CHAPTER 21
Determine Your Goals, Value, and Walk-Away Point
The fellow who says he’ll meet you halfway usually thinks he’s standing on the dividing line.
We negotiate every day in our personal lives and at work: interpersonal disagreements, project or delivery deadlines, travel and vacation packages, discounts on damaged goods, mortgage or rent rates, salary increases, job responsibilities, and household duties. Many such negotiations are routine and don’t require much strategic thinking. Others demand serious forethought because the outcome may lock you into consequences for a long time. When the stakes matter, do your prep before any serious discussions begin.
Step 1: Identify your primary, long-term goal. Are you trying to set up a strategic partnership with organization A to distribute all your products? Do you want authorization to increase head count in your department by three during the next year? Do you want the company to pay for a three-month sabbatical while you finish an off-site training program?
As you identify your primary, long-term goal, you may notice that some goals are easy to measure (increase price by 15 percent over the next two years) while others are more nebulous (improve customer satisfaction). With difficult-to-measure goals, it helps to set ranges: What’s the best outcome you can hope to achieve? What’s the least improvement in your situation that you’ll consider a success?
Step 2: Identify your immediate goal. Before you can accomplish your long-term goal, make sure you can get to first base. Determine any interim steps. Be as specific as possible. If your goal is to snag the XYZ organization as a regular client for all your health-care supplies, an interim goal might be to get at least an order for one of your health-care product lines.
Step 3: Identify your nice-to-have goals. Consider other things you plan to ask for during your negotiation that would be of value to you. Often, the other party is pleased to trade away things that have little or no value to them. However, remember that, as you request these things, the other party—if they are a skilled negotiator—will keep track of them and ask for trades in return.
Step 4: Determine the value of what you can offer. Make a list of things (tangibles and intangibles) that may or may not have much value to you but that the other party may consider very valuable. Of course, you will have to research the other party to determine what they might value. (Examples: personal time with executives, faster delivery time, better guarantee, customized feature, no upfront payment requirement, final report on your work.) Be ready to offer these “concessions” in kind for valuable concessions you want from the other party.
Step 5: Decide on your walk-away point. Never enter a negotiation feeling as though you must come to agreement. If you do, you lose. Negotiating from a position of desperation only leads into a sinkhole. Before you open your mouth, know what you consider acceptable terms. When the discussion moves beyond that point, be comfortable with walking away until another day—or another opportunity comes along.
Consider this example of the five steps. Let’s say your company wants to hire a consulting firm to “create a communication plan” for an upcoming conference for your prospects flying in from around the world to hear updates on your newest products and services. The consulting firm will need to prepare and train all your subject-matter experts to design and deliver their various keynotes and breakout sessions for your three-day marketing conference.
Step 1: Identify your primary, long-term goal.
— Have our industry experts deliver excellent content in an engaging way at our annual three-day lead-generating marketing conference.
Step 2: Identify your immediate goal.
— Contract with the most qualified communication consulting firm to help our speakers design, prepare, and deliver their keynotes and breakout sessions in a variety of formats and styles to create a unique learning and sales experience for conference attendees.
— Get the consulting firm to assign the most qualified consultants to our project.
Step 3: Identify your nice-to-have goals.
— Negotiate a reasonable price.
— Ask that the firm’s principal consultants be assigned to our project.
— Ask the firm to survey our prospects before the project begins.
Step 4: Determine the value of what you can offer.
— Be flexible on conference dates and training dates for the subject-matter experts (which allows them to schedule work in their off-peak season).
— Have our own staff handle admin at our own venue, which eliminates many of the coordination details the consultants typically must handle (saving them 10 to 15 admin hours).
Step 5: Decide on your walk-away point.
— The maximum budget for the entire project is $75,000.
— Our staff must approve the consultants assigned.
Planning may not take much paperwork—but it does take thought.
Failure to do prep work leads to disappointing discussions. A little forethought can make all the difference in successful negotiations.