Preparation is often the greatest determinant of negotiation success.
Across negotiation studies and surveys, sellers who get the best outcomes:
- Know what they sell
- Research buyer wants and needs through sources other than the buyer
- Have a keen understanding of the buyer’s day-to-day life and concerns
- Prepare for each negotiation with trades, counteroffers, and knowledge of their walk-away points
Sellers who fail to plan often get taken advantage of.
Don’t enter a negotiation unprepared, expecting to improvise. Knowledge is your source of power. It gives you the confidence and information you need to be successful.
Meanwhile, lack of knowledge introduces doubt on both sides of the negotiation table, which can lead to failed negotiations and lost sales.
Doing your research helps you anticipate many aspects of any negotiation, so you can eliminate doubt and, instead, drive toward strong agreements.
7 Categories for a Sales Negotiation Checklist
The best negotiation plan helps you expand the pie, build confidence, and handle challenges and issues that arise along the way, leading to a successful agreement for both you and your buyer.
Why don’t more sellers plan? Many just don’t know the elements of good planning.
To help you in your next negotiation, and every one that follows, we’ve identified 7 elements essential for preparation. We’re also providing specific actions to complete in each area before you enter any sales negotiation.
Use this checklist to feel more prepared for any negotiation.
7 Elements of a Successful Sales Negotiation
Pay attention to each of these elements to prepare for any negotiation. Ask yourself, “Have I…” before each critical action and use these questions as your preparation checklist.
In any negotiation, the first step is to determine who you’re working with. Every company is different, and you can’t expect to interact with one buyer the same way you would with another.
Download our complimentary toolkit, Mastering Sales Negotiations, to discover our tips for communicating and negotiating with different personalities.
Here, the essence of good planning comes down to the following questions:
- Mapped the other party’s team?
- Determined their dominant personas (i.e., who may be skeptical or a good collaborator)?
- Learned who has decision-making authority?
- Quantified my relationship strength with each team member?
- Determined whether their negotiation approach is primarily positional, partner, or mixed-motive?
- Action Plan
To achieve favorable outcomes, sellers must lead the negotiation. Proper planning allows you to answer critical questions that will guide the negotiation.
Think of it like this: if the buyer plans and you don’t, who is likely to have a better outcome? If the buyer plans and the seller doesn’t, can the seller even lead?
Planning is essential to changing your negotiation disposition from reactive to proactive. Take charge of the negotiation process from start to finish, design what the dance should look like when it’s done, and architect how it will open, evolve, and close.
To make sure you have an action plan in place, ask yourself:
- Identified the desired outcome for the next meeting?
- Set the agenda beforehand?
- Chosen the meeting venue?
- Defined an opening strategy?
- Assigned next steps and research to complete?
- Power and Leverage
Power and leverage are functions of your value proposition. Your value proposition is the collection of reasons why a buyer wants to buy in general, and from you in particular. It should be a combination of:
- Understanding the importance of the buyer’s issue (how you resonate)
- Demonstrating the difficulty of substitution (how you differentiate from the competition and how you substantiate your messages and build trust)
Answering these “hows” defines the amount of power and leverage you have in a negotiation. This will impact the fees you charge, the deals you win, and the customer loyalty you build.
To ensure you’re positioned effectively, answer these questions:
- Established sources of power and leverage for both sides?
- Planned steps I can take to increase my leverage?
- Considered steps the buyer might take to increase their leverage?
- Buyer Tactics and Objections
In a negotiation, you’re almost guaranteed to hear an objection from your buyer. Experienced buyers may even come prepared with specific tactics to get what they want.
Click here for a list of 16 common negotiation tactics buyers use (and how to respond).
When preparing for this stage in the negotiation, ask yourself:
- Identified potential buyer tactics and objections?
- Chosen my response strategies?
- Objectives, Requirements, and Possibilities
Objectives are aspirations or desired outcomes—the things either party wants or needs. The more important the objectives, the more incentive there is to come to an agreement. Uncovering the other party’s objectives is critical. Objectives are often the underpinnings of the positions a buyer might take during negotiation.
Requirements are the box you’re expected to play in, or the guidelines shaping whether or not you’re a good fit for the buyer. Uncover the reasons behind the requirements, and you’ll know whether you can or can’t meet, or alter, the requirements.
Together, objectives and requirements form the “what.” They describe what we’re trying to get done (objectives) and what we need to get done (requirements) to move forward.
In negotiations, there are many options for getting something done. The possibilities range from completely different solutions to different components of similar solutions. Collaborative brainstorming, idea generation, and creativity help create possibilities that drive value for both sides and expand the pie.
Prepare for buyer questions in each of these areas by asking yourself:
- Fully defined objectives and requirements for both sides?
- Brainstormed ideas and possibilities for reaching an agreement?
- Prepared to facilitate a creative process to find mutually agreeable possibilities that maximize value on each side?
- Compiled a list of possible asks and trades with defined values for each?
- Prepared to respond to requests with trades (“If you...then I. If I…then you.”)?
- Agreement and Alternatives
Alternatives are critical for understanding the concept of leverage. If you can easily get what you want someplace else, you have leverage. If you can't, if your alternatives aren't desirable, then your leverage is limited.
Together, possibilities and alternatives represent the “how;" how both sides can reach their objectives and satisfy their requirements.
Knowing your BATNA (Best Alternative to A Negotiated Agreement) is critical in a negotiation. If you don't know it, you may accept an agreement that's not in your interest. Sales Negotiation Rule #1 is “Always Be Willing to Walk.” If you know your BATNA, you know when to walk and when to stay and accept an agreement.
Think of your BATNA as your “Plan B.” To avoid agreeing to something worse than your BATNA or rejecting something that’s better, you must figure out your Plan B before you begin negotiating.
To do so, make sure you can answer “yes” to the following questions:
- Outlined the key points of the agreement as it stands?
- Listed current and possible buyer counteroffers and asks?
- Worked out my BATNA and its value to me?
- Reminded myself that walking is always an option by focusing on my BATNA?
- Determined my reservation price?
- Determined my ideal agreement?
- Analyzed the buyer’s BATNA and its value to them?
- Surmised their ideal agreement?
Emotions in negotiations require attention, but many people overlook them. Regulating your emotions and your counterpart’s emotions helps to make better agreements (for both parties).
Deal with emotions the right way and you’ll maximize the chance of a good negotiated outcome. To do so, ask yourself:
- Anticipated buyer actions that may trigger strong emotions and planned how to manage my reactions?
- Developed ways to make the buyer feel connected, engaged, respected, and valued?
Whether you use our negotiation planning checklist or your own, make sure you address the questions in each of these seven areas. You’ll be in the best position to win the negotiation and close deals with the most favorable terms.