1. Not understanding your counterparts' interests and how they are ranked.
Don't focus entirely on what you want, instead focus on what they want or need. This will ensure that you make equitable trades.
What are their interests? What do they need? During your preparation you will have uncovered most of the information you need, now put your listening skills to use so you can recognize how they view the importance of their interests. Some of these interests will match your own and some will be in opposition to yours. It's the opposing interests that you negotiate.
This is when you ask yourself "What do I have to trade that is of lesser value to me and of higher value to them?" During the give and take phase of the negotiation process, you can be more confident and less stressed by having considered these options ahead of time.
2. Not investing the appropriate amount of time preparing for important negotiations.
Value is created during the preparation process, not at the table. Spend 2 to 3 times in preparation as a proportion of the time you’ll spend in negotiation.
Have you ever left a negotiation feeling battered and bruised like you never had a chance from the word go? Not only did you not practice enough before going into the meeting, but it's also highly likely you truly weren't prepared with the right information, alternative plan, and an understanding of your counterparts' needs and wants.
Learn all that you can about the decision makers, the impact on them if you get what you want, the impact on them if your alternative plan is accepted. This will give you leverage while also giving you the flexibility needed to make subtle changes to your offer or counter-offer.
3. Failing to understand what your counterpart’s opening offer will be.
Your opening offer anchors the negotiation and greatly impacts the outcome of the meeting. You want to spend as much time as possible developing your opening offer. And then, as much time as possible learning about your counterpart and their opening position. From this preparation, you can determine what your counterpart's opening offer will be. This gives you the power of confidence in your own position and ability to make slight changes because you understand their position and that you can end the meeting with a win/win agreement.
4. Not recognizing the difference between their opening offer and their 'walk away' option.
Remember, your opening position sets the tone for the negotiation. Don't start with your bottom line (walk away option). This places you in a weak position because now you have nothing to bargain with. It is much better to start with an ambitious opening offer that will give you room to maneuver when it's not accepted.
If you have prepared well for the negotiation, don't start with their walk away, either. You leave no room for discussion and that means there really is no negotiation that will happen. They will walk away and you will be left wondering "what went wrong."
Instead, understand the difference between an opening offer and a 'walk away' offer. And, understand that they are beginning with their opening offer. When you start from that perspective, your participation in the negotiation becomes stronger and more focused on determining how an agreement can be settled on that offers you and them value and meets your needs and wants.
5. Having no actionable alternatives to doing business with your counterpart.
Having no alternative to reaching an agreement puts you in a weak negotiation position and gives away your power. Before negotiating, don’t have just one offer or plan, make sure you have an actionable backup plan. A backup plan that is set for you to pull in when the meeting takes a turn away for your desired outcome or when their counteroffer eliminates the possibility of your first offer. This is where BATNA comes to the rescue.
BATNA means ‘Best Alternative to a Negotiated Agreement‘. It is also referred to as "not having all of your eggs in one basket." This is your backup plan. It can also be your "final offer" or trump card to make the deal happen to your advantage.
As the talks move forward, get heated, become more about debate or arguing rather than constructive talks that will lead to the outcome you want, you can turn to your best alternative. A strong BATNA is very much like an insurance policy, offering a solid alternative that gives you options, another possibility and gives you the confidence to walk away if no deal can be made.
BATNA comes from planning and preparation. It is a two-part process that is based on flexibility, releasing you from being fully committed to just one possibility. Preparation begins with you determining all your available options and then having a reasonable understanding of your counterpart's alternatives and options. From there, you figure out who's alternative is stronger and more actionable.
Circumstances and negotiations can change quickly. Unexpected changes include new information brought forth by your counterpart, a rise in cost occurring the day before the meeting, new legislation, additional people brought to the negotiation meeting. Any shift in conditions will have an effect on the strength of either party's BATNA during the negotiation process. Being prepared means you will be protected.