The number one objective of most people attending my negotiating seminars is how to negotiate a better salary. Although I tell people that price and salary shouldn’t be your only focus I was reminded of the first salary I ever negotiated. It went something like this.
After asking for $25,000 the company countered with $18,000. I then asked for $20,000, to which they agreed. After six months on the job I commented to my boss on how much I enjoyed my job that I would have settled for $18,000. My boss said “I’ll let you in on a secret, we would have paid you the $25,000 you were first asking for!” Sometimes we think we get more than we anticipated but most of the time we usually leave a lot on the table.
A critical factor in successful negotiations is planning. Besides failing to establish rapport, the lack of planning is the next biggest cause of not maximizing your negotiating position.
Planning involves the establishment of your settlement range and also estimating the settlement range of the other side. A settlement range is the minimum and maximum that you are willing to go to reach an agreement. You must decide your settlement range before any negotiation takes place. This is important for two reasons: to help you from making concessions you might not have wanted to make, and to reach mutual satisfaction (you want the other party to feel good about the deal too!) Planning also involves identifying other negotiating issues or objectives that will be part of your negotiating strategy.
Steps Towards Planning your Negotiating Strategy
1. Obtain the information you need in order to establish targets and objectives. Do your homework. Be sure you can justify your rationale for each objective target to the other side
2. Set high targets, allowing plenty of room to make concessions.
3. Base your negotiating strategy on strength. What are some of the key areas you can identify that creates leverage for your bargaining position?
4. Base your negotiating strategy also on your weaknesses. Whatever negotiating strategy you design, it must also be based on your weaknesses. It’s better for you to acknowledge what these are than to have the other side tell you.
5. Get input from others who have negotiated a similar deal.
6. Practice! This needs no explanation.
7. Develop a “term sheet” for your negotiations. Developing a “term sheet” helps you focus on key issues that you may overlook during the negotiation process.
Most people compare salary negotiations to a tennis match. One side lobs a figure over the net and the other side lobs another figure over the net. This comparison is not a very good one because in tennis there’s a winner and loser. In negotiations, especially a salary negotiation, the primary goal is to reach a win-win agreement. The goal is mutual satisfaction. This is what makes for a successful negotiation.
By taking the time to plan your next negotiation you’ll make this a reality!
About the Author:
Gabriel Najera is the president & founder of the Najera Consulting Group. Gabriel is a frequent speaker to organizations. And, is a highly sought after advisor to corporate and nonprofit executives looking to develop a strategic thinking mindset.
Gabriel is the author of the forthcoming book, Lessons From the Field: From Farmworker to Fortune 500 Consultant. Gabriel is available to speak to your organization. To inquire about scheduling Gabriel for an upcoming speaking engagement or to inquire about our consulting services, please click on this link.