Do Your Research Before Negotiation
Many of us negotiate as parts of our jobs. Here are Get-It-Done Guy’s effective tips for how to prep your negotiation and improve your chances for success.
It doesn’t matter how skilled you are, how much you have to offer, or the results you deliver; you’ll never benefit from any of it if you aren’t a good negotiator. Good negotiators do research before they begin the negotiation.
Now that her business is going like gang-busters, my pal Bernice has decided to return her attention to her wedding. Specifically, the cake. She wants a sheet cake that feeds 250 people, featuring a complete replica of A Sunday Afternoon on the Island of La Grande Jatteopens IMAGE file by Georges Seurat done entirely in buttercream frosting. By hand. Dot by dot.
She’s found a baker who’s an artist. His name is Louis, and everybody loves him. He’s pleasant, he’s fair, and he’s generous. But he’s not quite generous enough to agree to Bernice’s terms. He wants $2,500. She’s prepared to offer $150. Even as I speak, she’s rolling up her sleeves to enter the negotiation.
With this much disparity between the offers, I doubt they’ll reach agreement. Yes, she’s on a tight budget, but Bernice has unrealistic expectations for price. If she doesn’t want to be laughed out of the room the moment she makes her offer, she needs to do her background research. Fortunately, she knows that.
Understand the Other Side
The more Bernice knows about what’s going on in Louis’s mind, the better she’ll be able to reach an agreement that works for both of them. In an ideal world, she would do a Vulcan mind-meld with Louis, and know his negotiating position perfectly. Unfortunately, she isn’t a Vulcan, and this isn’t a perfect world.
Before negotiating, it makes sense to use the internet for something other than posting pictures of food on your news stream (why do people do that?). Google the other person’s name, their company name, and their industry. Spend some time reading up on any news, hobbies, transactions, takeovers, personal triumphs, and/or profiles that might help you understand the person you’re negotiating with.
Bernice’s quick Google search found an interview in which Louis was discussing opening his new bakery. In it, he says “It’s plain, and we don’t have much money for fixing it up yet, but I’m hoping it’ll bring in the dough.” Hmm…interesting…Louis likes puns. Hazmat suits will be necessary.
Learn Their Point of View
You can also talk to someone else in the same industry to get an insider’s take on what will be important in a negotiation. Bakeries are regional, so Bernice called a bakery in a nearby town and asked to speak to the owner. She said, quite frankly, “I’m about to negotiate for my wedding cake. I know I can’t pay what he’s asking, and I want to understand what’s important to a baker so I can find a way to pay in other ways. Would you be willing to tell me about what it’s like to run your business, and what kind of things are important to you as a baker?”
The first three bakers she called said, “No, I’m too busy running my bakery.” But the fourth agreed to talk.
Now the only question was what to ask!
Ask About Their Criteria
People take different things into account when making decisions. Every person is different, but there are patterns. Bernice asked, “What are the main factors you consider when setting prices?”
The baker promptly replied, “I have to stay profitable, of course. I charge more depending on how complicated the job is, and I give a discount when people buy my day-old bread. And sometimes I offer freebies to long-time customers.”
There’s no guarantee that Louis has the same policies, but by asking a few different bakers, Bernice found that complexity and loyalty are two major pricing factors.
Understand Their Hidden Currencies
You also want to understand any hidden currencies they have. What do they value highly that you can easily provide? I have negotiated extreme price cuts in exchange for helping someone with a business school application. Some currencies are individual, like the b-school application, but some can be common to the profession. By chatting with several bakers, Bernice came to understand that they have to get up very early, and some of them aren’t naturally morning people. Hmm…
This gave Bernice enough information to go into her negotiation with Louis better prepared. The big meeting finally arrived.
During the negotiation, Bernice took the time to get to know Louis better. She discovered that he is, indeed, a morning person, he loves his loyal customers, and he enjoys city living, but still pines for the countryside.
With this information, she and Louis reached an agreement. She understands that a complex commission takes up a lot of any baker’s time, so she’s come up on the price she’s willing to pay. But she also used the currencies she discovered in her research. She’s going to give Louis a number of plants to keep in his store so he has a feeling of countryside, and she’s promised to order her company’s daily cupcake order from Louis as a way of becoming a loyal customer. Louis accepted the gesture, and the plants, and has come down from his asking price.
Choose Someone in a Different Area
Do your research and you can bring much more to a negotiation than you may have thought possible. If your negotiating counter-party is willing to talk directly, talk to them. But if not, you can talk to people in their same business, but who are in a different geographic region and aren’t direct competitors.
Every negotiation goes better if you take the time to understand the other side’s criteria, the general issues of their business, and the issues they have in particular. You’ll be able to go beyond mere agreement to find ways where everyone gets more than they want.
I’m Stever Robbins. Want to save the world? I mentor people who play—or want to play—a big game. If you want to know more, visit Visit the website SteverRobbins.
Work Less, Do More, and have a Great Life!
Baker and Cake Decorator images from Shutterstock
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About the Author
Stever Robbins was the host of the podcast Get-it-Done Guy from 2007 to 2019. He is a graduate of W. Edward Deming’s Total Quality Management training program and a Certified Master Trainer Elite of NLP. He holds an MBA from the Harvard Business School and a BS in Computer Sciences from MIT.
