Sunday, April 22, 2012

What to do when negotiating with a better negotiator,

The first thing to remember is the reason why you are having the negotiation in the first place is because both sides felt that have something to gain that will be lost if no agreement is reached.

If you can afford the delay consider bringing someone else into the negotiation to help you. I once was negotiating with a Japanese supplier that had brought a team of six people to the negotiation. As the negotiation progressed their team had significant discussions in Japanese and then the individual who was most fluent in English but who was not the decision maker would respond. Instead of negotiating with one party, I was negotiating against the team. I took a break, checked with my manager who told me that one of managers from our Japanese procurement office was in town. We asked him to participate in the negotiation and that changed the entire dynamics of the negotiation. The talking among the supplier’s team ended as I had someone at the table that would understand what was said. I would then explain what we needed and why to my Japanese counterpart who would then address that in Japanese to the true decision maker. I still did the negotiating but he helped me be successful.

If you don’t understand what the negotiator is proposing or the impact, always defer your response until you can discuss it with someone that will understand and can explain what it means, and what the impact will be. Don’t get pushed into agreeing to things you don’t understand.

If you prepared well, you should have established your goals and minimums. Never agree to anything less than your minimum. Keep track of all the concessions you make and their cost impact to demand a price reduction.

If what they want will add to your cost or risk, identify that and say no.

If they need or want the business they will need to get your agreement. If they insist on getting what they proposed and that would make it a bad deal for you, you need to be prepared to walk away.

As the failure to come to agreement may be caused by the parties not effectively communicating, before you walk away take the time to clearly define exactly what the issue or point is that is the deal breaker that is causing you to walk away. Write that down. Share that with both your counterpart and with the Buyer or Supplier’s management team. The reason for that is simple. Many times the negotiator, especially of they represent or are part of sales, may be trying to make it a win for them. They may be limited in what they can agree to. They may not know what the company will agree to or how much they need or want the business. Taking the matter out of the negotiator’s hands and making management aware of it allows the other party to make it strictly as a business decision.

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