No doubt you will have entered some negotiations and you find yourself giving away much more than you had intended to, and ended up in a lose/win situation, where the disadvantages of your position far outweigh the benefits you have gained.
How do you feel when this happens?
Probably a little frustrated that you allowed yourself to go too far in the negotiation.
You know you should have stopped but needed the sale so much, it covered over the need to be decisive in the discussions.
So, how can you know when to stop negotiating?
Here are some tips.
Firstly, Plan Your LIMits
Your limits are your planned parameters that you will not exceed.
It’s an acronym that first of all looks at what you would LIKE to get (Your best position) followed by what you INTEND to get (your fall-back position) and then your MUST position (where you must not go beyond).
Your negotiating party will have their LIMits as well.
If there are cross-over points (positions that are between your and their positions, then you have an AoN (area of negotiation) where you could meet and agree positions.
If there are no cross-over points (e.g. where your MUST position is lower than their LIKE position) then that’s the time you need to create a BATNA.
A BATNA is known as the ‘best alternative to a negotiated position’.
Let’s imagine you have bought a car and are now looking at insurance.
The range of prices baffles you, as it’s the same cover for your car.
But is it the same?
Further digging reveals that the more expensive insurance offers things that may give you more peace of mind, like replacement vehicle if yours is off the road, or breakdown service included.
The price of the one you choose may have been higher than you had originally decided was you highest limit, but the overall benefits outweigh the price you feel you wanted to pay.
It was the best alternative to the agreed price you had set yourself.
Look At Interests Rather Than Positions
The positions you and the other person have set yourself may not allow either of you to gain very much.
So should you just walk away?
Well, try one thing before you do.
Analyse the interests of both parties.
For instance, if you are right at the end of the month and one more sale would help you to achieve bonus, that sale becomes more valuable to you than the buyer.
You may even give more away on your position than you intended to, because your interests are better served that way.
Similarly, the buyer may need to buy your product because they have a contract that must be fulfilled immediately and you have the answer to their problems.
Their interests far outweigh the position they would normally take in a negotiation.
So identify what the cause is of the position your negotiation partner is taking before you make assumptions as to what you will do.
Negotiations are a to-and-fro of cut-and-thrust between you and someone with a different agenda to you.
You want higher profits, they want lowest price.
You want greater productivity, they want superior quality.
Before you decide on what to agree on, make sure you have set your limits and agreed on what the interests of both parties are.
If you find you cannot meet after you have uncovered and discussed to the best of your ability, it may be time to stop negotiating.