Do you often feel your negotiations leave value on the table? If so, you’re not alone.
Many managers frequently underestimate the range of reason and throttle their high aspirations to avoid the fear of being perceived as too unreasonable or ostentatious. These feelings can constrain your goals, impose limits on your perceived value, and ultimately take you further away from your best-case scenario.
Setting and meeting high expectations in real-time dynamic negotiations might seem tricky, but there’s a science to it. Skilled negotiators can nudge negotiations towards their target price by paving the way for a more efficient and straightforward discussion.
Simply put, those who ask will typically get more. Those who don’t, don’t.
The range of reason is the range of price and value that is reasonably entertained by the buyer and seller. Something outside this range of reason is where the other party just cannot see the possibility of the deal getting made.
For example, if the general market rate for 1,000 widgets is around $600 to $1,200, offering $10,000 (as a seller) or $0.50 (as a buyer) is well outside the range of reason. Offering $1,500 (as a seller) or $400 (as a buyer), however, might be outside the general market assumption but not necessarily outside the range of reason, especially if this number can be supported by flexibility in other aspects such as payment terms (net 30 instead of net 90), commitments, and delivery.
Ultimately, setting high aspirations help you make the otherwise incredibly vague range of reason more tangible. Skilled negotiators are able to set parameters on the range of reason and streamline the discussion around unambiguous and focused needs.
When it comes to setting high aspirations, all you need to know are three targets:
Remember, if you have targets, it’s likely the other negotiator does as well. Setting these targets prior to the discussion helps you gauge your own range of reason, and the negotiation itself serves as a calibration between your goals and those of the other party.
To better understand these targets, ask yourself the following questions:
In order to feel completely comfortable in a real negotiation in a competitive environment, you need to understand the dynamics in play. Both negotiators are looking to fulfill their own self-interest, and sometimes a difference in target prices causes friction.
Skilled negotiators understand the competitive dimension of negotiation is not about conflict; it’s about protecting your interests and gaining clarity.
Once your high aspirations are communicated, they can always be lowered. However, raising them in a negotiation once they are known is very difficult. The best way to verbalize your aspirations is to make demands that are precise about what you want, need, or expect.
The ability to set and negotiate high aspirations is one of the core skills that separate a skilled negotiator from an amateur.
By applying the above knowledge to your negotiations, you’ll be able to reach a more favorable target price, form a stronger long-term partnership, and ultimately establish a stronger mental framework for future negotiations.
Our blog series, RED BEAR’s 6 Principles of Negotiation, covers the traits of high-performing negotiators. These skills and behaviors have been used by more than 25% of Fortune 100 companies for over 3 decades to significantly improve business results. Download our Negotiating Profitable Agreements white paper to learn more about RED BEAR’s guiding principles. Or, if you are looking to transform your team into world-class negotiators contact us today to get started.