Prepare for Negotiating with Precedents

Fail to prepare and prepare to fail.

Remember when your moms and dads told you this before your UPSR and PMR? Remember the hours of study time you put in as a result? Chances are your level of success was proportionate to the amount of time you put in.

Diligent preparation for big challenges pays off in the long run and this holds true today, even though you’re not in school anymore. What are some of the challenges you face on your job that require preparation? That do-or-die sales presentation for a potential customer? Your annual review with your supervisor? How about negotiations with your suppliers?

Among the challenges you face on your job, few pay off as well for adequate preparation as negotiation does. So let's discuss how preparation can help you negotiate better and with more confidence.

Let’s begin with precedents. Precedents are outcomes that have happened before in similar negotiating contexts. Knowing how events turned out in the past can benchmark how you want them to turn out in the present. And in Malaysia, where customs, traditions and long-standing practices are honored, invoking precedents as examples or justification can carry weight in your negotiations.

So do some research. Be prepared with your previous numbers and theirs, if you can access them. For example, if your counterparts are asking for discounts that you can’t provide, be prepared to show them that all of your customers always get equally fair prices.

If you find you have no precedents with the counterpart you’re currently negotiating with, market value is often a good substitute. When you’re planning to negotiate for a used car, for example, reading through the classified ads and knowing how much the car you want is worth will help you ensure that you get a good deal.

Precedents aren’t limited to numbers. You can also find precedents for terms. When the Ford Foundation negotiated to begin operations in Sudan, for example, the Sudanese hesitated when the Ford Foundation’s representatives asked for tax and customs exemption. They eased up immediately, however, when they were told that the Foundation’s agreement with Egypt contained similar exemptions.

The power of the past can give you leverage in negotiations, so spend some time studying your history. Just like for your PMR, the more time you put in, the greater the payoff will be.