The occasional newsletter of The Negotiation Skills Company, Inc. (TNSC)
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Number 44, April 2009
NEGOTIATING IN INTERESTING TIMES – PART 2
Last November our newsletter focused on negotiating in ‘interesting’ times. Since then the global economy has gone from bad to worse – although many economists are beginning to see glimmers of the light at the end of the tunnel. Both businesses and individuals are paying closer attention to the deployment of their resources in a time when risk seems to be especially high. Deployment of resources covers more than simply the price paid for goods or services. Decisions also have to be made about the most efficient use of personnel, time, and such assets as equipment, real estate, and even the elements that are included in products or services.
OUR FIRST LOOK IS AT PRICES:
In the current market both individuals and businesses are paying more attention than they did a year ago to the prices they have to pay or the income they can derive from a transaction.
Sellers of goods or services find themselves in a bind: on the one hand they want to maximize income by charging prices that help the bottom line; on the other, businesses need to keep goods moving off their shelves or out of their warehouses – or derive sufficient income to keep their workforce profitably employed. This set of circumstances means that doing a good job of negotiation requires a proper understanding of the short- and long-term consequences of each transaction.
Consumers – both individuals and businesses – can take advantage of this situation by doing a good job of preparing for negotiation: understanding the value to themselves of a given product or service, comprehending the market and the alternatives available to them, knowing what price makes sense in each transaction, and determining the most appropriate way to deal with their counterparty.
While many folks may be reluctant to appear to be trying to take advantage of their suppliers, remember that one’s obligation to oneself, one’s family, one’s business is your top interest. Suppliers have that very same set of obligations; agreeing to deals that are harmful to their interests is unwise. The definition of a fair price is what a willing buyer will pay a willing seller. Agreeing on a fair price should yield a deal that works to the advantage of each party. It is quite appropriate to pursue your interests. That means asking for the best possible price is perfectly reasonable. Failing to do so may be against your interests.
Whether you are a buyer or a seller, here are a few rules to consider:
- Don’t be afraid to ask if the price under discussion is the best you can get.
- View the negotiation process as a civilized process for exchanging things of value – not as a competition where there has to be a winner and a loser.
- Remember to consider the relationship between you and your counterparty. If either leaves with a bad feeling about the deal, it can be disadvantageous in the future – whether the economy is in the doldrums or greater prosperity has returned.
- Do your homework regarding choices, market, and your BATNA (Best Alternative To a Negotiated Agreement).
- Figure out the priority of each of your interests and how each of those interests determines how far you are prepared to go.
- Fear, like guilt, is a risky reason for undertaking negotiation about money. It can lead to choices you will regret later.
- In many languages the word for doing business comes from the same root as negotiate. It can pay to remember this to bolster your confidence that negotiating is a good idea.
TNSC AND YOU
If you or your company need help with negotiating: coaching, training, or consulting, TNSC can provide the kind of assistance you need.
As an organization team members located around the world, skilled in several languages, TNSC is at your service. Since 1991 TNSC has worked with clients in virtually every business sector.
People who have taken our courses are entitled to (a limited amount of) free post-course consulting/coaching.
Our website’s Advice section offers more than 500 pages of free negotiation advice on questions from around the world on an extremely broad range of topics.
We are pleased to have added two new members of our training team who are based in the UK. Ray Walters has been a friend of TNSC since 1995 and brings tremendous international negotiation experience to our team. Lynne Robson’s stellar background as a deal-making negotiator and trainer adds further quality to TNSC’s team of international experts. You can see their photos and bios on our website at www.negotiationskills.com/staff.php
“The only function of economic forecasting is to make astrology look respectable.” --John Kenneth Galbraith
Good luck and good negotiating,
Steven P. Cohen, President The Negotiation Skills Company, Inc.
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