One of, if not, THE best negotiating tool to secure and protect your margins
Andrew Bailey MBA Pricing and Negotiation specialist
From FEAR to CONFIDENCE - Price Negotiating through the only specialist Price Negotiation Programme - Win More Deals, More Often at Higher Prices
To secure and protect margins in negotiations you need to plan if, what and how you will trade value to your counterpart.
And what value you are going to request in return.
Remembering the rule "never to give something away without getting something of value in return".
To make sure you apply this piece of timeless advice you need to do some preparation.
You need to identify all the variables around which you and the other party can negotiate.
Variables are the areas of interest, concern, or disagreement between the parties involved in the negotiation. The variables help to capture all the issues that are likely to affect the deal
They will significantly impact the outcome of the negotiation and directly impact the total value of the deal and agreement.
These could be price, volume, payment terms, delivery, service, warranty, product specifications and so on and so on .In fact for most deals there are a whole range of variables you can deal in.
Once you have identified all the variables you can begin to divide them into groups - those that are high or low value to you, high or low cost to you and similar for the other party.
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Now when you are in the negotiation and you want something from the other side, or are prepared to trade some value, you will know exactly what to ask for and what you could give. Ensuring that what you trade is not value destructive and is a collaborative outcome for you both.
At the very least it will give you the confidence to know that for any request you will have some value elements you can ask for in return. Which will manage the other side's expectations in the negotiation and ensure you do not lose value in the deal.
Of course you have to do the preparation in advance and have that prep with you at all times.
Here's a summary of your key actions;
I've wrapped up all these principles and actions into a tool - Negotiation Variables Value Mapper to help you think this process through.
Once you have completed the Mapper you'll be able to use it (with some tweaks) for other deals.
Keep your Mapper with you at all times and you'll reduce the chances of losing value in your deals - in fact you're more likely to grow value.
If you'd like more details of the Negotiation Variables Value Mapper just DM me or drop o comment on the post.