Tuesday, 16 December 2014

The 5 Stages of Negotiation Success

If you want to enhance your capability and confidence as a negotiator, it is vital to understand that most negotiations go through five distinct stages.  These five stages are:

Step 1: Planning and Preparing
Far too many negotiators fail to plan and prepare correctly!  This vitally important step is often badly overlooked as the negotiators are too keen to get stuck into the action!  Effective planning and preparation is the hallmark of the professional negotiator.  If you do not plan and prepare properly you can only react to what happens in the negotiation rather than leading and controlling it.

Step 2: Discussing and/or arguing
Depending upon the subject and the people involved, this stage can be a relatively calm discussion or a raging argument - or something in between.  Whatever the nature of the conversation taking place, the purpose of this stage of the negotiation is to review the issue(s) and to exchange information. It is good practice to make every possible effort to understand the other party’s point of view and to make sure that they understand yours. 

Step 3: Signalling & Proposing
Each negotiation that you become involved in will have two possible solutions – one that meets all of your needs and one that meets all of the other party’s needs.  In reality the final agreement usually falls somewhere in between these two ideal solutions.  Therefore as a negotiator you need to be on the lookout for signals, or signs of willingness from the other party to consider movement. 

Signals are usually followed by proposals.  A proposal is a suggested action, approach or process that one party in a negotiation makes to the other party.  Proposals advance negotiations.  Without them not a lot happens! 

Step 4: Bargaining
This stage of the negotiation is characterised by the two parties trading with each other.  Variable items are traded so that each party can achieve their objectives.  The key to effective bargaining is giving to get.  Never make a concession without getting something of equal or greater value in return. No freebies!

Step 5: Closing & Agreeing
Closing is when agreement to proceed is reached.  At this stage you have a deal! 

The most important stage in the entire negotiation process is Step 1: Planning and Preparing.  Up to 90% of your success as a negotiator is related to the quality of the planning and preparation that you do in advance of the negotiation.

Here are some of the vital elements that a professional negotiator will include in their planning and preparation:

Objectives:  What specifically do you want to achieve and how will you measure your success?  Make sure you write your objective down as this will make them more concrete.  Unclear objectives will usually lead to poor results.

It is also vitally important to consider the objectives that the other party may have and then check these are correct during the discussion stage.  Get out of your head and into their head!

Negotiation parameters: As most negotiations will fall somewhere in between the ideal outcome of both parties, it is important to consider the range within which a deal is possible.  Define your ideal outcome (your “Like”), a realistic outcome based upon your knowledge to date (your “Intend”) and finally your walk away point (your “Must).  Then consider the likely range of the other party.  If you cannot secure your “Must” then you must walk away.  Not all deals are worth doing.

Negotiable areas: What are the elements that the negotiation will be orientated around e.g. contract length, specification etc?  List areas that are important to you and those that you anticipate are important to the other party.  During the negotiation you will attempt to get some of what you want by trading something they want in return.  Work out what each concession will cost you so that you can make sure that you always get something of equal or greater value in return.

Although we could go into the subject of negotiation planning and preparation in much greater depth, if you commit to always considering these vital areas then your confidence will increase and this will enable you to negotiate far more profitable deals.

Good luck and good negotiating!

Simon Hazeldine MSc FinstSMM is an international speaker and consultant in the areas of sales, negotiation, performance leadership and applied neuroscience.

He is the bestselling author of five business books:
  • Neuro-Sell: How Neuroscience Can Power Your Sales Success
  • Bare Knuckle Selling
  • Bare Knuckle Negotiating
  • Bare Knuckle Customer Service
  • The Inner Winner

To learn more about Simon's keynote speeches and other services please visit:www.simonhazeldine.com

To subscribe to Simon's hard hitting "Selling and Negotiating Power Tips newsletter please visit:www.SellingAndNegotiatingPowerTips.com

To subscribe to Simon's "Neuro-Sell" newsletter please visit:www.neuro-sell.com

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