7 Strategies to Renegotiate a Deal
There will be times when you need to renegotiate a deal. It could be that the initial negotiations did not push through because both parties couldn’t find a good middle ground or there isn’t enough time for more discussions.
Nevertheless, for today’s article, we are going to talk about the strategies that you can use to successfully renegotiate a deal.
After you’re done reading this article, you won’t have to fear renegotiating a deal ever again!
- Renegotiation is about negotiating the terms again for both parties to reach an agreement.
- Some negotiation does not need to be renegotiated, especially if you are no longer interested.
- In negotiation, you must take a break and weigh all the offers before you try to renegotiate.
Before we delve into how to renegotiate, we must first know what it means. Renegotiating means negotiating again which can be about adjusting the terms or changing the agreement terms entirely.
Renegotiating is done when we feel like the terms are putting us at disadvantage or the benefits are not worth it. This way, parties at the negotiation table can reach an agreement through concession.
When and Why Should you Renegotiate a Deal?
The dream scenario for every negotiator out there would be to get that sweet deal every time negotiations conclude. Whether you end up hard balling the other party or you make some concessions at one point, most of us all want the same thing; we want to get the deal that we want.
However, life is not perfect; there will always come a time where you either need to back out from negotiations. Yes, you can renegotiate even if you walked out from a deal. We’ve already discussed that in an article here.
Apart from the ‘why,’ we also need to talk about the ‘when’. When exactly do you strike for a renegotiation?
Some of the scenarios where you can possibly ask for renegotiation are the following:
- When the other party has to cut off negotiations due to an unexpected event
- When both parties have exhausted all possible outcomes but do not want to end the negotiations because it may affect the relationship between both parties.
- When you feel that you can renegotiate a better deal with the other side.
There are also times when you need to spend some time to cool off. You will have to talk with the other party again, but this time, it will be different. You will be more prepared than before since past negotiations have revealed the other party’s intentions, strengths, and weaknesses.
However, so is the other party. So how do you truly approach a renegotiation and still win?
Why Should You Not Renegotiate a Deal?
We’ve already talked about why you should renegotiate a deal and what to expect when you do it. This time, we are going to discuss why you should renegotiate a deal and the risks involved.
While renegotiating a deal sounds perfect if you want to continue having a good relationship with your suppliers or contractors, there are times when you just need to walk away and not look back.
Some of the instances where it’s not wise to renegotiate are the following:
- When you already stopped the negotiations and left – Stopping all negotiations will always mean that you are no longer interested in pursuing the said deal. There should be no backing out from that decision. Once you’ve left, don’t look back.
- When you’ve gathered information that the other party is not looking to change their offer – Sometimes, one of the reasons for negotiations is to reconsider any offer that was made. If the other party were the ones to use the renegotiation card, you can do some research on the other party and see if they are willing to change their offer for a renegotiation. The risk to this is that if you’re unsuccessful with gathering information, you might end up as the one who is unprepared for the renegotiation.
- When you’ve learned that the other party is someone who is not to be trusted. – During negotiations, there are times when late background checks happen. If negotiation is canceled and there is hope for renegotiations, immediately turn down any renegotiation if the other party has a dubious reputation.
The 7 Strategies to Renegotiate a Deal
While there are many ways to renegotiate a deal, we will give you these lucky 7 strategies to help you in not just renegotiating a deal, but in winning them too.
These strategies are also included in our Negotiation Gamechanger course. We can show you more tricks and tips; all you have to do is just go to our course page and enroll!
So without further ado, here are our strategies in renegotiating a deal:
1. Give yourself a break
When negotiations do not succeed the first time, you have a lot of options. The first option would be to give yourself a break and seek out other interested parties. Weigh in their offers, speak to other negotiating parties and decide if it is in your best interest to continue negotiations with them. Sometimes, you have better luck negotiating with others rather than keep on negotiating because you are too stubborn. Another option of course is to give yourself a break to improve your side of the team. Think of other offers, do some research on the other negotiating party. All in all, a break is almost always beneficial in trying to renegotiate a deal.
