Posts Tagged ‘how to negotiation’

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Why Win-Win Sales Negotiating Never Works And What To Do About It

Tuesday, October 13th, 2009
Win-Win Negotiating Is The Wrong Way To Go

Win-Win Negotiating Is The Wrong Way To Go

Quick: what’s the first thing that you think about when you picture your next negotiation in your mind? Unless you are Mother Teresa’s brother / sister I’ll bet that you saw yourself walking away from the bargaining table with the best deal in the world , you had gotten everything that you had wanted and more. Umm, what about the other side? That’s why win-win negotiating never works.

How Win-Win Negotiating Is Supposed To Work

Too many people have created in their minds a magical world where win-win negotiating (where lions lay down with lambs, money grows on trees, etc.) always works. Instead of worrying about things like price, delivery date, and quantities, you are expected to instead be worrying about how the other side “feels” and what kind of deal will make them “happy“. Balderdash.

I don’t know about you, but I am forced to live in the real world. Flat out I don’t have the time to spend trying to worry about how the other side of the table is feeling today. It may come as no surprise to you that in my experience the other side is not spending any time trying to decode what my lucky mood ring is telling them about my current feelings either.

This kind of Pollyanna approach to negotiating does not work and the folks who go around writing books about it and teaching negotiating courses based on it have created a generation of negotiators who are, dare I say it?, ineffective.

Win-Win In The Real World

I like the part about “win-win” where I win in a negotiation; however, I’m a bit leery about the other side winning also , doesn’t that mean that I lost something? It sure does if I’m sitting at table with you and  a stack of 100 $1 bills and you and I are negotiating about how much of the stack each of us gets. Every $1 bill that you get is one that I don’t get , and I want ‘em all. I’ve been in negotiations like this and they basically suck.

In the real world you and I are sitting at a table on which is a pile of eggs, a chicken, and a pig. Now let’s start negotiating. Maybe I run a restaurant and you run a grocery store. On the surface things look the same as the stack of $1 bills example. However, this time around we’ve each got different needs. We actually might be able to find some common ground.

If I’m running a restaurant, then I’ve got dinners that I’ve got to cook tonight. If you’re running a grocery story then you’ve got to stock your shelves for this week , we’re both trying to solve time related supply issues. Long after the eggs, chicken, and the pig are gone I’ll still need to get supplies for my restaurant and you would love to sell those to me.

For creating my dinners, the chicken and the pig are more valuable to me, for stocking shelves for a week, the eggs and the chicken are more valuable to you. I’d might be willing to give up on the eggs if you’d give up on the pig. In fact when it comes to that pig, I’m interested in using the ham for a dinner and you might be interested in the bacon to go with the eggs that you’ll be selling to people buying breakfast food.

What you’re seeing here is how our self-interests start to overlap. No Pollyanna “I want to hold your hand” stuff, instead I’m still just thinking about myself; however, as more of my drivers are put on the table we’re finding out that you have many of the same drivers. Negotiating a deal that solves more of our common drivers is what’s going to create the best long-term solution.

Final Thoughts

Ever since that dang Getting to Yes book came out, negotiators have been pursuing a mythical unicorn-like type of negotiation , one where everyone gets what they wants and walks away from the table happy.

In the real world, this just simply doesn’t exist. Instead, we find ourselves in a situation where we need to work very hard to make sure that our side of the table’s needs are taken care of because nobody else is looking out for us.

Where there is some hope comes from taking a close look at our self-interests and finding out if there is any overlap with the other side’s. Where we are able to find common ground, we’ve got an opportunity to create a deal that will benefit both of us at the same time. As long as I get my chicken and my part of the pig, I’ll be happy.

Do you think that win-win negotiating has any place in real-world negotiations?

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

One situation that my students seem to struggle with over and over again is the case where it’s them and a whole bunch of other companies all trying to get the same deal. The other companies appear to be prettier, smarter, and all around better , what chance do any of us have against them?

http://www.theaccidentalnegotiator.com/

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Negotiators Know That Persistence (& Risk Taking) Pay Off

Tuesday, October 6th, 2009
Persistence And Risk Taking In Negotiations Can Pay Off

Persistence And Risk Taking In Negotiations Can Pay Off

In this world there are two types of negotiators: the good ones and everyone else. The goal of any negotiator is to become a member of the group of good negotiators. The challenge is that the path to becoming a good negotiator is not always clear. However, there are two basic skills that lay on this path: persistence and the ability to take the right risks.

