How to Negotiate From a Disadvantage – Tips and Tricks
Let’s say that you have carefully assessed the balance or imbalance of power, and it turns out that you are at a disadvantage. Here’s the key to preparing: before you get to this point, you need to consider several alternatives. If there are alternatives and the situation becomes tense and the other party persists, then perhaps you could make some concessions. However, if you are smart and play your cards right, you will realize that you may not need to.
What message will you send to the negotiating table by conceding? How will they respond and how will it affect you?
When planning the structure of the negotiations, their are several questions you should take into consideration:
- How long do you think the negotiations will take?
- How will you manage your time?
- How will you manage their time?
- What should you expect they will argue at different stages of the negotiations and what will sway you?
- What can you do to start a negotiation from the best possible position at the table?
We will look at each of these points in detail, but first, a brief overview of the three key aspects of the negotiations.
To answer these questions, we need to look at two key concepts: BATNA and the preconditions. The party that has an advantage is likely to get a better deal because the alternative to leaving the agreement is always an option.
So before you enter into negotiations, you need to think about how to improve your BATNA (Best Alternative To a Negotiated Agreement) and weaken your counterpart’s BATNA. An example of a weakened counterpart to BATNA could be the offer of a differentiated exclusive SKU that increases dependence on you, the development of a marketing and communication strategy to differentiate yourself from your competitors, or the development of strong and close business relationships that generate synergies, efficiencies and simple ways of working that are not so easily replicated. Seed sowing in the other party’s head is therefore a prerequisite before negotiations take place. Examples of how to improve BATNAs could include aggressive action when a retailer threatens to stop shopping with you; hiring agency workers to renew a long-term contract with your main customer; and developing alternative distribution channels.
You should aim to make the other party important, make them feel that discounts are difficult to offer, and make them believe that there is more value in winning with little margin for cost, and highlight factors that strengthen or weaken your BATNA.
How long do you think the negotiations will take and how will you spend your time?
This is a relative factor, depending on the circumstances, but it can play a major role in the outcome of the negotiations, as it depends on many different elements. The other party may have less time to look for reliable alternatives and therefore have a weaker BATNA or they may have to make organizational changes to renegotiate the agreement. They are effectively obliged to reach an agreement with you and you are on the road to negotiation.
The best suggestion is to plan and prepare for numerous possibilities. Estimate how long the process will take and what approaches and strategies you will pursue in different stages of the negotiations. When will you be more open or under more pressure, when will the conversation be delayed, commit to creative solutions, etc. Set your process and think about what to do if things don’t go as you expected.
There has to be a point where it’s better to get a deal than not get the deal; this is referred to as your breaking point.
If the other party has an emotional investment in the business and relies on you to succeed, you should be willing to spend more time to reach an agreement. The less power you have over the other parties, the more concessions they will expect from you, ultimately making things more difficult for you. It is likely that if they do not agree with you and you have been flexible with them in the past, they will leave after finding a deadlock at the end of the process. If they decide not to do business anymore, it will irritate them, but they must emotionally invest in what you have achieved, and the longer they have to engage in a negotiation, the more likely they are to distance themselves from it.
Negotiations are about movement, and movement keeps things going in negotiations. Plan what you will do at different stages of the negotiations, and how will you drive them forward and keep the momentum going?
If the other side recognizes that you are ready to reach an agreement and you have made an effort, they will react and move forward.
The key question is when and how much to move, and there is no easy answer to that question. Economists answer, it depends on a range of options, such as tax increases, tax cuts, spending increases, or a change in the size of government.
In creative negotiations, where there are multiple variables and you have less power, you should be careful to take control of the negotiations and get the other party to vote for the alternative you have devised. If you generally disagree with proposals a, b or c, but state other alternative proposals, you are more inclined to frame the thinking of other parties and create the proposed framework. One side should move in decreasing quantities, because movement means that one has less freedom of movement and reaches a breaking point.
What do you want to achieve as a result of the conversation?
Before negotiating, take an honest assessment of your desired outcome(s). What do you want to achieve as a result of the conversation? In all likelihood, there will be several things you want to accomplish. List these out in order of importance.
Creating a list like this helps you to keep the negotiation on track. Focus on your most important priorities, and keep this at the center of the discussion. Be prepared to give up lesser-priorities to maintain your top goals.
You need to have a clear idea of where you want to start, how far you are willing to go, and a reasonable timeframe within which to control your movement. The way you communicate at the open and close of each meeting is also important here, so work out what you are going to say before you get to the point where you decide the number of meetings, the amount of communication or the duration between meetings.
In summary, one must always make a realistic assessment of power and be open to everything that one can offer. Before you make any proposals, there may be situations where there is not much room for maneuvering. When discussing your value, listen and focus on what your client is really asking for, but be honest about what you offer and what you can get in return.
Identifying the BATNA from both parties’ perspectives and working together in advance to strengthen your relationship will give you an advantage and help you implement a win-win strategy. Once you have made your assessment, prepare thoroughly and consider how to maximize your chances of getting the best deal. Do not assume that you will lose the battle, but consider what value your position has and how you can minimize the values you have had to concede. Determining your breaking-points helps you to set realistic limits.
Maintain a clear view of your process and timetable, as well as a clear understanding of the political situation in the region.
You can change the way you prepare and manage the negotiation process to make specific circumstances less relevant. Sometimes you cannot change your goals or circumstances, but if you introduce less flexibility and always think of making things difficult, you might think you want to consider a different approach. Define the opening and closing statements of your sessions, offer alternatives and outline when and how you will move.
This article has been published in accordance with Socialnomics’s disclosure policy.