takes lots of preparation, planning and organization — but it's worth it.
Preparation is complete. Your leverage tools have been identified and developed. You've built up your knowledge and collected critical information. You're ready for the face-to-face negotiation — or are you?
Unless you want all that hard work to go to waste, there's one more step: charting a course for the negotiation. Now is the time to start organizing a plan using all the information, knowledge and tools you've developed.
With regard to negotiation, I prefer two-member teams. This arrangement makes it easier to control what goes on during the negotiation and helps to coordinate strategy. Select as a team member the person representing the department that is buying the item or service (assuming you work well together). Enlisting someone who knows the product or service minimizes confusion about technical jargon and also provides an expert to call shaky performance claims into question. On the other hand, if your negotiating partner is inexperienced, the onus is on you to provide the necessary preparation and guidance.
Make sure you and your negotiating partner have coordinated your responsibilities for the negotiation. Typically, you will do most of the talking and actual negotiating; but, if you have an experienced negotiating partner who works well with you, you might want to divide the negotiation into technical and nontechnical pieces. Either way, be sure to have predetermined strategies worked out in advance. You should both be on the same page at all times regarding your goals for the outcome.
Establish a target point and bottom line on each issue to be negotiated. However, don't create a system that is so rigid there is no wiggle room — a negotiation process is too dynamic to pin yourself down.
Opening points will be less predictable and more reactionary, so review the principles on how to make an opening offer. Some of the most common issues include:
These and other issues are sometimes negotiated individually, but — more often than not — opportunities exist to combine them in different ways to get better concessions in return. Also, plan to negotiate the most important issues near the end of the bargaining. It keeps the interest level high throughout, as everyone anticipates the big-ticket items will come later.
Next, determine which points you are willing to concede and to what degree (and what) you expect to get in return for each.
Also keep in mind that other points might arise during the course of the negotiation. Provide alternate scenarios wherein different concession patterns on your part might result in different concessions from the supplier. Rarely will the negotiation play out exactly as you planned, but it is a good practice that will condition you to expect concessions of an appropriate level in return for those you plan on giving.
Identify the tools you anticipate using to move the negotiation in your direction. Tools you are less likely to use should be included, but de-emphasized.
Also, take some time to review "negotiating 101" principles. These will prepare you for situations you can anticipate, and for those you can't, such as:
Don't waste all your preparation work by failing to properly strategize and organize. Better yet, embrace it as one of the most enjoyable aspects of the face-to-face negotiation process!
Kris Kramer is the president of Lifecycle Enterprises, a speaker, trainer, consultant and author of Don't Leave Your Company's Money on the Table: Negotiate to Save Millions. To reach this author, please send an e-mail to email@example.com.
For more negotiation strategies, visit the ISM articles database.
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