How To Understand the Counterparty During Negotiations
During negotiations, an understanding of your counterparty will make it easier to find common ground and identify helpful tradeoffs. Asking the right questions and performing careful research can help you enter negotiations with a better grasp of the counterparty's situation and priorities. The following are some strategies for doing just that.
Research Their Priorities
Your counterparty will have unique priorities. Doing research before negotiations begin can help you understand those priorities. The following moves are useful here:
Looking at social media. A business's social media presence often provides insight into how they interact with others and what they value.
Asking people in your network. Does anyone in your network have experience dealing with the counterparty? If so, they may be able to reveal what makes their company tick.
Researching their industry. Know what the current pain points and opportunities are for businesses in the counterparty's sector. For instance, an automaker facing a parts shortage may become more agreeable if you put expedited parts delivery on the table.
Don't Make Cultural Assumptions
Even though your counterparty's cultural background may influence how they approach negotiations, it's important not to assume that someone from a given background will automatically negotiate in a particular way. Instead, try to learn about the person you'll be negotiating with by looking at their career history, consulting with your network, and having pre-negotiation conversations with the counterparty.
Ask the Right Questions
Research can go a long way, but it may not reveal everything. To learn more, it's advisable to ask questions to learn more about their situation. Frame these questions in ways that let the counterparty express their financial needs and other expectations, and offer chances for them to elaborate on the challenges of their present circumstances.
Know Their Backup Plan
To reach an agreement, you'll need to go beyond just meeting the other party's requirements. You'll also need to present an offer that beats whatever their backup plan is, and to do that, it's necessary to figure out what their alternative move is.
To assess the other party's contingency plan, it may be helpful to make a list of what you think their other moves might be, then pick the move you think they're most likely to choose. Then, you can develop offers of your own to help you beat that alternative move. For instance, if their backup plan is to go to a vendor charging cheaper prices, perhaps you can come up with a bulk-purchase discount plan to offset the price difference.
Present a Good Draft Contract
Presenting a high-quality contract — even if it's just a preliminary outline — can open the door to a healthy discussion about you and your counterparty's priorities. Having it in writing lends an air of officiality and gives you both something to reference. Make sure your efforts aren't hampered by formatting errors; convert from JPG to PDF to make any last minute adjustments.
Getting to Know the Other Party
By researching, asking the right questions, knowing the other party's backup plan, and getting a high-quality contract on the table, you can start to understand the other party. That, in turn, will help you move toward an agreeable deal — and hopefully a long, productive business relationship.
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