One of the big mistakes I have seen over and over during my business career has been executives negotiating against themselves. I’m not talking about simple role-playing to sort out how best to attack a problem. What I mean is a group of businesspeople sitting together to plan strategy or review a contract and talking themselves out of a deal point because they believe that the other side won’t go for it even though they’ve heard nothing from the other side. Dummies! Here’s what I think is a better approach.
First, spend time in advance of any negotiation figuring out your bottom line. By that I don’t just mean profit and loss although that weighs into the price equation. I mean what are the issues where you MUST win and what are the areas where you have flexibility. For example – you might have a cost structure that requires a certain level of pricing no matter what volumes of business are guaranteed to you. You don’t want to sign a deal at a loss, obviously, so when price comes up you know your number (which should include a profit for you!) and can be flexible right up to it. You may not, however, care about the stipulated negotiating period for a renewal or other business terms. Let the other guys dictate the terms – it’s a chip in your stack.
Second – never pre-emptively counter your own offer. You know the drill – I propose a price, you say no. I lower it, you say no. Bad move – I should make you state a price you think is fair – even if it doesn’t work for me – or I’m negotiating against myself.
Finally – learn to shut up. Learn that “no” just means “not yet”. Listen a lot more than you talk. Most of all, remember that if you don’t ask, you don’t get. Talking yourself out of asking for something that you may not really need in a deal but which would be nice to have is dumb. If you’re clear about what’s a “need” and what’s a “want” and get a good handle on what those are for the other party, you’re well on the way to making everyone happy with the outcome.
Do you have more to add? This work for you?