Preparing for a negotiation is critical to success. Though not intended as a substitute for learning, preparing this checklist from Next Level Purchasing can steer your negotiation preparation for great results. Do you follow these steps?
- Identify the primary supplier to negotiate with.
- Identify your second-best option in case you cannot reach agreement with your primary supplier.
- Determine the format (i.e., face-to-face, phone, etc.) and location of your negotiation sessions.
- Invite the primary supplier to negotiate and learn who the supplier’s principal negotiator is.
- Ensure/insist that the supplier assigns a negotiator with decision-making authority.
- Assess your leverage over the supplier.
- Determine your overall negotiation strategy (e.g., hardball, collaborative, etc.).
- Identify all the terms that you will negotiate.
- Set targets and least-acceptable alternatives for each term.
- Determine your negotiation tactics (e.g. threatening to use another supplier, emphasising the benefits to the supplier of doing business with you, etc.).
- Decide what to concede, if necessary, to reach agreement.
- Develop a timeline for the negotiation process.
- Identify the risks to achieving your terms, timeline and other goals and plan to mitigate those
risks. - Develop and share internally a communications plan stating who must be updated on the negotiation progress and what information they must keep confidential.
- Review notes from previous negotiations, courses, etc. for tips for success.
- Anticipate your supplier’s reaction to each tactic.
- Create an agenda for the negotiation and practice it.
- Start the negotiation confidently.
- Document agreements reached and share this with the supplier throughout the negotiation process to ensure that no misunderstandings later derail a negotiation in which you have invested a great deal of time.
- Self-assess after each negotiation session and adjust strategy and tactics if necessary.
- At the end of the negotiation, encourage the supplier to feel positive about the new relationship rather than feel like they lost the negotiation.