Persistence Pays Off For Negotiators

Persistence is another one of those skills that we all think should be obvious to ever negotiator; however, it’s very easy to not have it. When the other side of the table says “no” to one of our offers during a negotiation, it’s very easy to lose heart and give up.

However, the negotiator who treats every “no” as a step towards “yes” is the one who will be successful in the end. Realizing that there is a reason that the other side is saying no and then being persistent enough to continue talking until you uncover that reason is the key to success.

American negotiators have been confronted with negotiators from other countries who appeared to be unmovable in their positions. Day after day the negotiations would continue with no progress being made. In the case where the Americans would return to the table and not give up, eventually progress ended up being made. The other side’s unmovable position was just a ploy to see how committed the Americans were to the negotiations.

Risk Taking Has Its Rewards

Being persistent in a negotiation is a form of risk taking: you are risking continuing down a path that may not pan out for you. However, there are other forms of risk taking that can occur during a negotiation:

  • Deadlock: The risk of encountering a deadlock faces every negotiator. The more you press a point, the greater the possibility that the other side will become unyielding. A skilled negotiator knows how to not force the other side into a position from which there is no way out.
  • Losing Current Deals: Whenever a change to an existing deal is being negotiated, both parties realize that there is a risk that they could walk away from the table with no deal at all. Often it’s this fear of losing an existing deal that will keep both parties at the table. Sharp negotiators realize this and will be willing to push harder because they know the other side of the table won’t walk away.
  • Losing Opportunities: Both buyers and sellers can potentially not realize that a deal is more important to the other side than it seems at first glance. Sellers may be trying to break into a new market or buyers may be trying to get additional suppliers. In situations like this, the other side of the table can press harder because the risk of reaching a deadlock is much less.

Final Thoughts

Successful negotiators aren’t that much different from everyone else. The things that distinguish them are actually very small details. Two of the most important features of a good negotiator are persistence and knowing when to take risks.

Persistence means knowing when to keep on even after you’ve been told “no” by the other side. Good risk taking is when you know that your persistence will pay off for you in the end. When you can combine these skills, you will have become a good negotiator and you will be able to close better deals and close them quicker.

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

Quick: what’s the first thing that you think about when you picture your next negotiation in your mind? Unless you are Mother Teresa’s brother / sister I’ll bet that you saw yourself walking away from the bargaining table with the best deal in the world , you had gotten everything that you had wanted and more. Umm, what about the other side? That’s why win-win negotiating never works.

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Posted in risk | 1 Comment »

He Who Works The Hardest, Wins The Negotiation

Tuesday, September 29th, 2009
Hard Work Pays Off In Negotiations

Hard Work Pays Off In Negotiations

What is the secret for walking away from your next sales negotiation feeling satisfied? We all wish that there was some magic “silver bullet” technique that if we knew what it was we could use it every time we negotiate in order to be able to walk away feeling like our negotiating time was well spent. It turns out that there is such a technique, and it’s called doing your homework.

The Hard Work Theory

I don’t think that I’m going to be causing anyone to fall over in surprise when I tell you that it has been proven time after time that the harder that you work during a negotiation, the better the result that you’ll be able to achieve. This is what professional negotiators refer to as “the hard work theory“.

An interesting side benefit to the hard work theory is that during the negotiation, the harder that you make the other side of the table work, the greater will be their level of satisfaction with the final outcome. This of course means that they will be that much more likely to fully honor their side of the agreement.

It goes without saying that there is another side to the hard work theory. Simply put, lazy people make poor sales negotiators. What this means for you is that the next time that you are preparing for a negotiation and are assembling a team, you’re going to want to make sure that you have no lazy people on your team!

Using Work Power To Build Negotiating Power

Since the negotiator who works the hardest will generally come out of any negotiation ahead of the other side, this brings up the question of how we can use this “work power” to our best advantage. It turns out that there are three principles that can guide us in doing this:

  • The Least Effort Principle , This principle states that most people would prefer to make their lives as easy as possible. This means that they really don’t want to negotiate , they’d rather just say “yes” to an offered deal instead of complicating their lives by having to negotiate for a better deal. What this means for you is that most people won’t want to walk away from a sales negotiation once its started because it would be too much effort to find someone else and restart negotiations.
  • The Wasted Work Principle , This principle is exactly what it sounds like, nobody likes to waste their time and energy. What this means for you is that once a sales negotiation has been started, the other side wants to see it through to the end. In fact, the longer the negotiation goes on, the more the other side wants the deal to close.
  • The Easy-Come-Easy-Go Principle , Simple put, nobody really wants anything for free. The other side will not appreciate anything that they get too easily. Instead, you need to make it at least somewhat difficult for the other side to get what they want. Only by doing this will you boost the other side of the table’s satisfaction with the final result of the negotiations.

