Negotiations usually revolve around price. The buyer wants it low and the seller high. But more is likely at stake. And negotiations that revolve around a single issue, particularly price, can boomerang.
“Single-issue negotiations become very contentious, and they are particularly dangerous if you are interested in building or maintaining a relationship with the other side. If you are negotiating only one thing, it is very likely that you will either damage the relationship or secure a poor outcome for yourself,” veteran counsellor to negotiators Victoria Medvec, a professor at Northwestern University, writes in her book Negotiate without Fear.
But even when negotiators recognize they should be tackling multiple issues, they often fumble because they fall back on what’s typically negotiated in that type of deal in their company or industry. Instead, you need to put the right deal on the table, which will only come by taking time to thoroughly clarify your objectives.
She encourages you to write a list of all your objectives and then for each devise negotiable issues that allow them to be discussed. You won’t win on every negotiable issue – in fact, on some you may decide to deliberately lose – but these are the steps to getting the best deal possible.
The first issue she says you need to address in sales might surprise you: The customer’s pressing business needs. It’s easy to get so obsessed with your need for sales and business growth you forget that won’t come unless you meet the customer’s needs. And you may not find those needs out by just talking to people you are currently dealing with in the company, since the head of procurement may have different priorities from the plant manager, and both may not be on the same wavelength as the CEO.
Instead, she suggests listening to the last three or four earning calls the CEO held with investment analysts if the other side is a public company or similar firms if it’s not. That will give you a sense of where pressing needs are and how you might fit, allowing you to draw up some negotiable issues.
Another common issue in a customer negotiation is to build your relationship with the other firm. She recommends thinking specifically with whom you might forge that relationship and in what time frame. “I think too often people flippantly talk about building relationships but are not very focused on how they will do it. You need to have an action plan to end up with the relationships that you want to build, and you need to put the right negotiable issues on the table to accomplish that goal,” she writes. She stresses that doesn’t mean simply reducing your price. You want extra services that connect you regularly to the person you are building ties to.
Once you have figured out all the negotiable issues, evaluate them according to whether the item is easy for you to give or harder because it’s important, and similarly how the other side probably weighs those two elements. Issues that are not important to either side can be jettisoned. Contentious issues are those important to both sides. You need to make sure you don’t leave any on the table after a settlement.
Trade-off issues will be those that are easy for the other side to concede but important to you. You want to push hard on those. On the other hand, issues important to the other side but easy for you to you relinquish are “storytelling issues” because they allow you to build a story about your desire to satisfy the other party when you graciously concede those matters.
She also urges you to be ambitious in your negotiation goals, which is more likely to happen if you think about the other side’s weaknesses than just their strengths. Make the first offer, since that establishes the base for negotiations, rather than holding back, and ideally, even in RFPs, give three alternative frameworks for settlement, so the other side has choice.
It’s about more than price and those suggestions help you to make the best deal.
- Some new research offers further insight on the imposter syndrome, a person’s tendency to doubt their own abilities or feel like a fraud. Women are more likely to feel like an imposter than men in fields where they believe natural brilliance rather than hard work is the key to success.
- You can only be qualified to do that which you have already accomplished or trained for, says Atomic Habits author James Clear. Anything new is accomplished by unqualified people.
- When faced with deciding between two possible outcomes – one with a known probability and one with an unknown probability – research shows we tend to choose the option with the known probability. “Our brains skip the hard part of making estimates or guesses about the ambiguous choice and go straight for the more familiar option,” notes researcher Lindsay Morgia.
- Here are four questions Basecamp co-founder Jason Fried likes for reference checking: What’s something that would surprise us about this candidate? Can you tell me about the type of people they’ve hired? What sort of things do they do that often go unnoticed or are underappreciated? If you could change something about them, what would it be?
- Executive coach Carol Kauffman urges her clients to repeatedly ask themselves: “Am I being the person who I want to be right now?”
Stay ahead in your career. We have a weekly Careers newsletter to give you guidance and tips on career management, leadership, business education and more. Sign up today.