Information: What to Hide and When to Share During Negotiations
Before any contract negotiation, it's essential that you understand your primary goals, key priorities, and the lowest possible deal that you would be willing to accept. This is the absolute bottom line, without which you cannot agree to a deal.
While this information is essential for you, it's not essential to share with your counterparty. In fact, revealing too much too soon can damage your ability to successfully negotiate. The trick in negotiations, therefore, is to carefully manage information.
Don't Reveal Your Bottom Line
One of the quickest ways to damage your position in a negotiation is to start with your absolute bottom line. If your counterparty knows the lowest offer you are willing to accept, it becomes far more difficult for you to convince them to offer anything more than that minimum. They may also develop the impression that you are over-eager or desperate to make a deal.
Instead, focus on gaining information about them and how you can use that information to increase the value of your offer. If you are directly asked about your bottom line, you may choose to describe a higher offer than the one you're actually willing to accept. Bear in mind that your counterparty might also do this regarding their bottom line and there are ways for you to determine whether they could be lying.
Filter Other Information Carefully
There are other key bits of information that are unwise or even illegal to reveal to your counterparty. This can include financial data, trade secrets, information about a third party, or information that could change as negotiations drag on. Information is extremely valuable. As a general rule, you have a bigger advantage the less the other party knows about you.
By revealing absolutely nothing, however, you run the risk that your counterparty will clam up as well and leave you with no idea what to offer. There are some circumstances in which you will need to disclose information. Make sure that you are giving the other side any information that is required by law. If there is something that could damage their trust in you that they are likely to find out over the course of the negotiation, it's prudent to freely reveal that information before they find it. This could include a past controversy or soon-to-be-announced deal. Sometimes offering small bits of information may encourage your counterparty to give you information about themselves.
You can also use presentation to give a good impression without revealing key facts. Contract presentation, for example, is a great way to appear transparent and professional to your counterparty without giving them concrete details about your strategy. Don’t forget to compress PDF to ensure your contract file looks amazing and paying close attention to formatting and grammar can help you gain that advantage.
Build Trust Without Disclosure
Hiding your bottom line and key facts about your company is an important part of maintaining power in a contract negotiation. You can and should still maintain a friendly and positive business relationship without divulging these facts.
One way to do this is through meeting other business owners outside the bargaining table. Joining your local chamber of commerce can help you get started.
This Hot Deal is promoted by Greater Palm Bay Chamber of Commerce.