In this short video clip, David Zehren explains why negotiators should resist the urge to offer a solution too soon in a negotiation.Read More
“When the tension rises between your counter party’s and your interests, splitting the difference is a quick way to relieve the tension…but it is rarely the best solution.”
The groundbreaking work of Harvard’s Program on Negotiation, and the classic best-seller, Getting to Yes (Fisher, Ury, Patton), has successfully reframed the conversation on negotiation from adversarial and tactical based arguing to ‘win-win’ problem solving. Almost everyone nods their head in agreement on the desire for win-win. And yet, even casual observation demonstrates that we often don’t behave in a way likely to produce ‘win-win’ outcomes.
Every day, negotiators miss opportunities to achieve the success they could have had…and the problem isn’t what they think it is. They settled for less than optimal outcomes because they weren’t paying attention to the most critical ingredient to negotiating a ‘win-win’. They probably don’t know what it is…and even if they did…they wouldn’t know what to do about it.
In a fun, lively and interactive course, participants discover this missing ingredient and how to use this knowledge to move from “I know” to “I can.”
When the tension rises between your counter-party’s and your interests, splitting the difference is a quick way to relieve the tension…but it is rarely the best solution. For better results we need to gracefully manage the tension to work toward collaborate. The goal is win-win and split the difference is lose-lose.
True, nobody loses big and there is relative peace, but nobody wins either. Sometimes it really is fixed pie and perhaps split the difference is necessary. However we must be slower to split the difference in case there is a possibility to generate a better alternative for both sides. Wouldn’t it be great to have a way to discover the level of tension and maintain the productive zone wherever possible?
Our negotiation skills training courses help participants learn to “stay with the tension” to optimize win-win outcomes and how to use Principled Persuasion to recognize a counter-party's legitimate needs and aspirations while pursuing her own interests with energy and determination.
Skilled sales negotiators close more profitable deals and build better, longer lasting customer relationships at the same time. If your salespeople are really good, even modest improvements to the top-line can make a big difference to the bottom-line.
Is Negotiating Worth the Effort?
If your salespeople were really good negotiators, do you think they could close deals, on average, at a 1% higher price? If that seems reasonable, consider the value added straight to your bottom line. Consider a typical example:
|Costs of Goods Sold||60|
|Selling & Administrative Expenses||25|
|Interest, Depreceiation, etc.||3|
|Net Income (Pre-Tax)||12|
Now add a modest 1% to sales revenue as a result of better negotiating, making it $101. If the negotiating is skillful and graceful, the 1% higher price won’t cause a loss of sales. Other expenses remain the same and the extra dollar of revenue falls straight to the bottom line. Now we have $133 of Net Income, and increase of 8.3%! If you can negotiate, on average, a 2% higher price, Net Income soars to 16.6%!
Here’s some good news: Skilled sales negotiators close more profitable deals and build better, longer lasting customer relationships at the same time.
I recently returned from a business trip to Shanghai. While I was awestruck by its size (25 million people), modern look (75% of the world’s construction cranes are in action there), traffic (I’ll never complain about Chicago’s rush hour again) and friendly people, I re-learned how to negotiate.
Our firm has taught negotiation skills classes to professionals for over 20 years and I was in Shanghai to teach an advanced negotiation seminar to a client’s China sourcing representatives. I arrived a day early in order to acclimate, and didn’t return home until the following Saturday.
I got two opportunities to visit several markets, where just about any consumer product could be procured. The markets were filled with locals and foreigners alike, all searching for bargains. My wife had asked me to find a particular bag, although I learned that the Chinese government had cracked down on the famous “back rooms” where “designer” handbags could be found.
Serenaded with “Mister,” “Trench Coat,” and “Backpack,” I accompanied my client on the hunt for Tommy Bahama shirts. She had visited one particular shop a number of times and was known by the clerk/owner when she arrived. She said, “My friend is looking for a bag,” and the response we got (I have learned) is quite common…” Come see my sister.”
We were escorted to another shop and taken past the back room, to a back, back room. Here’s what I learned or remembered:
Tip 1 — Go Early
Merchants seem to feed off the mayhem of the crowd. The more people in a condensed space, the more crazed their attempts to lure you in, almost pleading in one or two word questions: “T-Shirts?” “Watches?” “Luggage?” “Suits?” “Scarves?” “Watches?” “Child’s clothes?” “Ties?” “Shoes?” “Watches?”
Tip 2 — Listen to the Rap
The rap revolves around a calculator, where the first offer is made by the merchant. “This would be your price.” However the number is always quickly erased, another number is punched in and you are told, “This is best friend price.” How did we get so close so fast? Anyway, I was offered the “your price” of 1,500 RMB (about $240), followed by the “best friend price” of 980 RMB (about $156).
Tip 3 — Start Low
You’ve got to have a number in mind, and put it on the table no matter how ridiculous it seems. “I don’t think that’s worth more than 450 RMB (about $71). You will almost always be met with, “I’ll lose money on that.”
Tip 4 — Threaten to Walk or Walk
The game is afoot, and you will now start trading numbers. “How about $600 RMB?” I respond, “How about if you add the matching wallet?” “I’ll give you that for $200 RMB.” I respond, I don’t think that’s going to work for me, and I start to walk out of the shop. The next thing you know, someone is (gently) grabbing your arm. The further you get from the shop, the lower the price gets. “OK, both for 750 RMB.” I respond, “How about both for 700?” “OK!” (I’ve just spent $111.)
In negotiating, if you can live with the outcome or you’re thrilled (or anything in-between) you’ve taken part in a successful negotiation. I brought home a bag and a wallet and my wife is thrilled.
That’s a good negotiation.
However, if the authentic looking, feeling and writing Mont Blanc pen I bought for just under $3 is any indication, I probably got hosed!
Here’s a brief overview and introduction to the skills necessary for successful negotiations. The ultimate objective of these sessions is to help you negotiate as effectively as possible. ZEHREN♦FRIEDMAN has been helping clients sell, present, negotiate and influence more effectively on a global basis for over 20 years.