Prepare Tradeables to Remain Flexible in Negotiation via Randy Kutz, Ep #342
Randy Kutz believes that negotiators are missing opportunities if they aren\u2019t planning. Why is it so important? High stakes B2B negotiations take time. You have to build relationships. If you\u2019re not prepared to negotiate and reach a successful outcome, the quality of the deal suffers. You might still come to an agreement\u2014but it could have been better if you prepared.\xa0
If someone enters an agreement they don\u2019t like, they\u2019ll look for\xa0every opportunity to kill that deal.\xa0If you stumble in your preparation, it may decrease the likelihood of future partnerships with your counterpart. If you\u2019re not prepared, the power balance shifts to the other side.\xa0
These are just a few of the reasons why negotiation preparation is a must. Randy covers the topic in more detail in this episode of Sales Reinvented!\xa0
Outline of This Episode- [1:02] Why planning and preparation is an important step in negotiation
- [4:50] The key steps you should take to prepare for a negotiation
- [11:25] The attributes or characteristics that make a great negotiation planner
- [14:34] Tools and resources to improve your negotiation outcomes
- [16:14] Randy\u2019s top three negotiation planning dos and don\u2019ts
- [20:22] Preparing tradeables ahead of time helps you remain flexible
Randy believes there are obvious steps: Make sure you know what you want, what your positions are, etc.\xa0
But the more pressing need is to take time to understand what the other side wants. We often make assumptions about the other side based on our own bias. Or maybe we\u2019ve done business with them before. It\u2019s okay to make assumptions but then you have to test them. What if you put yourself in your counterpart\u2019s shoes and prepare from that side of the table?\xa0
What are the underlying drivers? What are their priorities?\xa0Successful negotiators know that a negotiation is about trading. You want to trade low priority items off the table and exchange them for higher priority items. But you have to know what the priorities are.\xa0
What are you willing to give up? What are you going to ask for in return for concessions?\xa0You have to be prepared to know what to ask for. If you\u2019re not prepared, you settle for goodwill gestures.\xa0
Lastly, Randy advises that you shouldn\u2019t forget about your internal stakeholders. Negotiation is about the dealmakers\u2019 ecosystem. The internal stakeholders are a value-add that can help you prepare effectively.\xa0
The attributes or characteristics that make a great negotiation plannerAn effective negotiation planner is someone who takes a systematic and disciplined approach to negotiation. They\u2019re someone that uses a framework or template. This helps them identify their priorities and those of the other side. A good negotiator is prepared to adjust their positon and be flexible. If a strategy doesn\u2019t work, a good negotiator\xa0plans an alternative.\xa0
Randy\u2019s top three negotiation planning dos and don\u2019tsThese are a few things Randy wants salespeople to be mindful of:\xa0
- Budget enough time to thoroughly plan your negotiation. If you\u2019re planning on a 15-minute negotiation phone call, prepare for at least 30 minutes.\xa0
- Leverage your ecosystem and involve internal stakeholders in the preparation. They have knowledge that you need to thoroughly prepare for your negotiation.\xa0
- Prepare a flexible strategy to avoid deadlock. People will disagree and say no. What will you do when that happens? Take a break, regroup, and come back to the table with adjustments.\xa0
- Don\u2019t wing it, no matter how familiar you are with your counterpart. Apply some out-of-the-box thinking.
- Don\u2019t plan to negotiate only on the monetary variables. You need more tradeables. If you get stuck on one variable, whoever has more power tends to win. It won\u2019t produce the outcomes you\u2019re looking for. Plan what you want to ask for and what you\u2019re willing to give.
- Don\u2019t leave assumptions untested. Ask questions to understand the drivers that underline the positions of the other side. Negotiation is an information game.\xa0
Developers in New York City bought a building in hopes of rebuilding a high rise. But they had to negotiate four senior citizens out of the building first. They were able to reach a settlement with three of them for under a million dollars. But the fourth one fought back. This person didn\u2019t want money. They didn\u2019t need it. They wanted an apartment that overlooked central park.\xa0
Working through the details took longer than planned because they weren\u2019t prepared. In the time they waited, the person changed their position and also asked for a large sum of money and got legal representation. The developer ended up paying 17 million dollars to evict the tenant and still gave him the apartment overlooking central park.
You need to prepare for the fact that it isn\u2019t always about money. Once you understand what someone really wants, be prepared to be creative and flexible. Had they done that, they could\u2019ve saved a lot of time and money.\xa0
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