The Value Of Creating Your own Negotiation Cards

Why Creating Your Own Negotiation Cards is So Powerful and Important

In contract negotiations, the ability to structure and understand both your own needs and the potential priorities of the other party is fundamental to achieving a successful outcome. The process of creating your own negotiation cards provides this clarity in a way that generic preparation methods often fail to do. By identifying the key variables—such as Budget, Delivery Terms, or Service Levels—you’re not just setting limits; you’re defining the battlefield of the negotiation, allowing you to enter discussions with purpose and precision.

1. Enhanced Understanding of Both Sides’ Objectives

The first major benefit of creating your negotiation cards is the ability to visualise both your own and the other party’s objectives. Too often, negotiators focus solely on their own priorities, which can lead to rigid, one-dimensional conversations. By taking the time to define not just what you need, but also anticipating what the other party might value most, you position yourself to find common ground or leverage points.

This step is crucial because every party enters negotiations with different priorities, limits, and expectations. When you understand not only your variables but also those that the other side is likely to prioritise, you can strategise accordingly. This broader perspective allows you to adapt and offer more creative, mutually beneficial solutions, leading to stronger, more resilient contracts.

2. Moving Beyond Fixed Values to Focus on Strategy

Another reason why negotiation cards are so powerful is that they shift your focus from fixed figures to dynamic strategies. Instead of fixating on specific values (such as a strict budget or exact delivery time), you begin to think in terms of changes, tactics, and trade-offs. The goal is no longer just to protect a number or a deadline—it becomes about how you can use your variables as leverage to secure the best overall outcome.

For example, if budget is a tight constraint, but delivery time is more flexible, you might offer a quicker payment schedule to gain a discount. Or, if the supplier is firm on price, you might negotiate for extended service agreements or added value in other areas. This tactical flexibility is often where the true power of negotiation lies, and having clear, well-defined variables allows you to execute these strategies with confidence.

3. Strategic Adaptability and Agility

One of the most underestimated advantages of creating negotiation cards is how they prepare you to respond to changes in real time. A negotiation rarely follows a straight path; unexpected factors, shifting priorities, or last-minute demands are part of the process. With negotiation cards, you’re not just walking in with a single plan—you have a structured, but flexible framework to fall back on.

This adaptability makes you more agile in negotiations, allowing you to pivot when the discussion moves into unexpected territory. By having your key variables mapped out, you can quickly assess where you can concede, where you need to stand firm, and what alternative strategies might get the deal done without compromising your main objectives.

4. Building Confidence and Control in Negotiations

Another significant outcome of creating your own negotiation cards is the confidence it builds. When you walk into a negotiation armed with a clear understanding of your variables and an adaptable strategy, you are naturally more in control of the conversation. This is especially true in complex negotiations, where there are multiple factors to consider and decisions need to be made on the spot.

Confidence doesn’t just affect how you present your case—it influences how the other party perceives your position. A negotiator who clearly understands their goals and has a well-thought-out strategy is far more convincing and authoritative, increasing the likelihood of achieving the desired outcome.

5. Focusing on Value Over Concessions

Finally, negotiation cards encourage you to focus on value rather than concessions. Too often, negotiations become about what you’re willing to give up. By taking the time to map out your variables and their limits, you start to think in terms of how you can add value to both sides instead of just conceding points. This mindset is key to collaborative negotiations, where the best deals are the ones that satisfy both parties.

In summary, creating your own negotiation cards is not just an administrative task—it's a critical, strategic tool. It helps you understand both sides, focus on strategy rather than numbers, and adapt quickly to changing circumstances. By empowering you to negotiate with confidence and clarity, these cards give you a distinct advantage in achieving outcomes that are both successful and sustainable.

Instructions for Creating Your Own 6-Variable Negotiation Cards

Purpose:

The 6-Variable Negotiation Cards will help you structure and practice negotiations by defining key elements of a deal that need to be discussed. This exercise will prepare you to make informed, strategic decisions while considering the constraints and objectives of both sides.

