It might seem self-evident that the best result of a contract negotiation is one in which you get almost everything you want and the other party gets little or none of what they want. For example, if you're buying widgets from a supplier, you'd generally want to get the lowest price possible, saving your company money.
However, approaching your contract negotiations as a competition can have long-term negative effects on your business relationships. A supplier who feels as if they got a poor deal on a sales contract is not likely to go above and beyond for you when it comes to service. Additionally, they may be less inclined to work with you on future contracts.
This article explores the unique issues and challenges created by pursuing a more collaboration-based mindset for contract negotiations. While collaboration-based negotiating may seem less effective than the traditional domination-and-victory-based approach, its benefits become clearer over time.
Subjective and Objective Results
Keep in mind that no matter how good you think the deal is for the other party, that other party may not feel the same way. The opposite is also true, though less common: sometimes, granting a concession that doesn't matter much to your position can matter a great deal to the other party.
Pursuing a collaborative approach doesn't necessarily have to mean that both parties get exactly half of what they want. The important thing is to ensure that the other party doesn't feel like you steamrolled them, tricked them, or outmaneuvered them. You want them to leave the table feeling as if you worked together to find the best and fairest solution.
Holding and Folding
Although a collaborative-based approach usually leads to results that please both parties, things don't always go as planned. Sometimes, the other party may believe that your attempt to go collaborative isn't fully sincere. Other times, you might find that your negotiations get consistently sidetracked as the other party senses that you're willing to grant unexpected concessions.
Should your negotiations begin to go down this kind of road, it's best to pull back for a second and determine how much your business needs the deal. Depending on your analysis, you might determine it's best to continue with the collaborative approach and try a different approach on the next negotiation. You might also try frankly discussing the philosophy behind the collaborative approach with the other party.
Closing the Contract
When it comes time to close on a contract, don't underestimate the importance of presenting your negotiating partner with a clean, refined document. Even if all of the contract's details are clearly explained in the text, poor visual presentation can undermine your partner's willingness to make the deal official. Remember you can convert a PDF to Word when designing the final product to ensure that your contract file looks crisp and professional.
Using Local Resources
Members of your city or town's chamber of commerce can help you learn more about negotiation tactics and how best to find solutions that serve all parties' interests.
Join your chamber of commerce today.
This Hot Deal is promoted by Greater Portage Chamber of Commerce - IN.