How to Prepare for a Negotiation

By RED BEAR July 11, 2024 | 7 min read
How to Prepare for a Negotiation
7:50

Successful negotiations are rarely the result of chance or innate talent. They are, more often than not, the product of meticulous preparation and strategic planning.

At RED BEAR Negotiation, we understand that preparation is the cornerstone of effective negotiation—after all, our methodology has been trusted by over 45% of Fortune 500 companies. 

In this helpful guide, we'll walk you through the essential steps to prepare for a negotiation, ensuring you enter any discussion with confidence and a clear strategy.

Information Gathering

The foundation of any successful negotiation process lies in thorough information gathering. This process can be broken down into two crucial phases:

Research Phase: Gathering Objective Information

This phase involves collecting factual data, market trends, and relevant statistics. You should:

  • Analyze industry benchmarks and standards
  • Review historical data from similar negotiations
  • Gather information about the other party's business, goals, and constraints
  • Compile relevant financial data and projections

Anticipation Phase: Subjective Preparation and Perspective-Taking

In this phase, you put yourself in the other party's shoes. Consider:

  • What are their likely objectives and priorities?
  • What pressures or constraints might they be facing?
  • How might they perceive your position and offers?
  • What questions or objections are they likely to raise?

By engaging in both objective research and subjective anticipation, you'll be better equipped to navigate the complexities of the negotiation process.

Develop a Robust Action Plan

With your information gathered, it's time to craft a comprehensive action plan. This should include:

Crafting a Negotiation Summary

Create a concise overview of your objectives, key points, and desired outcomes. This summary will serve as your quick reference guide during the negotiation.

Defining Target Terms and Offers

Clearly outline your ideal terms and the offers you're willing to make. Be sure to include your range of reason—essentially the spectrum of acceptable values for this specific deal. You should also include alternate negotiables here, including value adds that aren’t directly related to cost.

Creating a Positioning Statement

Develop a compelling narrative that highlights the value you bring to the table. This statement should articulate why your proposal is beneficial for both parties. During this part of the process, you should also consider any factors that could work for or against you and prepare for those to be brought up during conversations.

Identifying Customer or Supplier Wants and Needs

Go beyond surface-level demands to understand the underlying needs and motivations of the other party. This insight will be crucial in finding mutually beneficial solutions. 

Companies who choose to elevate their sales or procurement team’s negotiation skills with RED BEAR Negotiation training receive our proprietary Negotiation Planner to standardize the planning process across departments—a huge benefit for companies needing an upgraded negotiation process.

Selling-Value-Not-Price

Conduct a Thorough Negotiation Analysis

A detailed analysis of the negotiation landscape will help you navigate potential challenges and give you informational and planning power. Here are a few best practices:

Detail Specific Negotiation Elements

Break down the negotiation into its component parts. Identify key issues, potential areas of agreement, and possible points of contention.

Prepare Responses to Difficult Questions

Anticipate challenging questions or objections and prepare well-reasoned responses. This preparation will help you maintain composure during tough moments.

Align with Organizational Goals and Strategies

Ensure your negotiation strategy aligns with your organization's broader objectives and values. This alignment will guide your decision-making throughout the process.

Best Practices Review 2024

Build an Effective Concessions Strategy

Concessions are an inevitable part of most negotiations. A well-planned concessions strategy is critical for maintaining control and achieving favorable outcomes for your organization. Planning your approach in advance helps you make strategic trades rather than reactive compromises.

Identifying Possible Negotiables

List all the elements that could potentially be part of a trade or concession. This might include price, delivery terms, contract length, or additional services. “Elegant negotiables" are a type of alternate negotiable that cost you little but are highly valuable to the other party. They are considered the "magic" in negotiations, as they allow you to satisfy the other party's needs creatively while minimizing your own concessions.

Understanding Your Underlying Needs

Clearly define your non-negotiable needs versus your "nice-to-haves." This clarity will help you make informed decisions during the negotiation.

Anticipating the Other Party's Negotiables

Consider what the other party might be willing to concede. This insight can help you propose mutually beneficial trades.

Manage Information Skillfully

Information is power in negotiations. Skillfully managing information is one of the six principles of negotiation, which highlights its importance as part of the preparation process. If you prepare properly, as we’ve discussed here, you’ll have a wealth of information available to you at any point during negotiations. Simply having the information isn’t enough—you need to know how to manage it to your advantage.

Develop a strategy for managing information effectively by:

Gathering and Organizing Relevant Data

Compile all pertinent information in an easily accessible format. This might include market data, previous agreements, or competitor information.

Developing a Strategy for Sharing and Withholding

Decide in advance what information you're willing to share and what you'll keep confidential. Strategic disclosure can be a powerful tool in negotiations.

Preparing for Various Information Scenarios

Consider how you'll respond if the other party reveals unexpected information or if they're unwilling to share key details.

Anticipate Different Negotiation Scenarios

Preparation means being ready for various outcomes. To prepare for any eventuality, you should identify potential obstacles and challenges that could arise and brainstorm strategies to overcome them.

Further, it’s a good idea to develop alternative strategies and backup plans. Have multiple approaches ready, and if your initial strategy doesn’t work, you can smoothly transition to an alternative. 

While you can't predict everything, mental preparation for surprises will help you remain calm and focused.

Effective Negotiation Preparation with RED BEAR

Thorough preparation is the key to negotiation success. By following these steps—from information gathering and action planning to negotiation analysis and a concessions strategy—you'll be well-equipped to navigate even the most challenging negotiations.

At RED BEAR Negotiation, we specialize in transforming teams into world-class negotiators. Our comprehensive training programs for sales and procurement professionals can take your negotiation skills to the next level.

Ready to elevate your negotiation game? Contact RED BEAR today to learn more about our negotiation training programs and how we can help you achieve consistent, profitable outcomes in your negotiations.

Fill out our contact form and we will be back to you in no later than one business day.

 

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