Final Thoughts

The buyer who makes up his or her mind that “there’s always another deal” if this deal collapses is best able to show some resolve and obtain a better price. However, thankfully, most negotiators are too lazy and subscribe to the three work principles of negotiating: least effort, wasted work, and easy-come-easy-go.

What this means for you is that the more energy and effort that you put into a negotiation, then the better your odds of coming out of it with a deal that both sides are happy with.

If you can learn to do your homework better than the other side of the table before your next negotiation, then you will be able to close better deals and close them quicker.

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

In this world there are two types of negotiators: the good ones and everyone else. The goal of any negotiator is to become a member of the group of good negotiators. The challenge is that the path to becoming a good negotiator is not always clear. However, there are two basic skills that lay on this path: persistence and the ability to take the right risks.

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Posted in art of negotiation | 2 Comments »

The Power Of Time In A Sales Negotiation

Tuesday, September 22nd, 2009
If You Control Time, Then You Control The Negotiation

If You Control Time, Then You Control The Negotiation

When I work with clients to improve their negotiating skills, one of the first things that we do is to sit down and review their past experiences with negotiating situations. This generally produces a list of both good and bad experiences. The reason that I take the time to do this is because it shows me where things have gone wrong in the past and where my customers need to spend the most time developing their negotiating skills.

Time after time the same weakness shows up in my clients. No matter how confident they may feel about a negotiation or how much research they’ve done going in, the issue of available time seems to trip them up over and over again.

How The Japanese Used Time To Their Advantage

In the early 1980′s U.S. businesses “rediscovered” Japan and almost every business wanted to strike a deal with a Japanese business in order to get access to high quality, low cost goods. What this meant is that a lot of U.S. business men (and women) got on planes and flew over to Japan to do some sales negotiating.

It quickly became apparent that the Japanese were excellent negotiators. The Americans were coming home with signed business deals that were ok, but nothing close to what they had originally been hoping for.

It turns out that the Japanese were not only good negotiators, but they also knew how to read an airline’s flight schedule. The Japanese would find out when the Americans were scheduled to fly home and they would stall during the negotiations until it got close to the time for the Americans to leave for the airport.

The Americans would be desperate to close a deal and would end up giving too much away just to be able to make their flight. After this had been going on for awhile, one American took the time to step back and study how negotiations were going with the Japanese. He quickly discovered what they were doing and how they were doing it.

The next time that he was scheduled to negotiate in Japan with the Japanese, he found out when the Japanese that he would be negotiating with were scheduled to take the train home. He went ahead and made two flight reservations – one before their train left, and one afterwards. Once the negotiations started, he stalled and the Japanese couldn’t figure out why he wasn’t getting worried about missing his flight. After he had missed the window to leave the negotiations for his flight, he started to get serious about negotiating. Now it was time for the Japanese to start to get nervous , they were worried about missing their train back to Tokyo. In the end, they ended up making too many concessions.

Seven Ideas To Build Your Time Power

One of the fundamental lessons that I include in all of my training sessions with my clients is that time is a crucial element when it comes to bargaining power. What it all comes down to is one simple rule: the more time that I have, and the less time that you have, then the more negotiating power I will have.

Now of course, the key to making sure that you have more time during a negotiation is to take action to ensure that you have the time that you need. Here are seven ways that you can ensure that you’ll have the time that you need:

  • Leave time to shop around , You may be negotiating with the wrong people sitting on the other side of the table. You may decide to go searching for someone else to do a deal with. If this happens, it’s going to take some time and so you’re going to need to have enough time to do that search.
  • Be on time for the meeting , This seems like a silly thing to say, but you’d be amazed at how many people don’t do it. If you show up for a negotiation late, then you are going to be running behind during the entire discussion. Being there on time will help you get started in a relaxed way.
  • Give yourself time to think , Don’t let the other side push you into making a decision that might be the wrong decision for you. Instead, call for periodic breaks and give yourself some thinking time in order to reassess where things stand and what your next steps should be.
  • Avoid marathon talks , Death marches will only end up killing you. No matter how “cool” it might be to tell your boss that you were in negotiations for 8, 10, 12 hours straight the sad reality is that your performance drops off over time. The one exception to this rule is that if you are pleased with where things currently stand and you’d like to push on to the end in order to wrap things up.
  • Pick the best time to negotiate , They always say that there is a time for everything and negotiating is no exception to this rule. Are you a morning person or an evening person? Know your preference and schedule your negotiating sessions accordingly.
  • Leave time for things to go wrong , This one is huge. Things will never go according to your plan. You need to anticipate that things that you could never have counted on will happen, points that you though both sides agreed to before discussions stared will turn out to be significant issues, etc. Leave time to work all of these things out.
  • Leave enough time to plan , So often my clients will think that planning is something that you only do before you start a negotiation. It turns out that you do do it before, but you also do it during the negotiation in order to adjust to events that unfold during the negotiation.
  • Leave enough time to negotiate with your second choice – If things don’t go the way that you want them to with the other side of the table, make sure that you’ll still have enough time to negotiate with another partner. There is no worse feeling than knowing that you have to stick with a bad negotiation because you don’t have any other alternatives.

