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2.3 Use a framework to guide you

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From your preparation in 2.1 you have a framework which tells you how many variables you have – how many items there are on which you can give and take. You have an idea of what are the most important items to you and to the other party.

Use your framework throughout the negotiation, to allow you to control the result. Here are some of the ways you can do this:

1 Focus early discussions on the variables you are more likely to agree on. This sets a constructive tone, but does not mean you agree on one or two items – see 4.5 ‘Don’t get salami-ed’.

case study I helped in a negotiation that involved providing consignment stocks of fans for a customer building air-conditioning units (consignment stocks are buffer stocks, usually held on a customer’s premises, but only invoiced when the customer draws the stock out). On the face of it, the variables on which we could give and take were the number of items, the quantity, the price and payment terms. The more we prepared, however, the more variables we identified – the period of the agreement, obsolete stock/write off arrangements, carriage, currency changes, insurance costs, ownership of goods, and how to control damage. We considered the value of each of these variables, and this allowed us to negotiate with confidence.

2 You have identified the most valuable variables. Use this framework to calculate the value of any concession that you might be about to make.

3 Use the framework to assess the cost of concessions on one variable with the cost of concessions in another area.

4 Use your framework to decide whether you will hold back discussion on any of your variables. In other words, hold back on one item and use it as one of your final cards when you are wanting to come together and agree.

5 When you negotiate, be prepared to use this framework to re-assess what variables are most important to your negotiating partner. Remember, you want to do repeat business with them.

6 Be ready to use your framework to assess the value of any new variable that crops up in the negotiating process.

Don’t leave your preparation at home! Build on your prepared framework throughout the negotiation.

Negotiating

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