Know The Pie
The Pie is what is at stake. The reason why the negotiation takes place. It is important not only to know how much of the pie you want to get but also what exactly the pie is. A failure in doing so can lead to a pretty bad result.
Check out the following video to get to correctly identify the pie.
BATNA
Batna literally means Best Alternative To Negotiated Agreement. In easier words, the BATNA is formed by the other options you have. For example, it is non-sense to negotiate selling a shirt for 15€ when you know someone is willing to buy for 20€ instead. So don’t ever negotiate for something that is worse for yourself than your BATNA. This concept is often referred as "reservation value", just because of what it basically consists on: the value at which you leave the negotiation.
Know Your Opponent
If you want to succeed when sitting at the negotiation table, you first need to know who else is sitting at the table. Know what the counterpart expects to get out of the negotiation, what is the least they are willing to accept, how much the negotiator is allowed to pull the row and any other information that enables you to know the conditions you will be negotiating under.
It is also key to study psychologically the other part, and try to establish rapport. For this it is useful to check what their result was in previous negotiations, how they react under pressure, and what their negotiation styles and techniques are.
Do The Homework
Apart from knowing your opponent, you need to know yourself, and this includes knowing your client, the person you will be negotiating for. You need to determine together what the limits are, what are desired results, and to go over every possible scenario. It is also key to know the legislation applicable, what the costumes of the place of negotiation are, and any other relevant information. They say negotiations are won before even sitting at the table.
