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NEGOTIATION
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CHAPTER 7
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99% of the work is done. Why waste it?
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The bite isn’t much compared to the whole deal.
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A long-term relationship may be enhanced by giving just a bit more.
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It isn’t bad to let the other party feel he’s getting a bargain.
• Invisible nibbles:
The worst sorts of nibbles are those that take place without
the knowledge of the buyer or seller. In fact, costly nibbles take place after
the deal is made. Buyers nibble, for example, by trying to pay late. Suppliers
may try to nibble by slipping in price increases that were not part of the
negotiation. To stop the nibbles you may want to, for example, insist that
delivery cannot occur until you are satisfied that all the terms and conditions
have been adhered to.
• Take it or leave it (calling the bluff):
‘Take it or leave it’ is not as ominous
as it sounds. It can represent a good practice and conveys the impression
that a party is not prepared to back down on what it feels is a realistic and
fair offer. This tactic tests resolve since it may lead to deadlock, which is a
failure to reach agreement. When using this tactic the party must be prepared
to walk away.
• Asking questions:
Questioning can be a useful tool in negotiation. Asking
an open question at a crucial moment can quickly buy time, especially if your
counterpart has to think about the answer. Furthermore, it is good to remember
that the person asking the questions is in control of the conversation. This
means that asking the questions actually increases your power relative to
your counterpart. Asking questions can be used to test assumptions, such
as ‘would it be fair to say that you, as a supplier, are interested in a long-term
relationship rather than just a one-off deal?’
• Counter demands:
‘I can give you that if you give me….’ is often a test of
power. Your counterpart wants to ascertain how quickly you will crumble and
how assertive you are capable of being. Responding tit for tat with further
counter-counter demands generally stops the process quickly.
7.7 CONCESSIONS
During the course of negotiations there will be give and take, or what is termed
trade-offs or ‘concessions’. When presenting an opening negotiating position,
leave room to negotiate by opening high. Remember, you are only going to be
negotiated down from your starting point, and it is important you do not reach
your ‘must position’ too soon: a skilled counterpart will spot your body language
if you do.
Anegotiator should identify and document possible trade-offs or concessions in
advance of the negotiation. Undoubtedly some unexpected possibilities will come
to the forefront during negotiation; however, the more the team can anticipate
the trade-offs the better.