2. Know what is right for your business
If you’re ready to renegotiate, then you must make sure that you know what is right for your business. Take some time to meet with your team. Discuss what are the terms that are beneficial for the company. Strive to get the best deal out of the renegotiation table.
3. Prepare for disputes
Even during renegotiations, always expect disputes. Even with short-term contracts, disputes and differences of opinion inevitably arise. Add a clause to your contract that requires the chance to renegotiate, mediate, or arbitrate in the event that parties end up disagreeing about the terms of the contract or how the partnership should unfold.
4. Give clear rules of engagement
Sometimes, a renegotiation happens because both parties misunderstood each other during their deliberation. Sometimes, it’s also due to the other party playing the ultimate hardball negotiator and not leaving the other side some time to gather their thoughts and think of a counter-offer. Whatever the case may be, both parties should have clear rules of engagement during the renegotiation. Both parties should keep in mind that there is no need for any bad blood between the two parties during the negotiation. As one movie line goes, it’s only business, not personal.
5. Make sure that the renegotiation is worth everyone’s while
There is a reason why both parties may agree to a renegotiation. It’s because it could be a chance for both parties to present their offers and that you and the other party are hoping for a better deal. Renegotiation always takes two to tango and it is always possible to get a win-win situation for both parties. The key here is to make sure that offers are more accommodating rather than just be advantageous for one side only.
6. Bring the right people to the table
There are times when earlier negotiations break down because one or two people from either side are not the best people to talk to during negotiations. There will always be people who are either too emotional or too greedy to make concessions with the other. Being the case, do you really want to bring the same people during a renegotiation? You should already know the answer to that. So once a renegotiation is scheduled, it’ll be in your interest (and in the interest of the other party as well) to bring people who can really bring something to the table.
7. Aim for success and plan for failure
While we did mention that a good goal for renegotiation is to make sure both parties get a win-win situation, it doesn’t automatically win that it should be your default stance. You should also aim for success. Try to get the best deal possible given the situation. But if you should fail, then you must have a backup plan. Always have an open mind for every situation before and after renegotiations.
Other Factors that can Affect a Renegotiation
Apart from the 7 strategy tips mentioned above, there are also other factors that can contribute towards the success or failure of a renegotiation:
- The status quo – During renegotiations, always check on the opinion of the status quo. Forcing to accept an outcome that is not what the majority wants is just asking for problems. Sometimes, there is no shame in accepting the wishes of the many.
- The tone of your voice – Did you sound too arrogant or threatening during the initial negotiations? Then maybe that was one of the reasons why the other party walked out and now, you’re going to have to renegotiate. Make sure that you sound sincere and firm, but not condescending or even submissive.
- Learn from your mistakes – If the initial negotiations did not go well because you weren’t prepared or you were too emotional during the discussions, it’s time to think about those mistakes and learn from them. Do the necessary training and preparation needed so that you don’t make the same mistakes again.
- Be direct – Sometimes, most negotiators love to dawdle. They do that in order to get information from the other party. Unfortunately, the best negotiators do not like to dawdle during negotiations and they will instantly spot you the moment you try this tactic on them. It’s far better to be direct on what you and your team want rather than do the waiting game.
+ How to renegotiate a deal?
To renegotiate a deal, you need to come up with a good objective that both parties would be interested to hear.
+ Is it considered bad practice to renegotiate a deal?
No. There are times when you do need to renegotiate a deal. It is often when a concession is made during the initial negotiation due to lack of time.
+ What are good renegotiation strategies?
Good renegotiation strategies include being direct, knowing what everyone wants, and checking the tone of your voice.
Master the Art of Renegotiation
Renegotiating a deal? That can be a tough one. Are you prepared for the mental stress that it’s going to give you?
If your answer is NO, then don’t worry friend! Our Negotiation Course For Procurement Professionals is guaranteed to help you. You’ll be equipped with the knowledge and skills needed to become an ace negotiator!
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