Posted by Daniel Coates on Tue, Mar 16, 2010 @ 10:50 AM
By Dawn Wilson
I recently attended a negotiations seminar at a PCMA Conference. If there is any one session that I, as a seasoned sales person should have taken years ago – this was it. This was a thought provoking and interesting day long session. The wonderful part of this is that I now have real tools to help me decide and evaluate each negotiation differently and more effectively. This can be applied to all areas of my life and the second part of the session that covered the psychology of the subject matter was just as thought provoking. Consider this: Gut instinct is not a replacement for strategy – reflect on your own personal strategies with this statement in mind. There are a couple of things you need to figure out in any deal – you must know what is the number you cannot go below (as a buyer or seller) and you must know how to find out what is your bottom line.
- Figure out your BATNA (Best Alternative to a negotiated agreement).Your BATNA is the course of action you will pursue in the event of “no deal”
- Determine your Reservation Value – the point at which you are indifferent between accepting the deal and walking away. A BATNA analysis helps you determine your reservation value.
- Evaluate the ZOPA – Zone of Possible Agreement – the space/difference between the seller’s reservation value and the buyer’s reservation value.
Here are some things to consider in any negotiation: Information is King. What you learn depends on what you are
willing to learn. Always negotiate about the value you bring to the buyer. Prepare in advance to answer the toughest questions that you may be asked in the negotiation – this helps avoid lying, helps you not give up too much information; and helps you reclaim control. My next blog will be talking about more negotiating – should you make the first offer and how to effectively anchor to set the tone of your negotiation.