Effective Preparation for a Negotiation: Counterparty Assessment
A skilled negotiator never focuses only on themselves.
To create a win-win outcome, you must understand the other party just as clearly as you understand your own goals.
Counterparty Assessment means:
👉 Understanding what they want
👉 Understanding what they can accept or reject
👉 Understanding what pressures or limitations they are facing
When you understand the other side deeply, you can design proposals that benefit both parties.
Let’s break this down.
🔵 1. What Does the Counterparty Want?
Start by asking:
- What is their main goal?
- What are their ideal outcomes?
- What value are they looking for?
- Which issues matter the most to them?
You can find this through research, past interactions, industry knowledge, or early conversations.
Understanding their desires helps you find common ground.
🟦 2. What Are Their Limits or Constraints?
Just like you have a reservation point, the counterparty has theirs.
Ask yourself:
- What might be their least acceptable outcome?
- What internal rules, policies, or budgets limit them?
- Are they under time pressure?
- Are there political, financial, or operational constraints?
Knowing their limits helps you avoid unrealistic demands and build practical solutions.
🟫 3. What Is Their Best Alternative (Their BATNA)?
The other party also has backup options.
Ask:
- If they don’t agree with us, what can they do instead?
- Do they have other partners or suppliers waiting?
- Is their alternative stronger or weaker than ours?
If their BATNA is strong, they may negotiate aggressively.
If it is weak, they may be more flexible.
This understanding helps you plan your strategy.
🔷 4. What Are Their Strengths and Weaknesses?
Identify:
- What advantages do they have?
- What disadvantages might they be hiding?
- Where do they have strong capabilities?
- Where might they need your help?
This helps you shape offers that highlight your strengths while matching their needs.
🔶 Why Counterparty Assessment Matters
When you study the other side carefully, you can:
✔ Predict their moves
✔ Avoid unnecessary conflict
✔ Propose solutions they will like
✔ Make them feel respected and understood
✔ Build trust and long-term relationships
✔ Create win-win outcomes faster
Good negotiators don’t fight the counterparty —
they understand the counterparty.