5 reasons why negotiations go wrong – Part 1: Inadequate preparation

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Successful negotiations should follow 5 stages

In this series of posts, I will be looking at why negotiations so often go wrong, and what you can do to eliminate some of the most common errors that people make.

In this post, the first in the series, I will focus on what can go wrong and how to avoid potential problems, during the preparation stage.

Can you shift the balance of power and take control of the negotiation process every time?

I will be focusing on relationship-based negotiations, where you are dealing with the same party over an extended period of time, rather than transactional negotiations, where you might negotiate over goods at a local market or souk.

The key thing that goes wrong during the preparation phase is not spending enough time identifying your “tradeables”.

So what are tradeables?

Imagine you are selling website design services, your tradeables might be, licence fee, training, maintenance, guarantees, hosting, periodic upgrades, support etc.

If you are selling being clear about your tradeables, puts you in a much stronger position if the customer demands a discount. Without tradeables you will either have to agree to a discount which will directly impact your bottom line, or you will have to say “no”, which might spoil the relationship and even blow the deal.

Tradeables allow you to provide an alternative to the customer that may be more valuable to them than a discount, for example extra training, preferential payment terms, etc.

In essence what you are trying to achieve in any negotiation is to find something that will cost you little that is of significant value to them, and vice versa.

paper planeAirlines have become masters of tradeables

In years gone by you bought your tickets and that was that. Today, you have to consider how much hold luggage you want, hand luggage, sports equipment, how flexible the ticket is, penalties for changes, speedy boarding, allocated seats, airmiles payment and redemption, loyalty points, and the list goes on.

We were recently negotiating with a company to deliver some training. Their procurement department was trying to squeeze us on price (as is their job).

We knew if we started yielding on price, that would be the thin end of the wedge! So instead, we offered them a series of pre-prepared tradeables – online follow-up, certification, refresher webinars. So rather than saying “no” to a discount, tradeables enabled us to demonstrate flexibility and a willingness to work with them to arrive at a mutually benefiial agreement.

All too often people believe the other side has the power. We create negotiators who can shift the balance of power and take control of the negotiating process every time.

In part 2, I look at the purpose of the discussion phase and the key mistakes that are made there. You might also be interested to read my post Putting the salesperson back in the driving seat.

Become-a-Black Belt-Negotiator
Are you ready to become a Black Belt Negotiator?

 Watch our five top tips for negotiators video or find out more about our negotiation skills training on our website or better still join me at one of my seminars for the perfect opportunity to discover the secrets behind win-win negotiation and gain advantage over your competitors.

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