Understanding your own business is only half the battle in the negotiation process. No matter how well you know your own position, you'll be hard pressed to make any headway or seal a good deal without an in-depth understanding of the counterparty.
Having a keen understanding of the counterparty lets you discover the place of mutual benefit, uncover the vendor's main points of interest, and help you identify how valuable your business is to them.
Communication is the key to any good relationship, even in business. It's especially important when there's a new contract on the table, as communication directly impacts the quality of your negotiation. Furthermore, you'll never know your vendor's genuine thoughts, wants, and ideas unless you encourage conversation.
Without communicating with your counterparty, it's difficult to build trust with your potential new supplier. Every agreement is based on trust, so open up the conversation to ensure both parties can be truthful about any concerns.
Additionally, however, it's important to realize that during the process of communication, the counterparty will also be assessing your stance. Remember to remain precise and confident in your speech.
Doing your research is a foolproof way to achieve a better understanding of your counterparty.
Researching your new potential vendor will give you insight into their high-value negotiables and what your business can offer them. Being able to see your firm's proposal through the eyes of the vendor enables you to strengthen your negotiation by improving your value creation in the counterparty's eyes.
A great way of researching your vendor and understanding their thought process is to repeat the contract negotiations planning process as if you were the vendor.
Preplanning the questions to ask your vendor will instantly increase your chances of making a good deal and can unveil hidden valuable information.
Negotiators are often reluctant to ask questions out of fear of rejection and spend more time arguing or defending their position. However, gaining insight from your counterparty's point of view will actually strengthen your position.
Some of the best questions to ask at the negotiation table include:
Can you explain the reasons behind your position?
What do you think I need to know about your company?
What parts of my proposal concern you most?
Why is that such an important provision?
Understanding the mindset of your counterparty is fundamental to the success of your negotiation. However, without a well-presented contract, your new potential vendor is unlikely to take your proposal seriously.
Having a well-designed, detailed, cohesive and streamlined contract to present will increase your chances of successful negotiation and ensure the counterparty takes you seriously. One top tip for a well-presented negotiation contract is to convert the document from a JPG to PDF, as PDF documents appear more slick and professional.
Improving your understanding of the counterparty is just one way of bettering your negotiation tactics.
If you'd like to learn more about how to refine your negotiation skills, join your local chamber of commerce today.
This Hot Deal is promoted by Hartland Area Chamber of Commerce.