Ever negotiate a deal and happily put it to bed, only to have to revisit it months or years later? Every negotiator has ended up with an agreement that no longer suits their needs, or their adversary’s, and must go back to the table to turn the lopsided deal right again. But the dynamics of renegotiation aren’t the same as negotiating for the first time, and renegotiating what you thought was a done deal comes with its own set of pressures. Read on for tips on renegotiating effectively.
- Identify the key issues: Are you the party initiating the renegotiation? Before approaching the other parties, make sure you have a clear idea of what is wrong with the current contract. Look at the role each party plays in causing the problem and how everyone, not just you, is affected by it. Then decide which issues are most important. You may not be able to resolve everything. Plan to address your biggest problem first. On the receiving end of a renegotiation request? Analyze and understand what’s critical to the other side, what points you can’t budge on, and where you may have some room to negotiate. Decide if it’s worth giving a little to avoid the deal falling apart – or if it isn’t.
- Propose a renegotiation: If you’re the party seeking the renegotiation, once you’ve identified the issues, confront all parties involved and actually propose a renegotiation. Clearly articulate why you view components of the contract – or results that came out of the contract – as problems, and back that up with convincing evidence. Odds are that the opposing side will be willing to sit down and consider alternatives. Most people have a desire to be fair, especially if you’re able to back up your claims with evidence – and even if they’re not feeling charitable, they may choose renegotiation over an expensive lawsuit.
- Understand the dynamics: Negotiations for new business deals are often positive, with the parties sharing an optimistic view of the deal’s potential. But renegotiation often takes place somewhere between dashed expectations and the threat – or actual filing – of a lawsuit. Understand that the same negotiation strategies you employed the first time around may not be the right choice now, and that you and your adversary know more about each other than before. This reality can be either a curse (you let your adversary exploit what they know to their own advantage) or a blessing (here’s an opportunity for you to use what you learned during the first go-round to get a more advantageous deal).
- Create value: A gain for you doesn’t need to be a loss for them – it’s in your best interest to provide some benefit to the opposing party in your proposed resolution. You’ll accomplish nothing if you both enter the renegotiation unwilling to give an inch. Create an atmosphere of cooperation and see how you can come to at least a win-not-lose solution.
- Take your time: With urgent problems, it’s common for negotiators to push for a quick fix to alleviate the stress. But the flawless plan you negotiate today may not work for you three years from now. (Isn’t that why you’re at the renegotiation table in the first place?) Take the time to consider negotiating shorter-term deals that will allow for natural breaks for renegotiation. Both parties can come back to the negotiation table and discuss what works for their businesses after the short contract concludes.
Whether you want to renegotiate because your original plan has unintended consequences, or you just want to see if you can get more out of your deal, keeping the above tips in mind will help your renegotiation plan succeed.