The Critical Negotiation Skill Of Setting Efficient Objectives For Your Commercial Negotiations.
A critical negotiation skill in your purchasing negotiations is how you go about planning your objectives.
I want to share with you 3 important points that we cover in our negotiation skills training programmes to consider when you are planning for your negotiations.
1. What is the absolutely best outcome for you in this negotiation?
What would a fantastic agreement (one that you would be extremely happy to agree to) look like?
We call this your aspiration base - in other words, the level at which you will aspire to close the agreement.
You should know that it is key in your negotiation to always ask for a little more than you expect to get. This means that you should always have an aspiration base that is higher than your desired outcome. By asking for a little more than you would like to achieve you allow yourself to make a concession to your counterpart in exchange for a counter concession.
On the upside, you may just get what you regard to be fantastic if you ask for it! Don't make the mistake of making decisions on behalf of your counterpart by saying to yourself they will not consider that .Take note that I am not proposing that you make extreme requests - extreme demands are highly risky and dependent on the cultural environment within which you are negotiating.
2. What is the absolutely minimum acceptable outcome for you in this negotiation?
At what point will you decide to stop or postpone your negotiation?
If you do not decide on a specific point at which it will no longer be realistic or attractive for you to conclude a deal, then you may become susceptible to reaching an agreement that you will not be able to live with. This is vital to do as you could easily become emotionally committed to reaching agreement at any cost because you may think that your personal reputation is at stake.
3. What do you think are the aspirations and minimum acceptable transaction levels for your counterpart?
It is also important that you think about the aspirations and minimum acceptable deal levels from your counterparts perspective. This will never be an exact science but through proper preparation and research of supporting information you may be able to get a good idea of what kind of transaction is the norm in your industry or kind of negotiation.
By considering the aspirations and minimum acceptable transaction levels from your counterparts point of view, you will be able to identify the bargaining range. Being aware of the agreement range or zone of possible agreement (ZOPA) will help you to see if a deal is possible or not.
Most negotiation training workshops will teach you that the bargaining range is defined as the area of overlap between your minimum acceptable deal level and the minimum acceptable deal levels of your counterpart.
Remember that most of your success in negotiation is dependent on the quality of your planning. You should spend at least as much time planning for negotiations as you expect to be busy negotiating. If you expect to be in negotiations for an hour, then you should spend at least the same time in preparations.