Final Thoughts

All too often time starts to cause you to make hurried decisions because you have a real or an imagined deadline looming. When that happens, stop, take a deep breath and then ask yourself the following three questions in order to find ways to relieve the pressure of that deadline:

  1. What self-imposed or organization-imposed deadlines am I under?
  2. Are the deadlines that I’m under real?
  3. What deadlines are putting pressure on the other side?

One of the most important points to remember about time and deadlines in a negotiation is that you may not the only one under pressure, the other side may be under greater pressure than you.

If you can learn to make time work for you during your next negotiation, then you will be able to close better deals and close them quicker.

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

What is the secret for walking away from your next sales negotiation feeling satisfied? We all wish that there was some magic “silver bullet” technique that if we knew what it was we could use it every time we negotiate in order to be able to walk away feeling like our negotiating time was well spent. It turns out that there is such a technique, and it’s called doing your homework.

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Posted in time | 2 Comments »

Hidden Needs Drive Sales Negotiations

Tuesday, September 15th, 2009

Hidden Needs Can Get 'Ya In Sales Negotiations <p> (c) - 2006 </p>

Hidden Needs Can Get 'Ya In Sales Negotiations (c) - 2006

All sales negotiations are driven by both public and private needs. If you can understand and deal with the other side’s hidden needs, then you’ll have more power during the negotiation.

It’s What Lies Below The Surface That Really Matters

When we enter into a sales negotiation, we like to kid ourselves that we know what the other side is looking to get out of the negotiation. At least on the surface, all sales negotiations look the same.

The easy-to-see desires of the other side generally come down to one of three things: money, goods, and / or services. This is what we can see and this is what we spend our time preparing to negotiate. However, that’s really only part of the story.

Knowledge Of Hidden Needs Boosts Your Power

I’m sure that you’re probably already agreeing with me that knowing the other side of the table’s hidden needs would be advantageous when you are getting ready to negotiate. However, did you know that this knowledge will increase your negotiating power?

Remember that power in a sales negotiation is a difficult thing to nail down. However, the more that you know about the other side and their hidden needs, then the more negotiating power you’ll have.

The Search For Hidden Needs

If we can all agree that identifying the other side’s hidden needs is a good thing, than all that is left for us to talk about is just exactly HOW you can go about doing that. The key is to have a good set of questions.

These are the questions that you need to ask yourself BEFORE you enter into a sales negotiation. Not every question will pertain to this specific negotiation and your list will evolve over time. Here’s a good set of questions for you to start asking yourself:

  • Do they want to make their lives easier?
  • Do they want to appear to be competent?
  • Do they want peace of mind?
  • Do they want to be listened to?
  • Do they want freedom of choice?
  • Do they want to keep their job?
  • Do they want recognition?
  • Do they want to be liked?

Final Thoughts

As you enter into a sales negotiation, you need to realize that the other side of the table probably has more hidden needs than they have publicly known needs. What this means for you is that the other side of the table won’t say “yes” to your requests until after at least some of their hidden wants have been fulfilled.

In the end, all negotiating is about making sure that you have enough power to be successful. One of the most important keys is to realize that we need to also address the other side of the table’s hidden needs in order reach an agreement that both sides can live with.

If you can learn to spot these hidden needs before you enter into your next negotiation, then you will be able to close better deals and close them quicker.

Click here to get automatic updates when The Accidental Negotiator Blog is updated.

What We’ll Be Talking About Next Time

Time after time the same weakness shows up in my clients. No matter how confident they may feel about a negotiation or how much research they’ve done going in, the issue of available time seems to trip them up over and over again.

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Posted in negotiation goal | No Comments »

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