The importance of benchmark information in a negotiation

Performing a detailed benchmark analysis is critical to the success of your negotiations. This enables you to understand what is happening in the marketplace and get your first idea of what you can realistically expect from your customer or vendor. A common mistake that many negotiators make is either not performing this benchmark analysis at all or simply rely on friends or market rumors, which is often misleading and inaccurate, and thus easily dismissed by the other side.

Key factors to consider when gathering benchmark information:

• Source of the data (crowd intelligence or credible knowledge broker).

• Relevance to your specific market

• Data segmented by organization size.

• Region or even country-specific.

• Is the data up to date, when was it collected?

One of the major benefits of this stage, in addition to the knowledge gained, is that it serves to remove a common sense of isolation that often occurs during the negotiation process. Negotiators are often told their needs are unique and therefore difficult to compare to other customer agreements. This data enables you to respond to this comment with real examples of other companies who have been offered better deals.