Chapter 10: Creative Negotiation: There is Always a Way

Overview

Children are accomplished negotiators. If they need extra allowance, a later bedtime, a sleepover, they usually get it. Children can be relentless in their pursuit of what they want. Familiarity gives them the advantage of knowing what parental hot-buttons to push. They are the best examples of ideal negotiators. Then they grow up and abandon the natural negotiating talents they learned instinctively.

Like selling, negotiation is something we use in every facet of our lives. I am often entertained just watching my three teenagers negotiate the use of one car. Amazingly, it usually works out. I think most of us are better negotiators than we give ourselves credit for. Negotiation is one of those transparent, interpersonal skills we use unconsciously. Negotiation is really a relationship skill used by people to deal with their conflicts and differences. Throughout this chapter, my goal is to leverage existing negotiation skills to build confidence and an awareness of long-forgotten negotiation principles and tactics.

Unfortunately, the very thought of negotiation conveys negative connotations, striking fear in the souls of most salespeople. Often the outcome of negotiation leaves people feeling dissatisfied, worn out, or alienated. A win-lose mindset has prevailed for decades. The negotiator (customer or salesperson) attempts to win important concessions and thus triumph over the opponent. It resembles the outcome of most sports: winner-loser. Not all successful salespeople are good negotiators. Most salespeople are not adequately trained in the art of negotiation and dont understand its many nuances. The necessary traits for successful negotiation vary somewhat, but some characteristics are universal, including patience, persistence, stamina, and confidence. Each negotiation is situational, with both sides discussing the points over which disagreement exists. In reality, no single negotiation session covers exactly the same issues or demands.

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When Do We Negotiate?

Almost anything can be negotiated with the application of sound principles. The biggest misunderstanding is not so much how to negotiate, but when. Salespeople eager to do the deal often initiate premature negotiation, trying to negotiate before the time is right.

So, when is the best time to negotiate? In the majority of sales situations, salespeople attempt to enter into negotiation before the customer has agreed to do business. There is a better, more productive approach.

Sales professionals engage in negotiation when a customer has expressed an interest to do business. We negotiate after the confirmation step, after the customer has agreed to do business with you.

Upon initial reflection this concept may seem bizarre and contrary to traditional sales techniques, but thats only because youve done it that way for years. Although it may have worked for you in the past, its not a very smooth or fluid approach.

Confirmation has two aspects: initial confirmation, where the customer is in agreement and willingly moves into the negotiation phase; and final confirmation, where the customer has accepted all the terms and conditions of your solution, including price. Initial confirmation may sound like this: If we can work out a competitive price, may I have your business? If the customer is in agreement, you now have earned the right to negotiate. Its much easier to negotiate terms, conditions, and price once you have a willing party. Your next step is final confirmation: Now that we have agreed on a competitive price may I have your business? It doesnt need to get any more complicated than that.

In our two-day sales negotiation seminar, salespeople are often shocked to learn that price should not be part of the sale. Its a separate discussion that takes place as part of negotiating final confirmation. Its no different than buying a house. You decide on location, size, number of bedrooms, and other features. After you pick a home you make an offer, which means you are now negotiating. The offer goes back and forth as both parties negotiate all the details, including price. In most cases the negotiating goes smoothly because there are two willing parties, a seller and a buyer. Use the same advantage in sales, by using your Sequential Model to create a willing buyer.

Tim Commandment #7

Negotiate after initial confirmation. Ask: Have I earned the right to negotiate?

Now its in each partys best interests to negotiate a win-win-win-win solution. The four winners are your customer and his or her company, and you and your company. With two willing parties there is always a way, in spite of initial barriers and disagreements. Details can be worked out when both parties are motivated to do so. If not, details can easily undermine a possible solution. Its not a good deal if one of the four wins is missing or compromised. The idea is to reach mutually beneficial agreements that resolve inconveniences or dissatisfaction and solidify long-term relationships.

Trust plays a major role in successful negotiation. Although there is no guarantee that trust will lead to collaboration, mistrust will inhibit collaboration. When people trust one another, they are more likely to communicate openly and honestly. In contrast, if people do not trust you they are more likely to withdraw and be less cooperative. Acting in a trusting manner throughout the relationship serves as an invitation to others to be trustworthy, especially if your trusting manner is consistent. Each negotiator must believe that both parties choose to behave in a cooperative manner. Trust is not a one-time, singular event. It is established over time by demonstrating professionalism, honesty, integrity, consistency, and cooperation and by following through on promises and commitments. Cooperative behavior is a signal of honesty, openness, and a shared commitment to a joint solution. Take advantage of the trust engineered throughout the first seven steps of the model. Remember, people judge us by our actions, not by our intentions.

Approaches to negotiation tend to reflect personal experiences, biases, and perceptions of the individuals involved. They are often reflected in one of two ways: flight or fight. People who take the flight

approach are uncomfortable with conflict and try to avoid possible rejection, frustration, and anger associated with negotiation. They become masters at avoidance and readily prefer to take flight rather than experience any degree of conflict. Relaters tend to take the flight approach.

The fight approach is supported by a mindset of, Only the strong survive, and Do unto others before they do unto you. Directors tend to favor this approach. Its a classic win-lose scenario. Bargaining and compromise are two components of fight. Bargaining is where you have a predetermined position and you haggle back and forth, working hard, grinding your opponent down. You pursue this approach until you are victorious. Compromise occurs when both sides give in and split the difference, settling for half a loaf. Compromise may satisfy both parties, but only to a limited extent. Of course, half a loaf in a highly competitive arena may be viewed as better than none but if it becomes normal practice the results may be less than desirable for both sides.

A more effective approach, one that fosters long-term relationships, is creative negotiation. Creative negotiation is defined as: Both parties seek to resolve their differences by working synergistically to create a higher quality, value-added solution. Both parties acknowledge the need to reach agreement, working amicably and creatively toward a solution that satisfies each. m

mAchievers International. Creative Negotiations Workshop. 1989.