A critical negotiation skill in your purchasing negotiations is how you go about preparing your objectives.
I would like to offer you 3 key points that we cover in our negotiation skills training workshops to consider when you are preparing for your negotiations.
1. What is the absolutely best outcome for you in this negotiation?
What would a absolutely wonderful agreement (one that you would be delighted to agree to) look like?
We call this your aspiration base - in other words, the level at which you will aspire to close the transaction.
You should be aware that it is important in your negotiation to always ask for a little more than you expect to receive. This means that you must always have an aspiration base that is higher than your desired objective. By asking for a little more than you would like to achieve you enable yourself to make a concession to your counterpart in return for a counter concession.
On the upside, you may just get what you regard to be ideal if you ask for it! Don't fall into the trap 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 demands - extreme requests are very risky and dependent on the cultural environment within which you find yourself.
2. What is the absolutely minimum acceptable outcome for you in this negotiation?
At what point will you decide to end or postpone your negotiation?
If you do not decide on a specific stage at which it will no longer be feasible or attractive for you to close a transaction, then you may become susceptible to reaching an agreement that you will not be happy with. This is critical to do as you could easily become emotionally committed to reaching agreement at any cost because you may think that your individual reputation is at stake.
3. What do you think are the aspirations and minimum acceptable agreement levels for your counterpart?
It is also important that you consider the aspirations and minimum acceptable deal levels from your counterparts point of view. This will never be an exact science but through proper planning and research of supporting information you may be able to get a good idea of what kind of transaction is the norm in your line of business or type of negotiation.
By considering the aspirations and minimum acceptable transaction levels from your counterparts viewpoint, you will be able to identify the bargaining range. Knowing the agreement range or zone of possible agreement (ZOPA) will help you to see if an agreement is possible or not.
Most negotiation training programmes 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 at the negotiation table is dependent on the quality of your preparation. 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 a day, then you should spend at least the same time in preparations.
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