Negotiation - live or die
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After an intense week of mid-year and early-year negotiations, I wanted to chat with you about negotiation - my habits, my best practices….
When I talk about negotiation, I mean an exchange between parties aiming to reach a deal, a framework, or a solution that works for everyone involved.
Preparation: The Critical Step
A successful negotiation is built on meticulous preparation, and that breaks down into two parts: internal prep (yours) and external prep (focused on the other party).
Internal prep is all about getting clear on your own objectives:
What exactly is the goal of this conversation?
What's your breaking point?
What additional requests can you make?
Where are you willing to compromise?
It’s also crucial to have a BATNA (Best Alternative to a Negotiated Agreement) - a backup plan if things fall through. This keeps you in a strong position, so you don’t cave under pressure.
External prep is all about the other side. You need to understand their context, expectations, and limits:
What authority do they have in the negotiation?
How do they think?
What are their top priorities?
What levers can you pull to build trust or guide them toward accepting a key point?
The amount of research you do depends on how important the negotiation is. For a simple discussion, a quick social media scan might be enough. But for a more complex negotiation, you may want to bring in intelligence experts or use specialized tools.
This prep will help you clearly frame the discussion, structure your arguments, and maximize your chances of steering the conversation in your favor.
Game Day: The Art of Steering the Conversation
On negotiation day, you come in with a crystal-clear idea of your goals, from your dream outcome to your walk-away point. But beyond your own priorities, it’s crucial to focus on the other party to create an open, productive environment.
Your assumptions about the other side (their needs, preferences, deal-breakers) are there to be tested. Start by asking simple questions to build trust, then slowly guide the conversation toward the key topics. The goal? To find a shared goal - a common ground that’ll ensure the agreement sticks.
When the conversation kicks off, let your personality and experience shine. If you know your product is seen as pricey, address it head-on: “Let me be direct: yes, this product is expensive... (pause)... but here’s why it’s worth it.” By bringing up the price first, you control and shape the discussion.
A few essential principles should guide this process:
Active listening: Anticipate and defuse objections.
Take your time: Don’t rush - patience pays off.
Manage emotions: Emotions are a tool, but you’ve got to keep them in check.
Explore the other side’s goals: The more you understand what they’re after, the better your chances of finding common ground.
It also helps to be aware of cognitive biases that can influence negotiations. For example, the anchoring effect (which gives too much weight to the first offer) or loss aversion (which makes people want to avoid even small losses). By staying mindful of these biases, you can keep a cool, rational approach throughout the discussion.
And remember: when making concessions, do it carefully. If you give something up, always ask for something in return. This keeps things balanced and shows that each compromise brings you closer to a deal.
After the Negotiation: Formalization and Follow-up
Once a deal is reached, don’t underestimate the importance of formalizing it. While gentleman’s agreements and handshakes can work in some cases, it’s essential - especially in complex negotiations - to lock things down legally. This prevents any misunderstandings or future disputes.
Take the time to document everything and make sure both parties are clear on the expectations. A confirmation email or follow-up meeting can help solidify the agreement and ensure everyone is on the same page.
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Catch you soon!