What market research can you do to prepare for contract negotiations?

1 Identify your target market

Before you can negotiate effectively, you need to know who you are negotiating with. Your target market is the group of customers who are most likely to buy your products or services, and who have the characteristics that match your value proposition. You can use various methods to identify your target market, such as surveys, interviews, focus groups, online analytics, or secondary sources. The key is to segment your market based on relevant criteria, such as demographics, psychographics, behavior, or geography, and to select the segments that offer the most potential for your business.

3 Assess your competitors' strengths and weaknesses

Another important aspect of market research is to evaluate your competitors' strengths and weaknesses. This will help you identify your competitive advantage and differentiate your offer from the alternatives. You can use various techniques to assess your competitors' strengths and weaknesses, such as SWOT analysis, Porter's five forces, benchmarking, or mystery shopping. The aim is to determine their market share, positioning, pricing, quality, features, service, reputation, and customer satisfaction, and to compare them with your own.

4 Understand the market trends and drivers

In addition to your customers and competitors, you also need to understand the market trends and drivers that affect your industry and your contract negotiations. These are the external factors that influence the demand, supply, and pricing of your products or services, such as economic conditions, technological changes, social and cultural shifts, environmental issues, or legal and regulatory developments. You can use various sources to understand the market trends and drivers, such as industry reports, trade journals, news articles, or expert opinions. The purpose is to anticipate the opportunities and threats that may arise in the market and to adapt your offer accordingly.

5 Conduct a feasibility study

Finally, before you enter into contract negotiations, you need to conduct a feasibility study to evaluate the viability and profitability of your offer. This is a comprehensive analysis of the costs, benefits, risks, and returns of your project or proposal, based on the market research you have done. You can use different methods to conduct a feasibility study, such as cost-benefit analysis, break-even analysis, sensitivity analysis, or scenario analysis. The objective is to determine the best course of action for your business and to justify your offer to your potential customers.

Market research is a vital part of your negotiation preparation and planning, as it can help you understand your target market, analyze your customers' needs and wants, assess your competitors' strengths and weaknesses, understand the market trends and drivers, and conduct a feasibility study. By doing market research, you can increase your chances of reaching a win-win agreement with your potential customers and creating long-term value for your business.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?