Preparation Exercise:

Before you start creating your cards, take time to reflect on the category of spend you manage. You will need to identify the most relevant variables (See 'Key Characteristics of Negotiation Variables' section below) for your upcoming negotiation. Use the Card Matrix Template (Link Below) and follow the steps below:

1. Identify Your Negotiation Objective:
   Think about your primary goal for the negotiation. What is the most critical aspect of the deal? Are you looking to save costs, improve service levels, or secure better payment terms? This will help guide your choice of variables.

2. Select 4-6 Key Variables:
   Choose the variables that are central to your negotiation. These could be terms like "Budget," "Delivery Schedule," or "Payment Terms." Make sure these variables are directly tied to the outcomes you want to achieve. Use the template below as guidance:

   • Variable 1: Budget – The maximum amount you are willing to spend or save.
   • Variable 2: Delivery Time – The acceptable range for when the product or service must be delivered.
   • Variable 3: Payment Terms – Net 30 days or an alternative that works for both sides.
   • Variable 4: Service Level Agreement (SLA) – The standards that the supplier must meet to avoid penalties.
   • Variable 5: Warranty Period – The duration of product/service coverage post-delivery.
   • Variable 6: Volume Discount – At what volume of goods can you negotiate better pricing?

3. Define Each Variable’s Limit/Objective:
   For each variable, decide on a target figure or range. This should represent the ideal outcome or the maximum/minimum you are willing to accept. Keep this to a one or two-word description. Example:

   • Variable: Payment Terms
     Limit/Objective: Net 60 days.

4. Evaluate Past Supplier Agreements:
   Look at previous contracts and supplier performance to see where negotiations succeeded or failed. This will give you insights into how flexible suppliers have been on key variables in the past.

5. Prepare for Concessions:
   For each variable, think about potential concessions you might need to make. If the supplier can’t meet your preferred delivery schedule, could they offer a better price or improved payment terms instead?

SAMPLE NEGOTIATION VARIABLES:

Here is a list of 30 simple variables that could be used in commercial buying and selling negotiations, suitable for inclusion on negotiation cards:

1. Price per Unit – The cost of each individual item or service.
2. Total Budget – The overall amount allocated for the purchase.
3. Payment Terms – The timeframe for payment (e.g., Net 30 days).
4. Delivery Time – The period in which goods/services must be delivered.
5. Volume/Quantity – The number of units to be purchased/sold.
6. Discount Terms – Reductions offered for bulk purchasing or early payment.
7. Shipping Costs – Who is responsible for paying the shipping or delivery charges.
8. Installation Costs – Charges for setting up the product or service.
9. Warranty Period – The duration of the warranty covering repairs or replacements.
10. Service Level Agreement (SLA) – The performance standards to be met.
11. Lead Time – The amount of time between order placement and delivery.
12. Return Policy – Conditions under which goods can be returned.
13. Termination Clause – Conditions under which the contract can be canceled.
14. Penalties for Late Delivery – Fines or fees if deadlines are not met.
15. Training & Support – Provisions for user training or ongoing support services.
16. Maintenance Costs – Ongoing fees for maintaining goods/services.
17. Ownership of Intellectual Property – Who owns any intellectual property created.
18. Duration of Contract – The length of time the agreement is valid.
19. Performance Bonuses – Incentives for exceeding expectations or performance targets.
20. Inspection Rights – Rights to inspect goods or services before acceptance.
21. Liability for Damages – Who is responsible for damage during delivery or use.
22. Subcontracting – Whether third parties can be involved in delivering the service or product.
23. Quality Assurance Standards – Minimum quality specifications that must be met.
24. Currency of Payment – Which currency will be used for transactions.
25. Exclusivity Clause – Whether the seller is the exclusive provider of the product or service.
26. Price Adjustment Clause – Conditions that allow price changes (e.g., inflation).
27. Packaging Requirements – Specifications for how goods must be packaged.
28. Inspection Period – The time allowed to inspect goods/services before acceptance.
29. Insurance Requirements – Coverage required during transport or service provision.
30. Environmental Standards – Compliance with environmental or sustainability guidelines.

These variables are straightforward yet essential for most commercial negotiations and can easily be included on negotiation cards for practice.