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Negotiate Effectively: Define Objectives

This lesson is a part of an audio course Negotiate Effectively by Barbara J. Bruno

No matter which type of negotiation you undertake, establishing your objectives in advance will help bring about a favorable outcome. The goal of negotiating is to achieve a result that, even if it falls a little short of your original objective, is a satisfactory outcome. Compromise is an essential component of successfully negotiating so that everyone feels that they gained something in the process.

If you asked most people, "What is the primary objective of negotiating?" their answer usually revolves around money. The price is probably only one of many considerations that are on the table. There are times when bids are being accepted that decisions are based 100% on price or when a product or service has been commoditized.

In most instances, there are other considerations that could include quality, delivery date, customer support, innovation, or the creation of a long-term relationship that has equal or greater importance than price.

Preliminary Objectives

Develop your objectives in advance before you begin your negotiating process. Carefully outline what you prefer to get from your negotiations. Some of your objectives may be straightforward and easy. Complex projects may require you to consider the short as well as long term impact of your negotiations.

For example, when I rented my office in Chicago, I learned to negotiate the entire value of the lease vs. the price per square footage. The total amount for a 5-year lease was much higher, and when I negotiated a flat amount for the five- year period, my investment was much lower. This negotiation was simple, straightforward, and easily resolved in a couple of days.

When I decided to invest in a new Applicant Tracking System for my business, the negotiations were much more complicated. I also realized the tremendous time and cost factors involved when switching from my current system to a new system. In addition, I had to consider the cost of the training and learning curve for my sales team to embrace the new system they would be utilizing daily.

We needed to make sure information would transfer. We wanted as little downtime as possible. I needed to get the buy-in from my sales team so they would not resist the change, and I also considered the cost if I were to decide in the future to transition from this company to another. In addition, I refused to sign an automatic renewal of my contract. The negotiations took weeks, and even though we addressed all details, we still ran into issues throughout the transition that the contract did not address.

Determine Maximums and Minimums

After you create your list of objectives, you will realize they are not all equal in their level of importance. Review each objective and develop a maximum desired level and a minimum acceptable level.

For example, you can always negotiate down, but it is extremely difficult to negotiate up. As a result, you may begin your negotiating by offering a higher price, knowing you have room to decrease your offer if it is not accepted. If you require customization, you will expect to pay a premium price.

Delivery costs are always negotiable. Often free delivery is offered if you reach a certain buying threshold or you do not require expedited delivery. On the other hand, if you need items delivered quick, you will expect to pay more.

Understand other Objectives

When you know or understand the other person or company involved in the negotiating process, you can refine your objectives, so both of you reach a favorable outcome.

For example: Imagine if a valued employee asked you for a raise, but you were limited by company salary ranges. You did not want to lose this person and were aware that they had a very long commute. So rather than meet their financial request, you gave them a small salary increase but offered the option of working remotely, which saved them time, money and allowed them to spend more time with their family.

This offer was not what the employee had requested but gave them recognition for the job they were doing, flexibility, and eliminated the expense and time of their commute. If you had not known about the long commute, you could have never negotiated this positive outcome for you and your employee.

Current Conditions and Circumstances

For years I sold real estate, and the market would constantly fluctuate, from a sellers' to a buyers' market. This greatly impacted the cost of the properties, mortgage rates that were offered, and the inventory of properties available.

When homes are in great demand, mortgage rates are low, and the inventory is low, sellers do not need to negotiate on their listed price. In fact, in most instances, they would receive offers above the prices listed.

On the opposite side of this scenario, when inventory and mortgage rates are high, it becomes a buyers' market, and sellers become very willing to negotiate if they want to sell their property.

Your ability to negotiate is impacted by economic conditions, whether you are negotiating from a position of strength or weakness and the demand for the products or services you are offering.

Long-Term Objectives

When determining your objectives for negotiations, consider the long-term value and relationship you have with the other party. I have sometimes negotiated a small profit or even a breakeven with a great client to solidify my long-term relationship with them.

Obviously, it is great when both parties leave the table feeling satisfied, but there are times when you might decide to take a little "hit" when you consider the future long-term value of the relationship with this person or company.


When presented with a bad deal, your objective becomes to walk away. You can not afford to negotiate an unprofitable deal or one that does not meet the minimum objectives you set prior to the negotiating process. When you establish your objectives upfront, you are learning how to be an effective negotiator that will not be pressured to accept a bad deal!

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Written by

Barbara J. Bruno

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